OnLive Interview: Founder Says Console Makers Can’t Compete Until 2022

After trying the newly announced OnLive gaming service, I was impressed but skeptical. So I asked its lead creator Steve Perlman nine questions, many of them doubting his project will work against a Wii or without a “Halo.” He replied.


Multiplayer: One of the first things many gamers will think when they hear about OnLive is that it just can’t work. They’ll worry about lag, about the effects of too many people using the service at once and all sorts of other scenarios that might prevent OnLive games from playing smoothly. You let me put my hands on the service when we met, but that was just one test case. What kind of stress tests have you already put this service through and what can you say to people who doubt this can work as well as you say?

“Some would pull out the Ethernet cable to see if the game stopped, and even then, some didn’t believe it until it was running on their own computer at home on their own DSL or cable modem.”

Steve Perlman, Founder, OnLive: We can understand why they’d be skeptical that something like OnLive works! Frankly, that’s the typical reaction we received when first presenting OnLive to the CTOs of the major game publishers. And, even when the demo was working, some would pull out the Ethernet cable to see if the game stopped, and even then, some didn’t believe it until it was running on their own computer at home on their own DSL or cable modem. In one case, even that wasn’t enough: The CTO had his gamer teenage son try OnLive on his home connection. The kid thought the game was simply playing normally. At that point the CTO said that he was blown away. He would not have thought it was possible, but clearly we had figured out how to do it. That publisher, as well as nine others who also put OnLive “through the ringer” are now showing their games on the GDC show floor. They wouldn’t have done that without thoroughly verifying that OnLive works at least as well as a console, PC and Mac.

And, it’s no accident that OnLive works so well. It took many years of development, testing, and refinement to get it to work through the vast range of Internet hookups in the home, and there are a huge number of particular mechanisms we’ve had to build into the OnLive system to overcome each particular issue we’ve run into. OnLive has been tested in hundreds of homes through the US, through a wide range DSL, cable modem and fiber connections, and through any manner of consumer firewalls, routers, switches. Now, you hook up OnLive and it runs smoothly. But, there is a huge amount of technology behind the scenes making that happen.

MTV Multiplayer: Certainly, you’re not the first people with this idea. Why don’t you think anyone has pulled this off before?

Perlman: No one has pulled it off because it’s an immensely difficult technical and practical execution challenge, involving deep knowledge and experience across many fields. To make OnLive work involved fundamental work in psychophysical science; custom chip, hardware and wireless engineering; complex real-time software — from the lowest- to highest-level, and real-time network engineering down to the sub-packet level. And, it required a deep understanding of business structure in the video game, Internet, hosting, server and consumer electronic industries. Then, finally, it required an enormous amount of just practical execution: testing the system in hundreds of homes and ironing out every wrinkle to make it operate seamlessly.

There are few major corporations, let alone startup companies, with the depth of knowledge required in all of the areas that were required to develop OnLive. And, it is rare to find today corporations or investors with the patience to wait seven years while such an intricate system was developed and refined, particularly given that for many years it was not clear it would ever work.

“We think it is unlikely there will be another system like OnLive anytime soon.”

And, now we’ve met with the top publishers, top broadband operators and top equipment makers, etc., who clearly would have had anything like OnLive brought to their attention. Since no one knows of any other practical system that exists, we presume that no other one does exist. Given the immense multi-disciplinary complexity of OnLive, the time that was required to address the practical execution issues, and the fact we have over 100 patents and patents pending, we think it is unlikely there will be another system like OnLive anytime soon.

MTV Multiplayer: What kind of gamers do you hope this kind of service could attract at launch and how is that guiding which publishers you’re courting now and which game libraries you hope to get into this system?

Perlman: The low cost of the service is a selling point for gamers of all types and skill levels — particularly those who might have been priced out of the previous cycles or simply gave up on trying to keep up with ever-evolving technology. From casual gamers to hardcore, OnLive offers a number of benefits and advantages over existing consoles and services. OnLive introduces games to a video-rich community of a massive scale, that allows them to try, buy, or even spectate the latest games. Our content partners are the biggest names in game publishing — companies like EA, Ubisoft, THQ and Take-Two, who will provide some of their hottest titles, at the same time those games ship to store shelves. The goal is to provide a wide variety of games that will appeal to a broad range of gamers who increasingly expect their entertainment On Demand.

MTV Multiplayer: Continuing in that vein, do you imagine OnLive as a good option for people who feel priced out not just of PC gaming but from even $250 Wii gaming?

“Side-by-side with Wii, yes the OnLive MicroConsole is far less expensive, but it is also the most powerful video game system in the world and constantly evolves in performance.

Perlman: Sure, there is no question that the OnLive platform will have the lowest cost of entry for a new user. But, to be clear, OnLive also will certainly be catering to gamers who are less price sensitive, and are seeking the highest performance games, and also it will be opening up a universe of games to Mac users who, before OnLive, have had a very limited selection.

So, side-by-side with Wii, yes the OnLive MicroConsole is far less expensive, but it is also the most powerful video game system in the world and constantly evolves in performance, and the user can enjoy the same experience on an entry-level PC or Mac. So, we don’t think the comparison will be only on economic terms. People will see the OnLive as a completely different opportunity.

MTV Multiplayer: What PC spec do you expect OnLive to be able to perform at when the service launches? And how do you project that spec to increase over the course of, say, OnLive’s first 12 months. How much more horsepower is the end-user going to feel like they’re getting?

Perlman: OnLive will initially support Windows XP, Windows Vista and Intel-based Macs running OS X. No GPU or fast CPU is required. Entry-level PCs and Macs provide the same experience as high-end PCs and Macs.

