Acclamator

OK, these are my observations from both the official website of OnLive (www.onlive.com) and from this press conference.

OnLive has multiple features that make them a very attractive option for some gamers. The lack of load times and the fast access to content are very attractive to the modern gaming market. The friend s list features, such as drop-in/drop-out multiplayer, the ability to watch your friends in-game, and the option to record your accomplishments and publish them are great way to help promote gameplay. They also have the option of providing advanced consumer purchasing options, such as free demos and rental options. However, after today s presentation by Steve Perlman on OnLive s features, significant problems may hamper the success of the platform. A user is forced to pay a service fee in order to access the servers. However, this fee only gives users access to their friend s list, free demos, and the ability to watch other people play games. Users must still rent or purchase games in addition to the fee. If the user does not pay the fee, then all of the content the user has purchased becomes unavailable. This is a fundamental problem for the consumer because they never truly own the products they purchase; they instead pay a licensing fee. The users are also subject to their own internet connection in order to play. While it is safe to assume most Americans who would be gaming consumers have an internet connection, there is no guarantee their connection is fast enough to properly enjoy the games. OnLive faces a dilemma, since their continuous costs force them to charge consumers for each minute of play. From a cash flow perspective they are forced to charge the subscription fee to continue operating. While the claim is the user can use OnLive and avoid paying for expensive consoles and computer rigs, their service by itself just doesn t justify paying the fee. OnLive will need to upgrade the value their service offers consumers if they expect to obtain a large consumer base. As far as pricing goes, because OnLive in theory will dramatically improve publisher/developer profits by cutting out expenses, they have a unique opportunity to sell games under full retail and still make healthy profits for themselves and the game publishers/ developers. However, no announcements have been made that suggest this. Steam has proven that gamers are extremely price sensitive, due to the financial success of the multiple sales and deals they offer. I personally find it very hard to believe that your average gamer will be willing to pay almost $200 a year along with the full retail price of each individual game in order to take advantage of the services OnLive currently is slated to provide.