OnLive is "gone"

So its official: OnLive is brankrupt, or whatever it is called in California (Chapter 11? ABC?) but it is claimed that all rights, patents and assets have been sold to one individual - but all staff layed off.

So why did OnLive not work? Well first most developers I know never believed in it, even after they saw it. The business model sucked bad. OnLive did not solve a problem for our key markets as most of us have pretty decent machines and the core market buys digital. The markets which needs OnLive do not have strong machines and have a weak internet, thus OnLive doesn't work.

The markets with weak machines actually are mostly f2p online MMO markets - not careing about the games OnLive offered and the company weren't online in those markets anyways.

The lag issue was always discussed away but it really existed. Games which needed fast response were unplayable on it. Games which don't need it were playable fine. So why should someone pay monthly fees to rent games on that service?

Essentially OnLive was a digitzer service to convert 3d games to flash video.

Some reasons why OnLive didn't work:

1) infrastructure too expensive, dependend on high internet backbones only available in industry states
2) low income from users
3) scaling up the userbase is expensive as their hardware was complex

Note that online games solve #1 as they work in most internet quality networks (they are build for them) and also solve #3 as developing cheap server backends is part of the challenge. Therefore online games can afford #2.

Wait, did I just say online games have a low income. Yes I did. Considering most players play 4-6 hours per day for 30 days per month (=120-180h per month or full 5 days) for merely $10-$20 then yes, its damned cheap. Most people spend more money on their internet line than on the game itself. Hell most people spend more on beer than on WoW.

Anyway, my personal opinion: OnLive was already dead when they startet and I said that often enough. I am happy its gone as I no longer need to listen to the bullshit that streaming is the future. It's not.

So why did GaiKai sell for $380 million to Sony? Because Dave Perry is a brilliant man and Sony won't have any use for it. Believe me, if the PS4 will have streaming its either for backwards compatibility or will cost premium.

1 comment:

Andreas Podgurski said...

I predicted a failure of OnLive as well, but for some other reasons. Ok, it was too expensive and didn't deliver a valueable benefit for it, no doubt. But especially OnLive HAD to fail, because they started to early. They developed specialized hardware, which wouldn't be needed ever. The custom boards were necessary until now, but there was never the amount of customers to get the running AND the development costs back. Now these boards aren't needed anymore, because you can do this on generic graphic cards with free function pipelines now. A competitor, which enters the market later, would never have to beat these market enterence costs and would be in an advance on the market. Therefore OnLive had to fail - especially, as it was already obviouse, that graphic cards would become that versatile in the near future. I don't know, how GaiKai solves the encoding, but I wouldn't declare cloud gaming as dead. On the other hand it seems funny to me, to stream more data for the developer logo to be displayed in a stream as the whole game would need as an App on the TV - with the same content (Spoken for most casual titles at least). In my personal opinion, TV based AppStores will be a much bigger market than cloud gaming via stream. Ouya will fail, here I am with you as well, but the idea will become a success most likely as a default component for televisions.