Everything You Need to Know about OnLive -- Is this Your Next Gaming Console?

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After seven years of stealth development at Rearden Labs (a startup incubator), OnLive today unveiled itself as a new game service to deliver on-demand games. Basically, instead of running your games on a PC or console at home, you connect your HDTV to a small MicroConsole which receives compressed video from a remote server that actually renders and processes your games. The immediate benefits of the service is its low entry cost, since you don't have to build a high-end gaming PC or invest $500 on a next-gen gaming console. Games purchased with OnLive are activated on remote servers and the only data that is streamed to you is gameplay video and audio. You never have to download software, patches, or handle physical media. Think of it as video-on-demand but for games.

We met with OnLive's founders at Rearden Labs last week to get a sneak preview of the service, try out some games, and grill the developers about how OnLive actually works.

Serious Hardware and Software Mojo Within

Streaming video from Youtube takes seconds to buffer, and that's for low-resolution clips. How can OnLive stream gameplay that's rendered in real-time without any delay? Their secret sauce is a new video compression techology that they call "Interactive Video Compression".  Cutting-edge data servers farms utilize massive parallel processing to reduce gameplay video into a proprietary compression format that integrates the randomness of the existing internet broadband architecture into the codec. Steve Perlman, the founder of OnLive, used to work at Apple, and helped develop the first versions of Quicktime, so he has a long experience with video codec and compression.

This isn't a technology that is easily duplicated, either. OnLive has filed over 100 patents to protect their tech, which uses both custom-brewed hardware (Nvidia has been a development partner) and software.

OnLive is Actually PC Gaming (For Now)

Even though OnLive calls its hardware a MicroConsole and uses a game controller that looks like a hybrid of the PlayStation 3 and Xbox 360 gamepads, the physical hardware that's running OnLive games is 100% PCs, meaning that the games run in Windows. That's why the 16+ titles being shown on the system are all PC games, including Mirror's Edge, GRID, Company of Heroes, and Lego Batman.

The actual PC hardware is a little more than what you'd find on your typical gamer's desk, though. OnLive data centers run a variety of enterprise-level servers with varying system configurations. Some servers may be more processor intensive while others have multiple GPUs -- the top end rigs in the current OnLive server hive utilize dual Nvidia 8800 GTX cards to give you playable framerates on graphics-intensive games like Crysis.

Depending on what game you select to play, OnLive will pick a server that meets a "framerate boundary" requirement they've attributed for that game. Extensive testing on their end lets them know what server hardware is required for each game, and you OnLive has promised to upgrade their server hardware regularly to keep up with the maximum spec requirements of upcoming next-gen titles.

Your personal game files, game state, and OnLive profile is kept on 16-drive RAID arrays, so loading games is much faster with OnLive than at home. In our test of the service, we loaded up a Crysis multiplayer map in under 5 seconds, and blazed from the main menu to a playable game of GRID in less than 30 seconds. OnLive is making a big deal about its ability to upgrade hardware at no cost to you, but we think having insanely fast load times is going to be one of the service's best features. In fact, OnLive founder and CEO Steve Perlman told us that one of his personal goals is to one day eliminate the loading screen completely from gamers' lives.

But the thing we find most interesting about OnLive is that this is actually PC gaming masking itself as a console platform. While it's true that Xbox 360 and PS3 compatibility will eventually come to the service, the games they're demoing right now are all PC games. If OnLive really takes off, game publishers are going to find more incentive to develop high quality PC games without worrying about minimum spec, hardware compatibility, and piracy. It's possible that OnLive will emerge to be the salvation of PC gaming -- a notion that we find fairly exciting.

OnLive Requires a 1.5Mbit Broadband Connection

You don't need fancy a gaming PC or expensive console to use OnLive, but the service does have one big technical requirement: your house must be equipped with broadband service. At the bare minimum, you must have a 1.5Mbit/sec internet connection to play OnLive games at SDTV resolution (720x480 widescreen) and at least 5Mbit/sec of bandwidth for HDTV gaming at 720p (1280x720). OnLive estimates that 71% of households in the US meet the minimum requirements for the service, while 26% are capable of the HD service (more if you just look at the gaming population).

Before signing up for OnLive, you'll be required to test your throughput and latency to OnLive servers to ensure that you're qualified for the service. Keep in mind that since gaming with OnLive using lots of bandwidth, you will have to throttle back your downloads and bittorrent traffic when using it.

OnLive Gaming Latency Caps at 80ms

One of our big concerns we have about OnLive is the amount of latency (or lag) that you'll experience when playing games, since you're sending controller input signals to a remote server and receiving video images back. When playing a game at home, you experience almost no latency because the input signals only go from your controller to your in-house system and back. Here, inputs go to through your desktop or MicroConsole, travel to your ISP, then to OnLive's server, where they're processed and a rendered image has to be compressed and sent back the same path to your home -- and that's just for single-player games. But OnLive assures us that they've optimized their system so that the maximum of latency you'll experience between input and display is 80 milliseconds.

