Android and Windows smartphone maker HTC buys big stake in cloud gaming

Mobile-OnLive a step closer in $40m deal

Smartphone manufacturer HTC has made two strategic investments that could pave the way for mobile-based cloud gaming.

The Taiwanese phone manufacturer has purchased a $40 million stake in OnLive, and has also wholly acquired London-based group Saffron Digital.

OnLive’s business is built on the premise of streaming high-end gameplay, via servers, to any device of modest video specs. Saffron Digital, meanwhile, specialises in the efficient delivery of multimedia content to mobiles.

The two investments could, in theory, open the path for mobile-based cloud gaming. That supposition is not new; rival cloud gaming firm Gaikai is investigating, and in some cases demonstrating, how cloud gaming can work on portable devices such as iPhone and iPad.

HTC builds mobile devices for Google’s Android operating system, as well as Microsoft’s Windows Phone 7.

Saffron Digital CEO Shashi Fernando said the buyout “provides us with an opportunity to expand into new sectors like games and music delivery”.

Saffron Digital was bought for about $47 million, according to Wall Street Journal report.

This will not mark the first occasion that OnLive has been backed by a firm in the telecoms sector; UK-based BT and mobile operator AT&T both have shares in the firm.

Yesterday Google claimed that, by the end of 2011, an estimated one billion people will be connected to mobile-web.

“Saffron Digital has developed an incredible expertise in mobile multimedia delivery. This ability to deliver optimised content in the future will be a key asset as content becomes more and more complex and localised,” said HTC CEO Peter Chou.

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