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OnLive relaunches business with comprehensive overhaul

OnLive relaunches business with comprehensive overhaul

Wed 05 Mar 2014 5:00pm GMT / 12:00pm EST / 9:00am PST
BusinessOnlineTechnology

New management, technology and business models revitalise streaming service

When OnLive first launched to great fanfare in 2007 it was was met with a mixture of awe and cynicism. To some it was the herald of a new technological dawn: an era which would see us return to terminal computing, powered by distant humming mainframes - a model which would lower the price barriers for PC gaming and allow publishers to revitalise the market.

For others it was another interesting anomaly - an idea which had escaped from the drawing board well before its time. Without the infrastructure and install base to support it, they predicted that OnLive would remain an ambitious footnote in history of gaming's evolution.

The truth transpired to be somewhere between the extremes. OnLive's technology did work, plenty of publishers signed up for the service and, by giving away plenty of the micro-consoles which allowed games to be played on TV instead of a PC, the install base was grown significantly. Nonetheless, the UK's infrastructure did prove to be inadequate, with jerky and unresponsive performance rendering many fast-paced games unplayable, and subscriptions quickly fell away - the public wasn't willing to pay full price for the experience and publishers saw no reason to cut their margins and encourage channel cannibalism.

Today, the business is pulling back the covers on a fresh new approach, with new business models, management and technology. OnLive is back for round two.

"in the last year we've really looked at what makes sense as a business model and what things were broken"

"When we initially launched in 2007, OnLive was positioned as a platform," general manager Bruce Grove explains. "As a platform it was dependent on getting content, and users thinking it was great - as well as a good internet connection. It's now five years since it was demonstrated at GDC, four years since launch. In that time a lot of things have happened, but in the last year we've really looked at what makes sense as a business model and what things were broken.

"First off, as a user, you looked at it and realised you didn't own the game. Ownership is important. If the network is down, the company goes away, anything happens, everything I've paid for disappears. You were asked to pay the same as you would for a console or PC game. So there's channel conflict. People also don't want to buy the same game twice.

"For the publisher, it was channel conflict. too. There was work involved in getting a game to OnLive, previously. If a user bought it there and then didn't buy it elsewhere, publishers were costing themselves money for the same sale. So there was a whole chain from beginning to end that wasn't working."

It's a frank enough explanation and Bruce Grove is the right man to deliver it. He's been with the business since day one, so has more than enough knowledge of the tough times it's been through. A third of the team's original members are still at the company. Working alongside them now, however, is a new team of executives with a worthy pedigree.

1

Mark Jung is the business' executive chairman and acting CEO. He co-founded IGN before selling to Fox, then was CEO Vudu, a streaming box company which was then bought by Wallmart. Jung's previous partner at IGN, Rick Sanchez - who went on to work at Metaboli and Playdom - is also on board. On the business development side is Carrie Holder, an ex-EA employee with deep industry ties, whilst Dom Gordon, previously of Gracenote and a multiple patent holder in streaming tech, is the new chief engineer.

Enabling all that new hiring is chief investor Gary Lauder, who bought all of OnLive's assets, IP and patents in 2012, when the company underwent a very public insolvency which saw the departure of founder Steve Perlman. A long-time Silicon Valley VC, Lauder steers the company as chairman.

But a fresh boardroom isn't an answer in itself. OnLive is reinventing itself in its customer propositions, too. Enter CloudLift.

"OnLive is streaming technology," says Grove. "None of that has changed. Everything we've been working on has been about how we deliver games over the network. We've continued to focus on bringing a graphically great experience and to reduce the latency, as well as the features that you can't get anywhere else. We're just now starting to see technology come in that copies the stuff we've been doing for the last few years.

"We wanted to stop being a platform that was going head to head with everything and look at tech and what we could support, so we came to CloudLift. Platforms are starting to deliver cloud saves, which are a really significant thing. As a gamer, no matter what happens to your machine, you got your saves somewhere - but before, if you lost them, it was a disaster. Syncing your data to the cloud is very important, but people like Sony are now doing this for us.

