Comment by sounds | Hacker News Reader

Comment by sounds | Hacker News Reader

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Came to comment on this specifically. OnLive was doing "cloud gaming" as in pre-render frames in the cloud and stream them to the device. It has the initial wow, but the devil is in the details, and OnLive had to solve them all at once:

1. Data caps are now the norm. A service that streams video 100% of the time is swimming upstream. OnLive would also need to recoup the significant costs of an uplink capable of serving all its customers full-HD streams. Typically a video service heavily uses a CDN (think Akamai) to only upload a few streams and then have the CDN push those out to edge servers. OnLive needed enough bandwidth to be its own CDN. And cellular data is an even thornier problem in terms of reliable throughput AND latency, which both have a direct effect on OnLive's service.

2. Game Studios are famously protective of their high-value assets. OnLive needed to convince some AAA studios to do a new release of their titles on its service. Engineering the games to work well with OnLive isn't the only problem here: it would be easier to be wholly acquired by a big studio than to convince anyone in the industry to do a deal that fit OnLive's marketing. Game studios want to see big up-front profits on opening day. OnLive's marketing was more along the lines of a trickle of profits over a longer term.

(Yes, they had some titles, but they needed bigger ones.)

3. The OnLive marketing about enabling some amazing capability (like cinema-quality graphics or breakthroughs in AI) swims upstream against what the "cloud" is supposed to offer. An OnLive session for one customer takes several machines, while the "cloud" basically makes money by stacking idle VMs so it's many customers to a machine. The only way OnLive would make money is if everybody rented the AAA title and nobody played it.

There is some really interesting tech in that space, but those are some basic problems with what OnLive was trying to do.

>(Yes, they had some titles, but they needed bigger ones.)

The tragedy here is, they had bigger titles. At the last minute before launch, they pulled all EA titles from their service. When rival Gaikai got the rights to offer demos for EA games (not to actually sell them,) CEO Steve Perlman went batshit-crazy irate and pulled the plug. From then, even games that had been confirmed or greenlighted were pulled if Gaikai got them first.

I recommend anyone who's interested in what went wrong read this story from The Verge:

http://www.theverge.com/2012/8/28/3274739/onlive-report

If you leave the battlefield to your competitor that's not really a winning strategy.

How is GaiKai doing now that OnLive has folded? Are they headed towards running out of cash as well at some point or are they doing better?

They were bought by Sony a bit back, actually.

And OnLive folded, and sold themselves to a newly created company named OnLive. So, it's still there. And I think still has a lot of potential under the right person. (With enough money.)

I still half-expect Steam to eventually offer streaming of games players already own for a small monthly fee. I'd expect them to make gangbusters if they did.

Not only were they bought by Sony, they were bought by Sony for $380 million dollars.

Shows what a difference a business model can have. They both had cloud gaming technologies, but while OnLive wanted to sell it right to consumers, Gaikai went for the publishers.

> From then, even games that had been confirmed or greenlighted were pulled if Gaikai got them first.

Maybe these titles had high licensing costs (regardless of whether any OnLive users rented them or not), and they figured if their competitor had the game less people would be playing it with OnLive? So they'd be more likely to make a loss on the licensing cost.

Former staffers told us Mass Effect 2 and Dragon Age: Origins were ready and would have launched on day one if it wasn't for Steve Perlman. At GDC 2009, when OnLive revealed itself to the world in style, a rival named Gaikai did the same behind closed doors, and when Gaikai CEO David Perry came by the OnLive booth to greet his competitor, Perlman starting screaming at him. On June 17th, 2010, the day OnLive launched, Gaikai announced a multi-year deal with Electronic Arts. Perlman received the news in the OnLive booth at E3 2010. "He went ballistic," one witness recalls. "We had to slam the conference room shut and crank up the music so people wouldn't hear him."

That doesn't sound like a business decision to me...

"At the last minute before launch, they pulled all EA titles from their service. When rival Gaikai got the rights to offer demos for EA games (not to actually sell them,) CEO Steve Perlman went batshit-crazy irate and pulled the plug."

Yikes, that's not a library at all. Think of this analogy "My local library was going to offer the most recent Stross novel, but it turns out that's available at the library in the next town, so they had a book burning party instead"

You forgot:

4) The supposed benefits of cloud gaming were never as big as a deal in the first place, and quickly becoming less and less interesting.

Today even almost the lowest-end of notebooks you can buy will get you a better gaming experience than OnLive (better graphics, less latency, no internet connection required, choose all your own games), for gaming on the go phones and tablets are pretty capable, and last but not least you can pick up a used PS3 or 360 with a whole stack of games for less than 1 year of OnLive.

I've said from day one that the whole idea of building expensive, specialized data centers in the hope that people will pay to play games on them, is simply a stupid business idea. Casual gamers will happily use whatever cheap device to play simple games, and serious gamers will always want the best possible gaming experience, which is not what OnLive will ever be able to offer. Cloud gaming is a lost cause IMO.

