A Bright Future for Cloud Gaming at Sony.

It is with mixed emotions that we acknowledge the sale of much of OnLive’s assets to Sony. It has been a long road for many talented people. Ultimately, Sony is the beneficiary due to their correctly appreciating the eventual importance of cloud gaming  and sticking to their beliefs prior to robust commercialization. OnLive and Sony’s PlayStation Now are the two leading cloud gaming services that offer the highest-end games over the open Internet. They each have their respective advantages. OnLive’s service will continue until 4/30/15. It can be tried on PC’s, Macs and many other platforms.

In the process of OnLive’s 2012 restructuring, a new company (OL2, Inc.) was formed to buy the assets. Although the new company continued all of OnLive’s services from that moment forward without interruption, the public perception was that OnLive was gone. That misconception continues well into 2015. In fact many of the recent articles that mention OnLive refer to it as “defunct” or something similar. Overcoming the perception of being dead has been one of the unanticipated challenges of the turnaround.

Since 2012, the company has dramatically improved its technology and business models such that all of its 5 services are gross margin positive, ranging from 43% to 86% margin. The fact that we had such positive margins should prevent repeat speculation that we were “crushed by infrastructure costs.” The company also was able to achieve conversion rates from free trial to paid of between 64-78% for its services. Despite these positive metrics, the lifetime value (TLV) of a subscriber was still less than the cost to acquire subscribers (CPA), but they were converging. While we knew we could not get to break-even on our own, we believed that there were many large companies who would be able to get there due to: 1) being able to communicate broadly and inexpensively (lowering CPA), 2) having their own distribution platform for the service, and 3) being able to license the most popular games and MMO’s, the latter 2 would have had the effect of both reducing CPA and reducing churn (thereby raising TLV). Despite these positive developments, we were unable to entice an acquirer who wanted to continue the service, and Sony already had their own service.

In 2012, Sony bought Gaikai for $380M, and we felt that we were worth at least as much, but we did not anticipate the “hype cycle” running its course and the resultant disillusionment and skepticism of cloud gaming that ensued. See graphic shown by NVIDIA at a cloud gaming conference:

Most of the companies that declined to acquire us did so due to the perception that they did not know how far off in the future cloud gaming would be. Predictions that cloud gaming will only be far off in the future are self-fulfilling prophesies.

We were driven by analyzing the opportunity based on first principles, and held off selling until we had proven critical milestones. We are happy that Sony is validating the innovations of OnLive by purchasing our IP and selected assets, and are immensely proud of the work that has been done by the talented team at OnLive, and we thank them for their amazing work. We are also grateful to our customers, game publishers, distribution partners and many other partners who have helped make this a reality over the years. We look forward to a bright future for cloud gaming at Sony.

The 2015 Case for Cloud Gaming and OnLive

OnLive was the first company to introduce low-latency cloud gaming as an over-the-top service in 2010. After the 2009 announcement and prior to that launch, many had deemed it impossible. People were correct to be skeptical since there were many hurdles that had to be overcome. There was a lot of excitement and hype at the time that it was proven to be real in 2010. Paradoxically, the hype and excitement have waned at the same time as all of the business fundamentals have dramatically improved. This slide shown by NVIDIA at a cloud gaming conference shows this in the context of the Gartner Group’s “Hype Cycle.”

Every major technology goes through this process of inflated expectations, disillusionment and dismissal, and subsequent establishment of importance. Unfortunately, as of this writing, the game industry is still in the “Trough of Disillusionment” regarding cloud gaming. That attitude is out-of-date for many reasons.

Cloud gaming is a matter of when, not if. Media delivery always passes through three stages:

• physical (e.g. CDs & DVDs),
• downloads (e.g. iTunes & Steam) then ultimately,
• streaming (e.g. Pandora, Netflix & OnLive).

First it happened for music, then video, and now OnLive enables it for games and all applications. Reliably streaming latency-sensitive graphically-intense applications (GIA’s) over the open internet is a huge challenge that OnLive has overcome.