"We're just now starting to see technology come in that copies the stuff we've been doing for the last few years"

"What we're doing is giving you a way to play your cloud-saved games across more platforms. Say you have Steam. You have a library of Steam games that support the Steam cloud. You've already bought the game, so the publisher is happy. You're happy. You can play it on your local machine, but now, when you go travelling you can play it on your Mac, or your laptop or your Android device. The same save, anywhere in the world. Then we you hit save on OnLive, we sync it back up so when you get home that game is ready for you.

"We have gone from being a platform that forces you to make a choice to being a platform that complements your activity and gives you more flexibility and mobility. You could be in the home, downstairs playing on the TV. You could be playing on one of the new Android set-top boxes. You could be travelling. We're seeing solutions talking about home streaming, but that can't go outside. As soon as you get outside, you can't stream from your home device."

Launching that Steam game also puts you in Steam's ecosystem, Grove tells me. That means you'll have access to your friend list and all of the social options that entails. It also means you don't even have to download the game first - just link OnLive to your Steam account and it will give you access to any compatible games you've paid for, meaning you can play remotely until you get home.

Whilst there are obvious advantages to being able to pick up a Steam game where you left off from you laptop or tablet, Grove also points out that this could be a revelation for Mac gamers. Now, they can buy a PC game from Steam which hasn't been ported to Mac and play it via OnLive.

"At the minute it's PC, Mac, Android. In the US we have LG and Vizio connected TVs and some set-top boxes and we plan to bring this to more devices that make sense."

iOS devices would seem like the obvious inference, here, but Grove says that there are a few barriers to be overcome there.

"We're working on that. The idea is to extend to more of the platforms. As much as anything that's about working out the right business model - the rules say you can't actually be a store within a store, so we have to comply with that. We've got to work out the right model - we're on the Google Play store, so we're hoping to do something similar to that. Obviously iOS is a very popular platform so we have no reason to not support that.

"For us now, hardware is all of these devices," he explains, although I'm assured that the original micro-console will still work if customers want to play through a TV. "We're a service, so really from our perspective, the monetisation model is that there's a subscription. Just in the same way there is for Netflix or Lovefilm, any streaming services. This is subscription-based gaming. We don't care where you bought the game from - we will examine your library and import anything that supports the cloud sync, based on the deal we have with publishers."

Currently that list of publishers includes Warner Bros. Deep Silver, Born Ready and Codemasters, but Grove says many more deals are in the offing. Origin and UPlay are also mentioned as future targets for collaboration. A couple of major gaming networks with heavy-cloud focuses are missing though, so I ask Grove about XBL and PSN.

"We're a service, so really from our perspective, the monetisation model is that there's a subscription. Just in the same way there is for Netflix or Lovefilm, any streaming services"

"Well...bear in mind that they're their own platforms so that's probably not going to be the next one we move to," he says, diplomatically. "We're still really a PC-based platform, it's really about extending the reach of PC gaming platforms like Steam, Origin and UPlay.

"That gives us more opportunities to partner with digital retailers. They're selling keys, we're selling a service that gives people more reasons to buy those keys and keep playing. It's a model where we're not in contention with everyone else, but augmenting their service."

At 9.99 a month, the subscription is non-negligable, especially given that it comes on top of the 6.99 a month price for the PlayPack collection of games which OnLive has always offered. It's not clear what sort of numbers OnLive needs to subscribe to make this part of the business a viable one, but there's revenue from the publisher side, too.

"We have the usual types of publisher models and in the background we have other ways of monetising this with publishers," explains Grove. "So this continues to be a partnership model. But for them it's a more attractive model because it doesn't cannibalise their sales, it's supplements their sales."

In addition to the consumer business, OnLive is moving into B2B work with a service called OnLive Go. Go is a "solution to many problems," a service which will be tailored individually to the needs of corporate customers. Two very different use cases are already on the books - Gaijin's War Thunder and Linden Labs' Second Life.