1. I can run PC games on my Mac

2. I can run games that would barely work at a stutter on my integrated graphics.

3. I can try games out in seconds without installing 7gigs

4. I can rent games for a day or so without installing 7gigs

5. I can subscribe to hundreds of games and play them without installation.

6. I can play (some) PC games on my phone or tablet

7. I bought a £40 online mini-console as small as cigarette packet that came with a great quality gamepad and lets me play my games on the TV without needing to wire up a PC.

8. My entire game library is instantly available anywhere without installing anything other than the OnLive app.

So you are one of the few happy customers who is prepared to pay for an OnLive subscription to get the benefits you listed, great for you. I can make a list of downsides of cloud gaming that would be at least as long, which are prohibitive for me to use the service.

The million dollar question is how many people there are that -like yourself- prefer paying for a service like OnLive, compared to the number of people that will simply buy their own hardware, or just use whatever hardware they already have anyway.

You can justify spending money on OnLive as much as you want, but my point was not that the service is completely useless, just that the target audience is too small to make the service profitable. Hardcore gamers build their own rigs or are prepared to buy a console once every few years, casual gamers will play on whatever they have available, people who don't play games don't care. It appears there's just not that many people who are so hell-bent on being able to play all their games, anywhere, on any platform that happens to be available, that they want to pay for a subscription service that somewhat allows them to.

I'm not really sure why I'm even debating this anymore (like I had to when OnLive just launched and got flamed by hordes of people with the same arguments like yours, because OnLive would surely be the future of gaming). I think the 'economics of OnLive' more or less have proven my point sufficiently.

Well, they had to do the customer validation :) .

My untested hunch is that there is a good enough market for these services.

I might be a customer too, I'm a former gamer that now has to cope with work, study and very soon a family, having an "instant-on" service would be worth it for me.

And why is it prohibitive for you? It says it used to cost U$ 4.95/month, which I perceive as really cheap (as compared to U$ 50 for a title like Diablo III).

Much like the Nintendo Wii, I don't think that hardcore gamers is the target demographic.

Edit: see sshirkov's comments, I fall in the same demographic I guess.

http://news.ycombinator.com/item?id=4635436

> And why is it prohibitive for you?

For starters, there are no data centers near enough where I live, so the service is not available ;-)

But even if it were, there are many reason a service like this has no value for me:

- I have 2 consoles, a tablet, a laptop and a desktop, so when I'm at home I already have plenty of options. I can't imagine this will ever change, because I need my computers for work, and the games I like most are very often console exclusives.

- I never take my tablet on the road, and I only take my laptop with me if I need it for work, so a cloud gaming service for playing away from home doesn't make much sense for me.

- In terms of cost savings, I don't really see the benefit either. To play OnLive games you still have to pay for the game license (in addition to the subscription fee). Since I buy almost all my games second-hand or over a year after their release, I'm not going to save a lot of money on the games themselves. All my consoles have tradionally lasted over 6 years, so the write-off on them is minimal. On a side note: if I was strapped for cash and couldn't afford to buy hardware or games, I wouldn't be subscribing to any subscription gaming service anyway, I would spend however little I had on useful things.

- I don't really play games a lot, less than 10 hours a week, and I almost exclusively play a single game at a time until I finish it. This means it takes really long before I finish games, often over 2 or 3 months. This basically means the rental-model for individual games does not work for me.

- I like to play classics and 'vintage' titles, e.g. PS2 games or classic XBLA games. OnLive seems to mostly target mainstream, popular and newer games.

If I think long enough I can come up with other reasons why a cloud gaming service like OnLive is not for me. Just to be clear: I can see how it would be great for certain players, but I'm highly sceptical about their numbers, and how much they would be prepared to pay for the service.

My conclusion is (and has always been) that when it comes to cloud gaming, downsides > benefits, and costs > profits, which makes it a no-go in terms of business case. I have yet to see someone prove me wrong (GaiKai being acquired for big $$$ doesn't count, because it was obviously bought by Sony for other reasons than profitability).

Ah, I didn't get the point that you have to pay for the game license. I thought it was something like a Netflix for games.

That would be a deal-breaker for me.

Thanks for the clarification and explaining the downsides.

Many wouldn't apply for me (my latest console is a PS2, for example), but certainly the non-availability in my region is probably a given, and having to pay for each game is the deal-breaker for me (unless the price is minimal/equivalent to a rental).

A few clarifications

OnLive is free to join.

There are 3 purchasing models:

1. Buy the game outright (or until OnLive folds ;-)

2. Rent the game for a short period

3. Buy a bundle (the 'Play Pack') which gives you access to a huge list of indie or older games for a pretty low monthly cost). They are a mixed bag. Some old A-list games, some really interesting indie games and some junk.

My OnLive story is I paid for a game because I was curious about the service, every other auto save it crashed. Poked around the internet for a few min, found out there is a race condition that can be avoided by turning on V sync. The lack of control and being able to fix my own issues will stop me from being a long term customer for them, but I will keep them in mind for rentals.

You are absolutely right and it is kind of obvious. Nevertheless, knowing that, what surprises me the most is that they achieve to secure $40M in funding.

Investment companies should be a bit more careful when they put their cash on the table ($23M from Belgacom, for instance).

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