80ms might not seem like a lot for PC gamers who are used to sub-50ms ping to server in multiplayer games, but OnLive points to recent studies that have shown that 80ms is pretty much the threshold for most people before their brain can process and notice any lag in gameplay. Sure enough, when we played a racing game -- a genre that demands quick responses -- with OnLive, the response time between a button press and a reaction on screen was instantaneous.

OnLive's game servers are actually located in one of five planned data centers (ones in Santa Clara and New York are confirmed), so while the service will depend on where you live, coverage will extend across the entire United States (and even technically parts of Canada). Just like with bandwidth, you'll be required to test your latency to these data centers before you can register for an OnLive account. And just because you live close to a data center doesn't mean you'll immediately be eligible. The "last mile" of connectivity -- that between you and your ISP -- will most likely be the determining factor.

Technically, OnLive works anywhere in the world, and their plan is to definitely expand beyond the shores of the US. A recent test  showed that games were even playable from overseas in the UK while dialed into the New York data center.

OnLive Won't Support Custom Mods and Hacks

While a subscription or OnLive account entitles you to individual game profiles and saved gamestates, you won't actually be able to modify games as you could on a home PC. OnLive works with publishers to make their own modifications to game files to make them work with the service, but options like graphical settings (resolution and otherwise) will be off-limits. You can of course change your control scheme and bindings, but that'll be the extent your game configuration.

Add-ons like Fraps, game mods, or even custom maps won't be possible (at least not yet), since you're not allowed to modify game files or access the Windows desktop on the game server. It might not even be possible access developer tools like the game console to enable cheats or execute custom scripts.

MMOs and subscription-based games, however, will work with OnLive.

The Onlive Console and Controller

To play games with OnLive in your living room or away from a PC, you'll need the OnLive MicroConsole, a thin box that's no bigger than a portable hard drive. This tiny box acts as a audio/video receiver as well as manages controller input. The MicroConsole sports two USB ports that are compatible with standard keyboard, mice, and PC gamepads (including the Xbox 360 wired controller), as well as wireless connectivity to up to 4 proprietary OnLive gamepads. An ethernet port connects the box to your router or broadband modem, and HDMI and Optical ports facilitate the AV output (720p max resolution, but SD gameplay also runs through HDMI). Alternatively, audio can be broadcast to bluetooth headsets, with support for stereo bluetooth. It's also powered by a micro-USB port.

The OnLive gamepad has buttons arranged like the Xbox 360 controller, but sports a row of extra buttons on the front of the pad to navigate through media clips or record "brag clips." Since the data centers capture and process every frame of video that you play, they can seamlessly record footage for you to save and share with friends on the service. OnLive hasn't announced pricing for its MicroConsole or controller, but you can bet that we'll be playing it with our keyboards and mice on a PC.

OnLive Will Run on PCs and Macs from a Browser

The service will run on a desktop computer or notebook, and you'll again need a broadband internet connection. Other than connectivity, your system will have to support accelerated video processing, which even the latest onboard GPUs can handle. We saw OnLive running on a variety of hardware, from a generic desktop tower to MacBook Air. Yes, Macs are supported, as long as they run Intel CPUs.

You'll only be required to download a 1MB browser plug-in to play OnLive. The technical team considered a desktop client, but decided that a browser app would be more user-friendly and unobtrusive. Since gaming sessions are essentially video playback, you can run OnLive in a window and Alt-Tab to multitask while connected to the service.

Mass Spectating is Indeed Awesome

Another really neat feature about OnLive is the concept of mass spectating. When OnLive's UI boots up, you're greeted by a massive grid of game videos, showcasing thousands of games being actually played at that moment by other players using OnLive. Since OnLive works by capturing and processing video output, every frame of gameplay video that's rendered on OnLive can be stored and manipulated in cool ways -- in real-time. You can scan along this wall of footage, highlight any frame, and zoom in to immediately spectate that gamer's actions.

This feature, coupled with OnLive's expandive community capabilities (friends lists, profiles, video sharing, matchmaking, etc) makes the prospect of mass spectating very feasible for online tournaments or ESPN-like video feeds. A million people could be watching a Counter-Strike finals match with no server slowdown or additional modding required.

Expect OnLive to Expand Beyond Gaming

Nothing has officially been announced, but given the potential of OnLive's video compression and distribution services, you can bet on them expanding beyond gaming distribution. Movie rentals and television broadcasts are the obvious next steps, especially since one of OnLive's big financial backers is Warner Bros. However, we would also predict that teleconferencing, remote computing, and other "cloudy" services are also in the cards.

Plus, since OnLive's telemetry tracks every input and visual output of its players, there are huge opportunities for software publishers to use the service as a means to beta-test and tailor game experience to gamers needs, making design decisions based on thousands of hours of gameplay footage.

So when can you get yours hands on OnLive? The company is currently running an internal friends & family beta, and will expand to an external beta this summer. The service is expected to fully launch this Winter. Most of the leading game publishers have signed on as partners, and game releases on the service will be nearly simultaneous with their console and PC counterparts.

We'll be getting more hands-on time with OnLive at this year's GDC, and will more details as new information surfaces.

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