Every major trend is moving dramatically in the right direction for cloud gaming:

• Bandwidth is getting faster (50%/year), cheaper and more highly penetrated.
  • In homes, offices, via wires, Wi-Fi and mobile.
  • LTE is fast and prevalent enough to deliver the service well.
  • With faster speeds comes lower latency and higher quality
• Thin clients that can’t run big games are multiplying in people’s lives:
  • Tablets, TV-connected devices (e.g. Amazon’s Fire TV & HDMI sticks)
  • TV’s themselves (OnLive is integrated with several)
  • Chromebooks & thin Windows laptops such as the HP Stream
  • 3/15 introduction of the Intel Compute Stick for ≈$150
  • Game controllers emerging for Android and iOS devices (e.g. Wikipad).
  • Games are getting bigger each year, so harder to fit many on RAM-based laptops or other platforms that are gaining share.
• PC Sales are declining, so PC games need other means of delivery
• Server technologies are advancing, reducing costs and improving quality
  • GPU virtualization is just becoming available

OnLive has also radically improved its technology and business:

• All lines of business have positive gross margins for paying customers.
• Over 70% of free trials convert to paying customers.
• The time (and therefore cost) to on-board and test applications has gone from weeks to hours.
• Added MMO’s that monetize in ways that don’t require revenue splits.

OnLive’s cloud gaming has inherent advantages over traditional modes of play:

• No waiting for downloads. Instant play.
• Works across wide range of platforms with consistent user experience
• Platforms never need upgrading
• No risk of piracy
• Unlike home platforms, there is no limit to the amount of computing power that can be brought to bear in the cloud to create new experiences.

OnLive’s platform can run Windows applications remotely from a wide range of clients. This is a similar capability as Amazon’s AppStream, but we deliver it at lower cost, lower latency and with better performance at lower bandwidth while tolerating more packet loss. The ability to deliver any application to any platform is a big deal.

OnLive has 144 patents issued or allowed, with another 135 pending (as of 3/15). Many of these are fundamental and are a result of OnLive having pioneered this area.

Reliably delivering OnLive’s service over the open internet without interruption for over 4 years is the result of tremendous talent and dedication on the part of many brilliant minds. The innovation continues.

Firestorm Mobile on SL Go!

OnLive is thrilled to announce today that due to overwhelming demand from our community of SL Go users, we are making the Firestorm Viewer available for mobile devices including Android and iOS. Due to current technical limitations, we are only able to offer one viewer for mobile devices. Our studies have shown that the SL Go community prefers the Firestorm Viewer, and now they can enjoy the same rich experience on their mobile devices.

We will still offer our users a choice of either Linden Lab’s Second Life Viewer the Firestorm Viewer on PC and Mac to supercharge older computers and laptops.  We hope to bring this same choice to mobile devices soon, but still have some technical hurdles to overcome.

Users with existing SL Go accounts do not need to do anything!  Just pick up your iPad or Android tablet and login with your SL Go account.  Firestorm will appear.

For new users, we have 2 convenient ways to sign up for SL Go.

1. For a 7 Day Free Trial visit: https://games.onlive.com/landing/slgo and sign up.  Credit card or PayPal required.
2. To pay “in-world” visit our SL Go Island to sign up and pay in L$.  No name and no credit card are required.

Copy and paste into your Second Life navigation bar: http://maps.secondlife.com/secondlife/Sunny%20Dream/230/147/22

We’re grateful for all the feedback from our SL Go community, helping us continually improve the SL Go experience for all.

SL Go – Now, Pay with L$

 

You’ve probably heard of SL Go, the viewer that streams Second Life from the cloud in ultra-rich graphics, right to your tablet or low powered computer.  You might have wanted to try it, but hate giving out your credit card info and personal information.  Well, we now have a great solution for you!

For a limited time, if you sign up for SL Go with a NEW USER account you can buy weekly subscriptions in-world using Linden Dollars (L$). There is a private sign up booth where you can create your free SL Go account, and then pay for subscriptions using L$. Each week is only L$650, and you can buy up to 4 weeks at a time.  Also, you can return and renew or extend your subscription in-world at any time.

Sorry, but existing users with monthly subscriptions will need to wait for this feature.  It is much more complex to transition an account from US Dollars to Linden Dollars.  We will be bringing this feature to you soon.

Paying for SL Go with L$ has been one of the most common requests we have received in our forums and chat rooms.  We are very excited to offer this now to new users.  We hope this makes it much easier for you to be a part of our growing SL Go community.

