Streaming games service launched

The service will be available later in the year and charge a monthly fee

After seven years in stealth mode, a Silicon Valley start-up has launched a "revolutionary" video game service that offers new competition to consoles.

OnLive, which launched at the Game Developer Conference, promises to deliver on demand video games via the cloud to the PC, Mac or TV.

The company said it can provide high quality gaming on low end machines.

"We think this moment, this day will be remembered as the beginning of a new era," said OnLive boss Steve Perlman.

"This is huge. This is transparent cloud computing. This is really really important for the industry.

The MicroConsole connects the TV to the internet

"This will open up creativity, allow for new experiences and new kinds of expression that have never been available before," Mr Perlman told an audience of analysts, industry types and journalists at a ritzy unveiling of the product at San Francisco's Museum of Modern Art.

The innovation behind OnLive rests in its video compression technology which instantly streams video via the internet so that it appears "effectively instantaneously."

"Perpetually, it appears the game is playing locally."

The reality is that all the heavy lifting is done by remote data centres that can be up to a thousand miles away while players use a simple PC or TV hooked up to a broadband connection.

This removes the need for paying hundreds of dollars for traditional disc-based consoles made by the likes of Microsoft, Nintendo and Sony.

"We're giving access to people who don't have access. We've moved hardware out of the equation," said Mr Perlman.

"Digital strategy"

For around an hour Mr Perlman and his chief operating officer Mike McGarvey put OnLIve through some of its paces.

Too various "oohs" and "aahs" from the audience, the two men played games ranging from Crysis Wars to Lego Batman from a cheap laptop and from a Mac notebook.

So far nine big game publishers have signed up to the service

With the data being sent from servers just fifty miles away, the men boasted of being able to play with one-millisecond of lag.

Community tools like leaderboards and avatars along with the ability to share 'brag clips' which are short videos of your game highlights, are also part of the service. Users can also have multiplayer matches and watch other gamers play.

Users will need a high-speed broadband connection of at least 1.5 megabits per second for standard definition results or 5 megabits per second for high definition.

Players who want to use their television will have to purchase a small OnLive MicroConsole that connects the TV to the internet and is about the size of a pack of cards.

So far ten publishers have signed up to provide titles for OnLive. They include familiar names like Atari Interactive, Electronic Arts, Ubisoft, Take-Two Interactive Software and Warner Bros.

"OnLive fits our digital strategy, which is to bring content to as many distribution points as possible," Scott Guthrie, vice president of software publishers THQ told the San Francisco Chronicle.

"Amazing"

In the run up to the Game Developer Conference, or GDC, the company has been giving demos of the service.

Sarju Shah of GameSpot has had a test run and said "It seems pretty amazing. From this closed test it works really well . You can actually stream gameplay like Crysis, which is a struggle for most high end computers to do but in this scenario all you need is a little tiny box and an internet connection.

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"If they can pull this off in the wild, given everyone's internet connection in the home, they will truly wreck stuff for everyone. This is the tip of the iceberg. If they can stream gameplay to anybody then basic stuff like streaming video, a joke. Music? A joke," stated Mr Shah.

Mr Perlman said he understood why some people might be wary of what they are selling but that he wants people to question what OnLive can do.

"What we have is something that is absolutely incredible. You should be sceptical. My first thinking was this shouldn't work, but it does."

Analysts believe the success of OnLive could go one of two ways depending on pricing models.

"Depending on what business model these guys adopt, they could be wildly successful or a footnote in history," said Michael Pachter an analyst with Wedbush Morgan Securities.

Mr McGarvey was coy on the issue but did say it would be subscription based and that pricing "would be worked out in due course."

Over the next few days at the Game Developer Conference, attendees will get the chance to test out the service. The company is also inviting gamers to sign up for an external beta over the summer.

Mr Perlman ended his presentation with one plea to the audience and the wider gaming community. "This is thinking out of the box, help us make it out of the box."

"The benefits of what we are doing are just huge so we've got to at least see if we can make this thing work. It's just too cool," stated Mr Perlman.