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Will OnLive survive with its current business model?

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OnLive is a cloud based gaming experience where you never actually own any physical media nor do you actually download any games, rather the entire experience is streamed to you directly from the massive data centres being setup across America.

But now one of their European rivals, TransGaming, has come out and questioned not only the ability to stream AAA titles but also the fundamental principles that OnLive has based their income on.

TransGaming CEO, Vikas Gupta, has told GamesIndustry that while they have looked at OnLive’s business model they can’t see that it can be sustainable as the profit’s they’ll make from the distribution agreements with EA and friends are never going to be enough to cover the startup capital required to get OnLive running. Not to mention the huge costs associated with keep such a large network up and running and instantly available.

The last part being the second major problem he see’s with the OnLive business model and one that I fully agree with. Basically any network, no matter how fantastic, is going to have latency and not be entirely stable. The pings will range from 15-50 quite easily and while games cater for this in normal play they don’t cater for this if you are trying to stream the entire title at the same time.

So Vikas and I believe you are going to experience some pretty heavy jitters at times and that’s when the hardcore gamers are going to turn off the OnLive service and head back to console or PC.

Granted the service is excellent for less intensive titles but when it fails on the most popular games of this generation you have to worry about it’s ability to keep going.

Not that any of this means anything to us in SA as we won’t be getting onto the OnLive bandwagon anytime soon as you need a data centre in close proximity for it to ever work.

Source: CVG

Last Updated: July 5, 2011

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