Teleport here to Sign Up in-world:

http://maps.secondlife.com/secondlife/Sunny%20Dream/230/147/22

Free. Instant. Everywhere: War Thunder Hits CloudLift

 

It’s been just over 2 months since we introduced CloudLift™, a new way to play your downloaded games in the cloud, whenever and wherever you want to. It’s an exciting shift, and one that’s been well received.

CloudLift makes it easy for you to pick up where you left off when you’re away from your home rig – giving you the convenience to access and play your games on tablets, laptops and Macs. And now, with the addition of Gaijin Entertainment’s free-to-play MMO War Thunder, we’re blasting open even more possibilities for CloudLift subscribers!

If you’re one of the 5+ million gamers already playing War Thunder, you now have the freedom to rain destruction from the skies on whatever computer or Android tablet is on hand—dropping into the action instantly without needing to re-download the client or worry about the minimum requirements of the device you’re using.

If you’re not yet a War Thunder player, you not only get the freedom and convenience of playing everywhere, you never have to wait for the game to download, because you can jump in and play via CloudLift while your game is downloading.

And if you don’t have the kind of computer you need to download a game as intense and graphics-rich as War Thunder? With CloudLift, you can bypass the download and play on the machines you already have!

A CloudLift subscription is just $7.95/month, with a free 7-day trial. Check it out for anywhere access to the awesome WWII action of War Thunder, in addition to “lifting” games you already own.

To get started on PC or Mac, head to games.onlive.com/download, or get the OnLive Android app from the Google Play store.

We’ll see you in the not-so-friendly skies.

Kevin Keating, Publisher Relations

SL Go: New Pricing, Support for More Countries

It’s been almost a month since we launched the beta of SL® Go, our mobile viewer for Second Life®, and the response from the SL community has been very positive. Second Life residents have said they love being able to access Second Life in full 3D using Wi-Fi or 4G LTE on a tablet or lightweight laptop. We also know they want a subscription plan with unlimited usage and would like broader international access.

So today, we’re releasing updates that will allow more people to experience SL Go and that offer more choices and flexibility in our pricing.

SL Go updates (effective immediately):

• Monthly unlimited usage subscription plan for $9.95US/£6.95UK. No commitment – cancel anytime
• Reduced hourly rates – only $1US/£0.70UK per hour (the free 20-minute trial remains in effect)
• Expanded international support: now 36 countries (listed below)

SL Go is now supported in the following countries:

Andorra	France	Lithuania	San Marino
Austria	Greece	Luxembourg	Slovakia
Belgium	Hungary	Malta	Spain
Canada	Iceland	Monaco	Sweden
Croatia	Ireland	Netherlands	Switzerland
Cyprus	Israel	Norway	Turkey
Denmark	Italy	Poland	United Kingdom
Estonia	Latvia	Portugal	United States
Finland	Lichtenstein	Russia	Vatican City

 

We’re grateful for the opportunity to support the Second Life community, and pleased to be working with such a passionate and creative group.  We look forward to further developing SL Go with their feedback and suggestions.

Rick Sanchez, VP Product and Marketing

The ‘Respawn’ of OnLive

This is a proud moment for OnLive.  It is the culmination of a lot of thought and effort on the part of many talented people.  After examining what gamers really want and need, we realized that we could do a better job for them by not trying to be their everything, and to do for them that for which we are uniquely suited.  In other words, our new CloudLift service improves the user experience by enabling gamers to both download/play their games locally when they are on a platform capable of it (i.e. gaming computer), while still enjoying the benefits of OnLive’s portability when they are not.  This capability should further improve the advantages of downloaded games over physical media due to the portability we bring.  Not only do we enable one to move between PC, Mac, Android and TV’s (platform portability), but between one’s home, office, friends’ house, vacation spot, etc. (geographic portability).  Downloaded games are otherwise cumbersome to re-download at a friend’s house.  We think that our additional functionality conferred to existing and new games is great for gamers, and good for the whole category of downloadable PC games.

This change has also allowed us to on-board games more quickly due to not having to modify the games.  This should allow us to deliver games on their retail launch dates.

