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The Revolution Will Be Televised

OnLive, Gaikai, PlayJam and TransGaming present the case for games on Smart TV

Perlman insists that, with an OnLive-enabled Smart TV, the transition from watching television to playing a game will be "as easy as changing channel," but even if that does prove to be the reality his comparison to the success of Netflix strikes a false note.

If OnLive is positioning itself as a service for AAA core games, its total addressable market is people interested in that product, and not necessarily anyone with access to OnLive. The rapid growth of Netflix may be attributable in part to the ubiquity of the service, but it also had a far larger audience of interested consumers than the average blockbuster game. With Netflix, the scale was already out there in the form of people who watch movies; it just found a more efficient and consumer-friendly way to harness it.

Indeed, discussion of OnLive's audience is the only area that Perlman is anything less than totally convincing: core gamers who need a new television and think, 'why not?'; people that are already using OnLive on PC and see it as an extra convenience; casual players attracted by its spectator and group chat features. All could prove to be strong niches, but they don't approach the reach of Smart TV.

Of course, Smart TVs are just one device where OnLive's users can access the service - PC, Mac, iPad and Android-based tablets are also supported, with smartphone integration on the way - but the focus on core games also puts it in direct competition with consoles in the affections of its target audience. However, Perlman doesn't see why OnLive needs to be an either/or proposition for console gamers.

Smart TV is not only a very important part of our strategy, it's just widened our reach, and it's something the publishers will want

David Perry, Gaikai

"It's going to be an evolutionary process," he concedes. "I don't know of any console gamer who has a problem with getting a demo of a game instantly rather than downloading it first. I mean, the early Xbox 360s only had 20 GB drives... So we're finding that there are certain activities that core gamers are certainly going to like on OnLive."

"As far as when console gamers decide to move over to OnLive, and have it be their primary device, well, it will happen when it happens."

Exactly when console gamers see a service like OnLive as a valid alternative to their consoles - as opposed to an occasional additive - might be a more important question than Perlman's relaxed attitude suggests. Certainly, OnLive's most prominent potential rival, Gaikai, has adopted a more reserved model that allows it to deal only with publishers.

Rather than creating a Steam-style marketplace where games are purchased by consumers, Gaikai simply offers its technology as a way of supporting instant, streamed game demos. If a user wants to buy the game as a result of playing the demo, they will click through to the relevant publisher's online shop. Gaikai's revenue is generated from deals with the the publishers, depending on the number of minutes users spend streaming content with its technology.

Obviously, this makes Gaikai an easier pitch than OnLive, which takes a cut of the revenue from each game it sells, but crucially it also creates some distance between the company and the buying habits of the consumer. In the future, Gaikai's technology could be used to stream entire games, but its reticence to use it for that purpose now is telling.

Nevertheless, CEO David Perry is watching the emergence of Smart TV with great interest, and the fact that Gaikai streams through a browser means that it doesn't even need to form partnerships with manufacturers. OnLive has to put a chip inside the television; Gaikai just needs to be compatible with its operating system.

"Ultimately, yes, Smart TVs being able to play the latest, greatest games is not only a very important part of our strategy, it's just widened our reach, and it's something the publishers will want," he says.

"But we do believe that as time goes on, you've got to remember that Moore's law is in our favour... The efficiencies of the machines just keep getting better and better, and there's a lot of energy going in to saving electricity, and so the cost of hosting keeps going down."

"It's all going in the right direction for us... Even if Gaikai did nothing at all the Intels and the Nvidias and everyone else out there, the motherboard makers, everybody is working on how to bring the power costs down. If we just let them do their jobs they'll make our business more efficient over time."

For both Gaikai and OnLive, the ability to play games natively through a television is just one strand of a service that encompasses numerous devices. For companies like PlayJam, however, it is the aim of the entire business, and this narrow focus affords a different perspective on what a Smart TV games service needs to offer.

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Matthew Handrahan avatar

Matthew Handrahan

Editor-in-Chief

Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.

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