OnLive: The world is now ready for cloud gaming

OnLive says its new business model will finally convince gamers that cloud gaming can work.

But analysts remain sceptical that fans will want to spend money on the new-look service.

OnLive says its original business model, where games could buy a virtual version of their title and have it streamed to various devices, failed to take off because consumers wanted to ‘own’ their game. As a result, the firm fell into administration in 2012.

But now the company’s new owners are relaunching the service with a unique business option called CloudLift. The concept is that gamers – for 9.99 a month – can stream PC games they have already downloaded to other devices (including TVs and tablets)?and continue playing from the same save point.

The cloud as a platform is a great idea, but the business models are difficult,” said industry analyst Michael Pachter. The cloud makes sense only as a backup or as a service. If the former, nobody is interested in paying for it; if the latter, it requires a rental model, and those are unpopular with content owners. If the cloud has limited access to content, it will have limited appeal to consumers.”

Pachter has hit upon a potential weak point with OnLive. The new service has a number of big publishers signed up, including Warner Bros and Deep Silver, but there are notable absentees such as EA and Actvision.

We’re still experimenting with how we acquire
customers and who they are. For example, there
are Mac and Android audiences that will now be
able to play the PC games we’re ‘CloudLifting’.
We can help publishers reach more PC gamers
that would have previously fallen below the
required machine specification.”

Mark Jung,OnLive

But OnLive chairman Mark Jung insists that more publishers will join the service soon, particularly now that CloudLift is out there in the market.

We’re talking with everyone, and so far the reaction from publishers has been overwhelmingly positive,” he tells MCV. But this is a new business model, and so it can take some time to get everyone onboard. As you’re seeing, we’ve made great progress. We have a number of deals in the pipeline.”

He added: The value of CloudLift increases with every single new title we add. Over 20 new titles have been added during the latter part of this engineering cycle, and our throughput of new titles will continue to accelerate. We’re offering gamers a new way to play that’s both flexible and convenient, and allows them to play titles like Saints Row IV on their tablet, laptop, Mac or TV.

We expect to see a great deal of experimentation initially. Beyond this, I think the popularity of CloudLift will be tied as much to key releases as certain evergreen titles that thrive the more players can engage with them.”

OnLive’s new service has appeal, even the pessimistic Michael Pacther says: It is a better model than their last.” And when the big titles come to the service, it’s sure to attract some gamers that want to play their PC titles away from the desktop.

Yet can it really reach a mass audience? In the movie world there’s a CloudLift-like service called UltraViolet. This bundles digital versions of movies or TV shows with their physical counterparts for a few extra pounds. However, CloudLift is asking gamers to pay an extra 9.99 on top of their original purchase. Surely that’s a tall order?

How UltraViolet works as a concept helps us explain the ownership piece, but the business models are vastly different,” explains Jung. The case for CloudLift is simple: gamers become invested in what they’re playing and, if given the opportunity, would like to play those games more often, on more devices.”

But Jung does not rule out offering free games with CloudLift to entice gamers.

We’re still experimenting with how we acquire customers and who they are,” said Jung. For example, there are Mac and Android audiences that will now be able to play the PC games we’re ‘CloudLifting’. We can help publishers reach more PC gamers that would have previously fallen below the required machine specification.”

The cloud as a platform is a great idea, but the
business models are difficult. The cloud makes
sense only as a backup or as a service. If the
former, nobody is interested in paying for it; if
the latter, it requires a rental model, and those
are unpopular with content owners. If the cloud
has limited access to content, it will have
limited appeal to consumers.”

Michael Pachter, Analyst

OnLive’s return is a timely one, as now consumers and businesses seem to be coming round to the concept of cloud gaming. New games like Titanfall make use of cloud technology, whereas PlayStation unveiled its cloud offering PlayStation Now in January, which lets gamers stream PS3 titles to a multitude of screens.

That was a significant development,” said OnLive MD Bruce Grove. Cloud gaming in all its different forms has now become something people are turning to and looking at and thinking: OK this could work. We’re in a great place as we’ve already built all the technology and infrastructure.”

Jung added: Two trends are coming together to make now a great time for cloud gaming. Gamers are using all kinds of platforms. Cloud gaming is the best way to get triple-A content onto these devices.

The second is the growing availability of high speed internet. [Internet firm] Akamai released a report that said the percent of households with 10Mbps connections doubled in the last 18 months. You only need 5Mbps for a great OnLive experience. As more people connect at faster speeds, Cloud gaming will feel like a natural way to experience CPU and GPU intensive content.”