In addition to offering our traditional fare of games, we have added MMO’s  (Massively Multiplayer Online games), under a new brand: “OnLive Go.”  We just announced the first two: Second Life from Linden Lab (not a “game,” but a virtual world), and War Thunder from Gaijin Entertainment.  Second Life is available now under the name “SL Go” and works on all of our platforms except iOS [update as of 10/14: including iOS].

These applications are designed to do best on high-end computers with fast GPU’s. Most people are not buying those, and instead migrating to laptops and tablets, on which these applications do not perform as well. To use these apps, you have to either own or rent the fast computer. OnLive Go, including SL Go, lets you rent the way an Internet café would, only it gives the freedom to use it anywhere that you have high bandwidth. This cost is in line with most forms of entertainment (see: http://kk.org/thetechnium/archives/2011/03/your_attention.php ). This variable-rate billing model seems very 1990’s, but is inescapable since so many MMO users spend large fractions of their lives connected, sometimes only in the background. Think of it this way, at 5 cents/minute it is 37% cheaper than a Skype call to Italy from the USA, and it’s a connection that consumes >100X Skype’s bandwidth and includes a very powerful computer that would only have been cheaper to have owned after you used it for almost 1000 hours, and even then, it could not achieve our speeds since our data centers benefit from gigabit connections to the internet. The latter claim can be verified by subscribing to our amazing OnLive Cloud Desktop (for iOS and Android) and running SpeedTest.net or similar bandwidth tools. SL Go is a power tool that delivers a fast and immersive experience that enables one to experience Second Life in all of its beauty and complexity. If you want almost-free with less performance, use Lumiya for Android. This power tool is for people who value their time and getting the best graphical experiences where they are or would like to be.

Speaking of bandwidth, residential Internet bandwidth continues to increase by leaps and bounds.  According to Akamai’s most recent State of the Internet Report (3Q13 (5 months old)), the percentage of US homes with bandwidth over 10Mbps has gone up by 82% in the prior year (from 19% to 34%).  The US average data rate was 9.8Mbps, and 75% have a connection ≥4Mbps.  These trends will only continue.  We can work with as few as 2Mbps, but faster connections result in better performance.  We claim no credit for this trend, but we claim tremendous benefit from it.

Organizationally, we have improved in many ways.  Following the maxim of always hiring people that are smarter than you, I have hired Mark Jung as Executive Chairman (the boss).  I will just be director (of the board) and lead investor.  Mark has recruited some amazing additional talent that are enumerated in today’s press release.

All in all, we have come a long way.  The table below summarizes some of the key ways that we have changed since OnLive “respawned.”

OnLive Change Log

OnLive Inc. (OL1) pre-8/17/12	OL2 Inc. (doing business as “OnLive”)
Services: PlayPack, PlayPass, OnLive Cloud Desktop	CloudLift, OnLive Go (SL Go), PlayPack, OnLive Cloud Desktop
All game play only from cloud	Game play choice (cloud and/or local)
Custom modified games	Little to no modifications
Game platforms: PC, Mac, Android & OnLive Game System (for TV)	Added: LG TV’s (GTV), VIZIO Co-Star. Side-loadable: (nVidia Shield, Ouya)More to come.
OnLive brand centric	Game brand centric
4 Data centers (server locations)	6 Data centers (server locations)
US bandwidth: % >4Mbps: 62% (3Q12)	75% (3Q13 (5 months ago))
US bandwidth: % >10Mbps: 18% (3Q12)	34% (3Q13 (5 months ago))
Office location: Palo Alto, CA	Mountain View, CA
# of Employees: >200	>100
# of Issued Patents: 14	95 (w/214 more pending or allowed)
Technology breakthrough	Scalable business

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Biking Home for Charity

Following a week working out in Cologne at the Gamescom expo a small group from various UK games companies got together to ride back from Cologne to the UK, a distance of 350 miles over three days.  In the process we raised around $8000 for children’s charities.  There were six riders in all including two from OnLive, myself and James Beaven along with two drivers in the support vehicle. Having never ridden more than 60 miles in one day before this was something new altogether.

