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Flying Into The Cloud

June 23, 2011 Article Start Previous Page 2 of 3 Next

The Race Towards Ubiquity

Accessibility: it's the whole reason that cloud gaming is such an attractive notion. Being able to access games regardless of one's location or the power of local hardware has tremendous value to consumers, and both Gaikai and OnLive realize this -- but once again, their approaches to the same problem differ.

At E3, Perlman demonstrated OnLive-streamed games playing on a variety of different devices, including TV, iPad, Android tablet and smartphone. Ubisoft even created a touch-enabled version of the upcoming From Dust which was running on a tablet, streamed from OnLive. It's that kind of remote processing power that can make such high-end games a possibility on mobile devices.

Perlman says that OnLive's philosophy is to make its streaming service as frictionless as possible, letting users easily access their games on various platforms, with support from various control methods such as a traditional gamepad or mouse and keyboard, or an on-screen touch gamepad or custom touch controls.

The company also signed up with U.S. electronics firm Vizio early this year to incorporate OnLive's technology in Vizio's line of internet-ready HDTVs and Blu-ray players.

Perlman expects OnLive to be in 25 million televisions by the end of the year, and 50 million Blu-ray players. "You get to the point where our total addressable market... is going to be larger this time next year than any game console," he says.

The math is simple -- Perlman is projecting a total addressable market, or "TAM", of 75 million this year. Not all of those people will adopt OnLive, but Perlman is counting on internet TV users who use built-in Netflix apps to hook their TVs up to the internet, and then later -- hopefully -- explore what OnLive has to offer. OnLive already has an "in" to TVs thanks to the relatively cheap MicroConsole, but streaming game tech built into living room electronics takes a more seamless approach to market penetration.

"When you suddenly start seeing OnLive on every device in your home, and you have to do nothing to get access to all of your games, and they're available anywhere they are and all the hassles of gaming go away ... at some point, people say, 'Why do I have all this different hassle?'" he says.

Mobile will be "huge" for OnLive says Perlman, who adds that the company has dozens of engineers working on getting OnLive working properly with various mobile chips.

Gaikai's Perry shrugs off the approach that OnLive is taking to get its service on many different devices. "The thing that they need is a chip in the device... to do their decoding," he says.

"I will promise you this: you will see Gaikai on digital televisions in 2012," says Perry, "and it will not require any big [partnerships]. I would expect it to be on lots of televisions. We're able to stream our [technology] into the TV without putting in any chip. That's a pretty big advantage, and there's been a lot of effort put into that... We can put the Gaikai app on the Vizio TV without modification of the Vizio TV."

Last year, Perry posted images of World of Warcraft modded for an iPad's touch screen, streaming to the device via Gaikai technology. While that was just a prototype (Gaikai stresses that it does not have a deal with WoW developer Blizzard), Perry says that Gaikai's team is hard at work on bringing Gaikai to mobile devices.

The goal is to get on as many screens as possible, seamlessly. "As long as the device can accept a video stream, we can deliver to it," says Gaikai's Reeves. "And since we don't require a custom chip, we're dealing with standard technologies here, and that's another big differentiator between us and other players out there. We've figured out how to make the devices think what they're seeing is standard."

"Where Netflix can be deployed, that's where we can be deployed, that's how you have to think about it," she adds.

Sharply Contrasting Business Models

Gaikai and OnLive surfaced around the same time, back in 2009, when the possibility of streaming gaming was barely on the public's mind. When two companies emerged using fundamentally similar technologies, comparisons were inevitable.

But the two business models employed by Gaikai and OnLive are vastly different. OnLive is essentially an all-in-one streaming game business that's targeted directly towards gamers. If you've ever used iTunes or Steam, it's quite similar, only instead of having to download a game to a hard drive, players pay for instant streaming access to these games. OnLive is betting on the notion that the idea of actually "owning" software is fading away -- a notion that many outspoken gamers won't let go of.

OnLive's customer-facing business can also afford to try out new pricing strategies that are easier for a cloud-based service to implement. The company offers a Netflix-style PlayPack option that lets users pay a flat rate of $9.99 per month for access to certain OnLive games.

OnLive creates the technologies, brokers deals with publishers to bring their games to the service, markets to gamers, and works with hardware manufacturers, taking a cut of sales generated through the service. OnLive will host over 100 games this year, and 150 games are "in process," says Perlman.

On the other hand, Gaikai's executives position the company as a service for game publishers -- Gaikai doesn't try to do business directly with gamers. Instead, the company enables publishers with the technology and ability to deliver streaming games.

Currently, Gaikai is focused on a try-before-you-buy model. Gaikai enables publishers who buy online ad space for a game to allow web surfers to click through and play a demo through a browser, with no game install, and after just a few seconds of loading time. At the end of this demo (and also during), users have the option to click a link that directs to the publisher's digital storefront, or to a physical online retail outlet. Gaikai gets paid by the minute, by publishers or retailers, based on the number of minutes users spend streaming the demos.

Walmart recently implemented a major deal with Gaikai, which now powers game demos of Electronic Arts' Dead Space 2 and Mass Effect 2 through the retailer's website at its Gamecenter destination. It's a powerful advertising tool that takes the core idea of accessibility and implements it in a different way than OnLive.

Article Start Previous Page 2 of 3 Next

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