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Cloud Powered Gaming may rain on console makers Parade

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  • Cloud Powered Gaming may rain on console makers Parade

    Phones Get Game Power in the Cloud

    Peter DaSilva for The New York Times
    By NICK WINGFIELD
    Published: December 7, 2011

    We can shop on our phones and read magazines on our tablets. But playing high-end video games on a mobile device has been out of the question.

    That might be about to change.

    OnLive, a Silicon Valley start-up, on Thursday plans to release software that will let people play the richest, most graphically intense games on Apple’s iPhone and iPad, as well as on Amazon’s Kindle Fire and other devices based on Google’s Android software. In the past, these games have been far beyond the relatively anemic computing power of such devices, requiring the horsepower of a PC or a console. But OnLive runs all of the games on its service entirely on powerful server computers in its data centers and delivers them over the Internet, through so-called cloud computing.

    Other companies are trying to do the same thing, including Gaikai, a start-up based in Los Angeles. If they succeed, a shift to cloud gaming could have big implications for the incumbent powers in the video game business, mainly the console makers Sony, Microsoft and Nintendo. That is because running games in data centers means that consoles in the home can be far less powerful, relieving consumers of the need to buy a new generation of hardware in the future.

    At the same time, moving gaming into the cloud could help push the boundaries of what cloud computing can do, even on relatively low-powered mobile devices.

    Everything from FarmVille on Facebook to data backup services like Apple’s iCloud to Netflix’s streaming movie service are considered cloud applications. But playing high-end games in the cloud presents a much bigger technical challenge because of the importance of eliminating any lag between the moment a player takes an action in a game on his or her device, and when the game responds on the screen. Even split-second delays can turn serious gamers off.

    OnLive says it has solved this problem by figuring out a method of efficiently packaging video images of a live game that it delivers over the Internet, and that allows for instantaneous response to actions by players as they control the movement of characters within a game.

    In a recent demonstration in Seattle, Steve Perlman, the chief executive and founder of OnLive, showed a collection of well-known high-end games, including L.A. Noire and Unreal Tournament 3, on an iPad, Android phones and a Kindle Fire.

    Although the games were running on computers in an OnLive data center in Northern California, they responded immediately when a player moved a character around. Some games on the service have been adapted to respond to fingers on a touch screen, but many work better with a $50 wireless controller sold by OnLive. That’s cheaper than buying a traditional game console, which starts at about $150.

    “It’s amazing the performance he’s getting out of all these tablets,” said Richard Doherty, an analyst at Envisioneering Group.

    Mr. Perlman said OnLive would also soon introduce a service that let people run a full Windows desktop on iPads and other mobile devices, including Web browsers that can show Web sites with Flash, an Adobe graphics technology that is not otherwise available on iPads.

    Last year, OnLive introduced an earlier iteration of its service, letting people play games first on PCs, Macs and television sets through a small $99 device it calls the MicroConsole.

    Mr. Perlman predicted that the growing capabilities of the cloud, along with the high costs of introducing a new console, would lead to big changes in the business. Hardware makers can lose billions of dollars on new game systems before eventually recouping their investments through royalties from game sales.

    “It’s our view that probably there won’t be another console and that this current generation is the last,” Mr. Perlman said. “The economics can’t support it anymore.”

    However, even people who believe strongly that cloud gaming will become an important part of the market say they think that prediction is an overstatement. Michael Pachter, an analyst at Wedbush Securities, said cloud gaming was still too new for serious gamers to switch their habits. Internet connections in some areas are not fast and reliable enough for gamers to depend on a cloud gaming service all the time.

    “Realistically, there’s one more” generation of consoles coming, Mr. Pachter said. “It will take a while for people to trust the cloud and adapt.”

    Nintendo has already announced plans for a new machine, the Wii U, expected to be released next year. But Sony and Microsoft don’t appear to be in any rush to introduce new consoles. It has been five and six years, respectively, since the companies introduced the PlayStation 3 and Xbox 360, and neither company is talking about plans for a new system. Console makers used to introduce new game systems every five to six years. “We’ve got a lot of life left in the current generation of PlayStation with PS3,” said Patrick Seybold, a spokesman for Sony’s United States games division.

    Some cloud gaming proponents say they believe future consoles are likely to embrace the technology, rather than risk being replaced by it. “Anyone making consoles for the future would be crazy not to have cloud gaming support,” said David Perry, Gaikai’s C.E.O.

    Support from game publishers can make or break OnLive and it isn’t clear how eager some of the more prominent ones are to join the service, which has a variety of payment plans for consumers, from a $10 monthly rental to an option for buying games for $2 to $50. The industry’s biggest blockbuster, the Call of Duty series from Activision Blizzard, isn’t available on the service, for example.

    An executive of one publisher working with OnLive, Jason Kingsley, the chief executive of Rebellion, predicted that most game makers would warm to cloud gaming services over time.

    “There will always be some people who say, ‘We don’t want to engage in this, it’s horrible,’ ” Mr. Kingsley said. “I can’t see why it shouldn’t be part of the mix
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