Stats across the three days include:

Total distance: 352.4 miles (91.8/134.5/115.5/6.5)

Total climbing: 18445 feet

Total riding time: 29 hours

Calories burned: ~22,000

Countries crossed: 5 (Germany, Netherlands, Belgium, France, UK)

Crashes: 3

Ibuprofen consumed: Significant

Was a great adventure and a huge amount of fun.

Bruce Grove, General Manager OnLive UK

Team OnLive at GamesCom

Bruce Grove, General Manager OnLive UK

Guten tag from Cologne!

This week on the OnLive Blog we’re heading to Cologne, Germany, for an onsite report from our OnLive UK team direct from GamesCom.

GamesCom is a cross between PAX and E3, but with more beer and sausage. This year over 150,000 gamers are expected to descend on the Koln Messe exhibition hall for a 5-day gamefest.

The excitement is growing as gamers from all over Europe pour into this historic city. Big publishers like Warner Bros, Square Enix, Sega, and Ubisoft are showing off their latest releases, and we may even see some announcements for new games coming next year. Yesterday, GamesCom opened its gates to stampeding hordes desperate to get hands-on with the latest games – and we do literally mean stampede!

Team OnLive will be here meeting with game publishers and developers, and of course checking in with some of the highlights from the show floor. On Saturday morning, as the doors close on the event’s business area, James Beaven and I will be packing away the demo gear and breaking out the lycra for an epic, insanely long 352-mile cycle ride for the games industry charity, GamesAid.

352 miles doesn’t sound too bad – unless you try and do it in three-and-a-half days! Yup, instead of flying back from Germany to the UK like normal people James and I, with four other similarly deranged game execs, will be taking the long way home.

Starting from their hotel in Cologne, Team OnLive will be spending up to 12 hours a day in the saddle, across four countries to the ferry port of Dieppe, France. After a short crossing, we’ll complete the last 40 miles into the UK’s seaside town of Brighton.

We promise to do their best to report in with updates, locations and photos from the ride. We’ve also devised a pain-o-meter to help describe the levels of soreness we’ll experience over the three-and-a-half days.

Wish us good luck.

Bruce Grove, General Manager OnLive UK

MotoGP™13 revs up for cloud launch: Hit the starting grid for the fastest race of your life!

Twist the throttle on MotoGP13 and rev your adrenaline into the red! From the second you dump the clutch in motorbike racing, physics becomes your nemesis as you coax a 200+mph machine into corner after corner, shifting your bodyweight and fighting the front wheel’s urge to go airborne. Every essence of this insanely fast sport is captured by Milestone Studios, the developer of MotoGP13.

If you’ve never experienced MotoGP, there are three basic categories: MotoGP is for bikes up to 1000cc, Moto2™ has an official 600cc engine supplied by Honda, and Moto3™ includes bikes with single-bore 4-stroke engines up to 250cc. As the official videogame, MotoGP13 brings to life all the tracks, riders and unforgettable exhilaration of the 2013 MotoGP season in a race experience unlike anything you’ve encountered before.

With OnLive, you can drop into the action whenever and wherever you are, on PC, Mac, Android tablet and the big screen of your TV. Pick it up as an individual purchase for $39.99/£29.99/39,99€ or as part of the PlayPack monthly subscription package, and get unlimited access to more than 250 console-class games at an incredible value.

Graphically the game is photo-perfect, capturing in glorious detail each of the riders, the bikes and the tracks – including a brand new track, Circuit Of The Americas, the first purpose-built Grand Prix facility in the U.S., near Austin, Texas. This impressive 3.43-mile track completed in 2012 has a total of 20 corners and a 41-meter elevation change, ending with an exciting incline on the home straight.

Scalable rider aids mean you can play the game from arcade-style right up to full simulation for the ultimate rush, and a new career mode with first-person elements, like 3D pits and helmet views, takes the realism up a gear lap after lap.

Special attention has also been placed on the inevitable-but-spectacular crashes in game, making for great Brag Clip™ videos. Milestone used a professional stunt rider and purpose-built rig to motion capture in superb detail every millisecond of when rider and bike part company.

In short, if you are looking for a thrill ride you have to try out MotoGP13.

Watch the launch trailer:

Come play the free demo at
http://games.onlive.com/launch/trial/MotoGP13.

See you out on the track!

Kevin Keating, Publisher Relations