The PC or Mac required spec does not change over time. In three years, an entry-level PC bought today will still be able to play the then highest performance OnLive games. We realize this concept is a little hard to wrap your head around, given we have come accustomed to hardware obsolescence for just about any application you use on a PC or Mac. But OnLive is different. OnLive technology evolves in our server centers (in the Cloud), not in your home. The desktop (or MicroConsole) computing requirements remains the same.

MTV Multiplayer: The Xbox had Halo when it came out. A few years ago, the then-struggling Nintendo had Wii Sports with the Wii. It seems that one of the best ways to get gamers to choose a new gaming platform is to hook them with exclusive content. But that doesn’t appear to be part of OnLive’s business model. How can you pull this off without exclusive games that make OnLive a must-purchase?

Perlman: It’s hard to make direct comparisons for gamer motivation for choosing new consoles and “choosing” OnLive. Among consoles, many (but certainly not all) gamers do choose only one, and it is easy to see why: When a console comes out, you have an initial cost outlay of $300-$800, depending on platform and accessories, then you have to hook it up to your TV, download all the upgrades, etc., before you can play one game and see if you like the platform.

With OnLive, there is no upfront cost or hassle: you can try out a demo of any game with the PC or Mac you already by just downloading a browser plug-in that is smaller than Flash, and if you like OnLive and sign up, then we’ll send you an inexpensive MicroConsole for your TV.

“We see it as expanding the market, and indeed, think that many console gamers will use OnLive as well as their consoles.”

So, we don’t see OnLive as an either/or proposition with gamers. We see it as expanding the market, and indeed, think that many console gamers will use OnLive as well as their consoles.

Secondly, OnLive does have “exclusive content” of a sort. For example, we are the only way you can play high-end games like “Crysis Warhead” on a TV or entry-level PC or Mac. Today, only a tiny fraction of the gamer population has the tricked-out gamer PC required to play that game. OnLive is also the only way for Mac users to play a wide range of PC-only games within OS X.

And, in time, there will be very high-performance OnLive-only games that utilize multi-GPU multi-core servers, GigE networks and RAID arrays in the OnLive server center. There will be no home-based systems at all that will be able to run such games. In fact, we’ll be giving a sneak peak of a prototype showing the realism achievable in such games in the press conference and in the booth.

MTV Multiplayer: Refresh my memory: how many seconds (or fractions of a second) will it take from boot-up of OnLive to playing a game on the service that I’ve never played before? Or a demo? Can you calculate that?

“From the point I clicked to start OnLive to the point where a game was starting up was eight seconds.”

Perlman: OnLive takes a few seconds to test your connection, and then it depends on the user of course — how quickly you navigate through the user interface. If a user knows where to go, he or she can start playing any game in a matter of seconds.

I just timed our Beta service running on Vista through my cable modem. From the point I clicked to start OnLive to the point where a game was starting up was eight seconds. But I just clicked on the first game on the list. It might take another couple of seconds if the game you want is lower on the list.

Once OnLive is connected, though, you don’t have that initial connection test, so if you quit a game and start another one, that can happen in one or two seconds, again, primarily limited by your ability to deftly click buttons.

In terms of technical limitations, OnLive switches from one server (e.g. playing a game) to another (e.g. running the user interface or running another game) in 1/60th of a second.

MTV Multiplayer: Where do you expect OnLive to be sold? Not at game stores, right?

Perlman: We’re not going into a lot of detail on that yet. But, the millions of people who own Macs and PCs can immediately access the service on day one, by signing up and downloading about a 1MB client from We will also allow people to order the MicroConsole from Additional distribution methods will be disclosed closer to launch.

MTV Multiplayer: Should independent developers look you guys up or are you only working with big publishers?

Perlman: We’re engaging with developers of all sizes. In addition to offering a direct channel from development to distribution, OnLive opens completely new doors for marketing, promotion as well as a seamless way to connect with a large, engaged target audience.

As you will see at GDC, we’ve already got one independent on board: 2D boy. And, we think that the it’s so easy to develop for OnLive — with only one binary to reach PC, Mac and TV — that we will attract a range of developers. Because of the flexibility of the platform, we also expect to see people experimenting with the type of content they deliver—episodic games, perhaps—and pricing.

MTV Multiplayer: Your concept is an exciting one. Do you expect Microsoft/Sony/Nintendo to follow you in this direction of cloud-console-gaming? How soon? Or, if not, why not?

Perlman: The answer really depends on exactly how you define “cloud-console-gaming”. All three companies may argue that their current download-based online services could already be called that. Needless to say, though, they are very different offering than OnLive.

“We have at least 11 years to establish our business before there is a clone.”

If your question is whether one of these companies would be motivated to clone OnLive’s capabilities, and if so, how long would it take:

(1) Whether they are interested in cloning OnLive is a better question to ask them. They all have a deep (multi-billion dollar) vested interest in their current gaming model which (particularly in the case of Sony and Microsoft) will take years to recoup (if ever). That said, they may see an OnLive-type offering as a strategic opportunity, particularly in lieu of what they no doubt contemplate as an enormous investment needed to launch their next generation of console.

(2) If they are interested, whether they can clone OnLive is an easier question to answer. OnLive was an immensely complex engineering effort, and beyond that, it took years of testing in hundreds of homes to make it work seamlessly. Best case, it will take years to clone with a world-class development team. But, beyond that, we expect they’d have a very difficult time getting around OnLive’s patents. Beyond the underlying interactive video compression technology, OnLive’s patents also cover the layers of all the technology built on top of that compression that would be necessary to deliver a practical video game service offering. The first patents expire in 2022, so we have at least 11 years to establish our business before there is a clone.


OnLive will be demonstrated on the show floor at GDC starting Wednesday. We’ll have more coverage once we check it again there.

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