"They're obviously very different. In the case of Linden Labs they have a very stable audience who love what they have, but the requirements for running Second Life have become quite high and high-end PCs don't have much mobility. What they wanted was to take that audience and improve their access.

"So we built an app which is a direct launch of Second Life - it puts you in the Second Life world from a tablet or a low-end PC. We've had users testing it and so far they love it. The Gaijin model shows the flexibility of the tech. Gaijin has War Thunder, which is a free-to-play game which is great once you get it going, but it takes a big download and takes a while to get going. Our app launches directly from Gaijin's download page and lets you get into the game immediately, to familiarise yourself whilst it downloads and installs.

"The expectation is not that the customer will play the game via OnLive for ten hours, but it gets them through the first bit.

"What they're trying to do is to increase customer acquisition, they want the customer to be able to get a feel for what the game is straight away, without the need to wait. To be able to try it out. Then you can worry about the download later, become more engaged. It gives people that initial emotional attachment to it, reduces the breakage of being too busy and thinking 'I don't have time for that now.'"

"We have the usual types of publisher models and in the background we have other ways of monetising this with publishers"

But the crux of OnLive's problems was always the inconsistency and unreliability of internet connections. Has technology caught up with OnLive's concepts?

"We've done a whole new UI, we've continued to move forward the systems we build in the data centres, they look to all intents and purposes like mid-high gaming rigs. That allows us to really power up what the games look like, we're able to really slide things to the right. We're also all about driving for 720p at 60fps. Graphically in our world 720p looks good, but the 60fps is all about latency.

"We've added additional data centres in North America, particularly around Chicago and Seattle. We're doing the same thing across Europe. We're also continuing to optimise for fast connections. When we first started doing this a fast connection was about 30-40 mbs. We came piling in at 6mbs - we were an HD stream when Netflix was still an SD stream. Now all of this stuff is HD and I'm on a 120mbs connection.

"We can't reach everyone, people in rural areas just don't have access to this sort of infrastructure, but our heatmaps match very closely with the growth of broadband deployment. We see our users growing with broadband. So if people have a faster connection we're dropping the 6mbs cap and letting them go up to 10 or 12, which creates a much smoother experience, graphically."

OnLive CloudLift is live now.

18 Comments

Renaud Charpentier Lead Designer, The Creative Assembly

66 144 2.2

Unusable for AAA twitch gameplay and useless for less intensive games that can very well run natively on my weak laptop or tablet.
Will also kill my bandwith cap at home and not work through my 3G contract, but that's nearly a secondary concern in this proposal.

The idea of passive graphical terminals died in the 90s, trying to revive that concept now that everyone has a Cray mainframe in his pocket but 3G connections doesn't make any sense. Expect a second crash in the years to come or a 3rd adjustment of the business plan to end up as a demo/mkt platform for heavy but slow games.

Posted:7 months ago

#1

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

888 1,320 1.5
Where do I apply to to get this banned in my area? Our "broadband" speed is bad enough without inappropriate services like this and BBC iPlayer sucking up all that remains.

If we could get back to just having the internet on the internet, I'm sure it'd actually be useable. Can you imagine a world where TV was broadcast and games were played on gaming machines? Nah, never take off.

Humbug.

Posted:7 months ago

#2

Adam Campbell Associate Producer, Miniclip Ltd

1,182 971 0.8
For me, the most interesting thing about OnLive after all the controversy and doubt was the fact that it actually WORKED.

My expectations were definitely exceeded by many orders of magnitude and this was before we even had UK servers for it. That said, its a pity the company's strategy couldn't have been a little safer.

OnLive filed for a form of bankruptcy protection whilst Gaikai was bought by Sony for $380 Million. This still has potential but it depends on so many things.

