Cloud gaming service OnLive coming to the TV

November 18, 2010

US-REARDEN-ONLIVEOnLive, the closely-watched startup that is aiming to change the way people buy and play video games, officially launched last June. But the company says that was a mere warmup for the main event, which begins in a few weeks.

OnLive emerged from years of stealth development in 2009 with a somewhat audacious plan to offer so-called “cloud gaming”:  instant, on-demand and lag-free access to video games stored remotely on servers in data centers.

The service started last June but was only accessible through a PC. But starting Thursday, OnLive began taking orders for its $99 “microconsole,” which connects easily to a TV and which will be delivered starting Dec. 2. Using the console, users can access a catalog of games that will grow to 50 by the end of the year, including big-name titles such as “Borderlands” and “NBA 2K11″

OnLive poses a threat to traditional home consoles such as Microsoft’s Xbox 360 and Sony’s PS3, but only if it works as advertised and there are no stutters or hiccups in the game stream.

OnLive Chief Executive Steve Perlman said the carefully managed launch for PCs last June was to ensure that the company’s network could indeed handle the demand. But he said PC gaming only represents around 10 percent of the market, and that TVs are where the real action is. He won’t divulge OnLive’s user base, but said it has already hosted more than than 2 million game sessions.

“We’re up against quite a bit of skepticism, so we knew that if we made any misstep at all people would dismiss us out of hand,” Perlman said. “PC gaming was basically a test.”

The company is launching a multi-million dollar marketing campaign, just in time for the holidays. Perlman said his expectations for OnLive — whose investors include Warner Bros., Autodesk, Maverick Capital, AT&T, British Telecommunications and The Belgacom Group — are “much higher” than last summer.

“I tend to be conservative, but there’s been a very strong reaction. People are looking for a change.”

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