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 That attitude is out-of-date for many reasons.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.

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