Edited 1 times. Last edit by Adam Campbell on 5th March 2014 9:40pm

Posted:7 months ago

#3

John Pickford Owner, Zee 3

46 152 3.3
Popular Comment
Who in their right mind is going to pay a subscription to play their own PC games remotely on probably unsuitable hardware (tablets etc.)?

It would be like Netflix doubling their fees and restricting you to films where you already own the DVD or BLU Ray whilst downgrading the visuals to VHS quality. Not a compelling prospect.

Posted:7 months ago

#4

Justin Shuard J - E translator

45 176 3.9
I'll give it six months before you can copy and paste articles about Onlive going bankrupt again.

Posted:7 months ago

#5

Matt Jeffries Senior Producer, Telstra

18 17 0.9
Why do these companies continue to burn millions on a product no one really wants? Seriously, who wants this? Which PC gamers asked for this?? Was it console gamers? Tablet gamers?? Who?

I don't want to play my PC games on my tablet or smartphone, and pay a subscription for the privilege. They weren't even designed to be played on a tablet or smartphone, and trying to jam a mouse and keyboard control system into something that doesn't have a mouse and keyboard is just dumb. And if I want to play my PC games on my big screen TV I'll use Big Picture to do it. Or just use my PSXbox.

This is fancy tech looking for a problem to solve. And to suck your bandwidth. And charge you a sub fee for the privilege.

Edited 1 times. Last edit by Matt Jeffries on 6th March 2014 4:55am

Posted:7 months ago

#6

Alfonso Sexto Lead Tester, Ubisoft Germany

820 653 0.8
Well, best of luck in this second round. First step: do not have a psychopathic CEO this time around.

Posted:7 months ago

#7

Neil Young Programmer, Rebellion Developments

302 383 1.3
It feels like it might work as part of something else - something like a youview box could presumably run this, and an add on fee, with free controller included, would anything big-picture compatible on steam to work. Would need a library of appropriate titles first; the selection of steam games seems limited right now. Selling it via the isp like this would allow them to manage the traffic if needed.

Posted:7 months ago

#8

Jed Ashforth Senior Game Designer, Immersive Technology Group, Sony Computer Entertainment Europe

111 198 1.8
Those subscription prices are insane. We're all waiting for the gaming equivalent of Netflix but this isn't the way to go.

Selling a streaming solution on the back of a promise that you'll be able to continue your game while travelling is ridiculous - I can barely get a usable net connection just for browsing on a train now, and streaming just doesn't work. If they're aiming it instead at people who spend a lot of time in hotels and stuff - same deal, the likelihood of a decent enough wifi connection to stream gameplay with low enough latency is almost non-existent currently, in my experience. I'm not sure who the demographic is for this - anyone who travels that much and is so into gaming they're willing to pay those subs every month will surely already have a way to take their games with them.

Like Matt said, fancy tech looking for a problem to solve.

Posted:7 months ago

#9

Chung-wei Kerr SEO Account Manager, Mindshare

8 11 1.4
I actually approve of this move (over their previous attempt to create a new walled garden), and I think this kind of service will start to make more sense as 4G becomes more wide-spread. But I feel they need to rethink their business model a bit to make it a more compelling service. It's currently priced too high for a service that people are only going to use occasionally. Perhaps there's some lessons to be learnt from Spotify's business model?

Posted:7 months ago

#10

Thomas Dolby Project Manager / Lead Programmer, Ai Solve

340 291 0.9
I share the same doubts that others have in that I don't see the practical application for AAA gaming on the go. Any game I've ever played that tried to use PC/Console controls on a touch screen handled terribly. What are the chances that developers will give a huge portion of their time to ensure that the game will handle properly on a touch screen? You could argue that users could use bluetooth controllers, but who will carry those around in addition to their phone/tablet? What percentage of time would users be in a position to put their phone/tablet down so they had both hands free for a controller? Let's not even get into the fact that areas that have great mobile internet coverage are few and far between in this country.

