Author: game online | 
Few startups have a chance to revolutionize an industry. But if entrepreneur Steve Perlman’s OnLive lives up to its goals, the company will disrupt the entire video game industry — to the delight of both game publishers and gamers.
Perlman (right), a serial entrepreneur whose startup credits include WebTV and Mova, says his Palo Alto, Calif.-based company has developed a data compression technology and an accompanying online game service that allows game computation to be done in distant servers, rather than on game consoles or high-end computers. So rather than buying games at stores, gamers could play them across the network — without downloading them.
Perlman first told me about his plans two years ago. But he managed to keep the whole project secret until today. OnLive plans to show the technology live on Tuesday night at the SF Museum of Modern Art. Over time, Perlman says the company will unveil more interesting projects, features, partners and investors.
“This is video gaming on demand, where we deliver the games as a service, not something on a disk or in hardware,” Perlman said. “Hardware is no longer the defining factor of the game experience.”
[update: See reaction to OnLive from the GDC here.]
A bunch of major game publishers are backing the idea, which is simple but hard to believe. If you compress game data so much that it can be sent instantaneously over the Internet, then you no longer have to compute that data in a game machine. You can compute the data in a very powerful Internet server and then send the results to be displayed in the home. That’s a pretty big earthquake in a $46 billion worldwide industry ruled by three hardware makers who sell powerful consoles.
The problem with this server-centric approach, which has been talked about for a long time, has always been that the computing power required to process a game has been growing by leaps and bounds, while the ability to compress data hasn’t been growing at nearly the same rate. By vastly improving compression and reducing the computing power required to do compression, Perlman has turned the situation around.
The concept was originally evangelized as the “telecosm” by George Gilder in the pre-bubble days of the 1990s. Gilder thought that the Internet would “hollow out” the PC, meaning that Intel and Microsoft would become less important because their products would become commoditized. If you could spread processing loads across broadband connections, that would obviate the need for a powerful PC in the home. That is, you could do a lot of computing in the centralized Internet server, pass that data over fast Internet pipes, and do very little processing in the client-side computer in the home. Back then, a lot of people felt Gilder was out of touch with reality. Larry Ellison, Oracle’s chief, tried selling a Network Computer, but it never got of the ground. The idea has now evolved into cloud computing.
As consumers began to demand data-heavy software such as video over the Internet or high-end games, people needed more powerful PCs. Fast computers in the home made up for relatively slow broadband connections. But Gilder’s idea could now make a comeback, thanks to OnLive’s ability to compress data 200-fold, as well as the fact that broadband is more pervasive and the demand for ever more powerful computers has stalled. (We know that last point is true in part because $400 Netbooks, which aren’t full-fledged laptops, are selling fast).
Last week, Perlman showed me a demo of the technology. He was playing Crysis, one of the most demanding 3-D shooting games ever made, running on a simple Mac laptop and also on a rudimentary game console, known as a micro-console, which does almost no computing but merely displays the images on a TV in either standard or 720p high-definition. The graphics ran smoothly.
OnLive’s technology has the potential to move beyond games to the broader level that Gilder was talking about. It could eventually sweep through all forms of entertainment and applications, providing the missing link in helping the Internet take over our living rooms.
With OnLive, players can join each other in the same multiplayer game, regardless of whether they have a PC, Mac or OnLive’s own micro-console (a simple box with minimal processing power) connected to a TV. Such cross-platform game play usually isn’t possible.
Big game publishers and developers — Electronic Arts, THQ, Take-Two Interactive, Codemasters, Eidos, Atari, Warner Bros., Epic Games and Ubisoft — have agreed to distribute their games through the OnLive network, bypassing traditional retail game sales in an effort to reach people who don’t buy game consoles or expensive game computers.
To address naysayers who think this can’t be done, given all of the Internet’s trade-offs, OnLive will show 16 games being played live on the floor of the Game Developers Conference this week in San Francisco. The game service is expected to be available before the end of the year. If this sounds to you like the interactive TV hogwash of the 1990s, like Time Warner’s Full Service Network, it is indeed very similar. The difference this time is that this looks like the real thing.
