Are Gaming Consoles’ Days Numbered?

OnLive, a new startup company, plans to offer the gaming world streaming games. The idea is that just as people now stream videos (mostly porn) and music to their PCs, gamers will be able to stream games to their PC or TV. The current hype is that OnLive might doom gaming consoles.

Using the service on a PC will most likely involve installing client software. For TV use, a hardware box (the OnLive Microconsole) will be needed. OnLive claims that it will offer the latest PC titles to gamers.

The service is supposed to offer numerous advantages. First, the hardware requirements are alleged to be moderate. The reason is that the servers are supposed to do the “heavy lifting” while the user’s PC or MicroConsole displays the images and sends output (game commands). If the service becomes a reality, this could appeal to many gamers-especially those who would like to play the high end games without buying a high end system. Second, OnLive will handle the patches and updates on their end. While patching games is easy enough, this would make keeping up with the latest patches and bug fixes effortless. Third, OnLive might be cheaper than buying games. I say “might” because the service is still in closed beta.

While the service sounds appealing, there is the question of whether it will doom consoles or not.

One obvious factor is the fact that Sony, Nintendo and (most especially Microsoft) swing some big sticks in the industry. If their people think that OnLive is going to be a major competitor to their consoles, they will no doubt use their considerable influence with the game companies. Platform specific games (Halo, Halo 2, Halo 3) are nothing new and the same sort of tactic could be used against OnLive.

A minor concern is that the service requires reliable, fast broadband. While this is not a major issue (most gamers already have broadband), OnLive faces the same challenge as online gaming with the additional challenge that OnLive will presumably have no offline play. After all, offline play with OnLive would just be normal computer gaming-why pay for a service that would let you do what you already do? Of course, online only games have been successful. Just consider World of Warcraft.

A more serious concern is that OnLive will need to provide the service at a reasonable price (after all, gamers with plenty of money for gaming will just buy high end rigs and the games) while still being able to purchase and maintain high end servers capable of doing something that servers generally do not do (that is, play PC games).  To get companies onboard, OnLive will also have to offer them the opportunity to make more money dealing with OnLive than they will lose from not selling games directly to consumers. This might be feasible. A game going out via OnLive would not need to be shipped to retailers on physical media, thus eliminating those costs.

Since some gamers are into mods, they might find the service unappealing. After all, I doubt that OnLive will let customers mod programs on their servers. Of course, OnLive could offer modded versions. Also, many gamers do not mod, hence this will not be a concern for them.

One rather significant reason that OnLive will not doom consoles is that consoles already co-exist with PCs. Unless OnLive can offer the content and experience that keep people buying and using consoles, the console is most likely safe from the threat of OnLive. There is, of course, some concern that OnLive could be harmful to retailers. Of course, this is the same worry that retailers who sell music and videos have had to deal with for years.

I’ll no doubt look into OnLive. However, to appeal to me it would have to be a significant improvement over how I currently game. I suspect that I won’t become a customer, though. I tend to get one game and play it through for a month (or months) rather than playing many games each month. But, for gamers who consume multiple titles each month, OnLive might be a good deal.