For me personally as a consumer, I'd much rather just have this limited to the PC but act as a Netflix-esque solution, in which I pay a flat rate and I have a huge library of games I can instantly jump into. If I really love the title, I might just invest in a real copy to make the game-play as smooth as possible. Currently I have little desire to play my AAA games anywhere but at home, especially if you're trying to charge me for it, but that's just me.

As a developer, I don't like the idea of having another platform to keep in mind while developing to make sure my product will behave well everywhere it is played. Developers have enough things to worry about with meeting deadlines than to consider yet another set of design constraints that this seems to impose. I imagine the reality will be that OnLive will be at the bottom of the list of priorities when getting a game to market, and as a result consumer uptake will suffer, and thus developers will continue not to care. It's a self defeating business plan.

This plan sounds like it'll be dead on arrival, I can't see AAA gaming on the go working out for the reasons above, and then you're left with streaming the games you already have at home, for which this is a very poor solution to the problem of "how do I play my PC games downstairs". The only niche I can see is Mac and Linux gamers being able to play Windows only titles, but that hardly seems like it would sustain a company of this size.

Edited 2 times. Last edit by Thomas Dolby on 6th March 2014 1:23pm

Posted:7 months ago

#11

Neow Shau Jin Studying Bachelor in Computer Science, Universiti Sains Malaysia

52 81 1.6
I'm surprised no one has mentioned Playstation Now yet in the comments, why all the negativity towards OnLive, while relatively neutral when people are responding to PSNow? Is it due to PS Now targeting a slightly different market?

Edit: Figured that out, PS4 to PSVita Remote Play does the same thing with no subscription fee. Allow you to play the home console game you own on the go. While it seems like the same territory as Playstation Now at first, their new model is basically PS4-PSVita remote play with a subscription fee.

Edited 1 times. Last edit by Neow Shau Jin on 6th March 2014 4:12pm

Posted:7 months ago

#12

John Pickford Owner, Zee 3

46 152 3.3

Posted:7 months ago

#13

Nicholas Pantazis Senior Editor, VGChartz Ltd

1,020 1,467 1.4
@ Neow Actually no, nothing has been said about letting you play a game you already own on the go without rebuying it on PS Now. In fact it's pretty clear that is NOT the case. Also a subscription fee IS in the works for PS Now. Furthermore, their technology, like all streaming technology, isn't without significant lag.

Posted:7 months ago

#14

Nick Parker Consultant

288 158 0.5
Let's be clear about one thing, there is no minimum subscription contract, you can buy a month and then stop which could be good for those weeks away with just a laptop or tablet. I don't wish to kick off a debate akin to the free to play rows we see here far too often but these early forays into streaming games (see also PlayStation Now) are important part of the learning curve for what will one day be considered a viable means of digital distribution. I'm not sure that making money at the moment is crucial although I am sure that OnLive would not want to hear that.

Posted:7 months ago

#15

Neow Shau Jin Studying Bachelor in Computer Science, Universiti Sains Malaysia

52 81 1.6
@Nicholas,

We still don't know about PSNow's details, but PSVita allow us to play games we already own on our PS4 back home on the go through remote play

Posted:7 months ago

#16

Klaus Preisinger Freelance Writing

1,134 1,171 1.0
The maximum bandwidth of an Internet connection has little to do with the latency of the connection. It is pointless to quote average bandwidth, when latency is such a determining factor for a service. Sure, more bandwidth means less artifacts in your video, but you do not get around lag.

Your input travels there, gets processed, travels back, then there is the delay from your computer to your display. Round trip time somewhere between 100 and 250ms, depending on cable or DSL. In Germany you can have 100Mbit at home and still only get 6 during peak hours, on top of German providers screwing you over with the peering and no net neutrality in sight.

For what? For a $10 a month service which any console manufacturer could utterly annihilate at will if it started to hand out its consoles for a $10 per month rental fee on a two year contract? Tip to the head for OnLive's technical achievements so far, but it is still not going in their favor in my opinion.

Posted:7 months ago

#17

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