'Console killer' OnLive to launch in June

By Maggie Shiels Technology reporter, BBC News, San Francisco

Around 13 big game publishers have signed up to the service

A gaming service that aims to kill off the traditional gaming console will begin streaming popular games over the internet in June this year.

OnLive, which launched to much fanfare in 2009, announced details of its service at the GamesBeat conference.

Instead of games taking hours to download or buying them off the shelf, OnLive promises games on-demand.

"OnLive breaks the console cycle. We don't need new hardware devices," said company founder Steve Perlman.

That sentiment was echoed by his chief operating officer Mike McGarvey.

"We want to take your dollars from hardware and let you spend it on software. We are a new platform and we're building a network and infrastructure to last for the next 30 years of gaming, not the next five years," Mr McGarvey told reporters.

'Disruptive'

OnLive has been in development for eight years and will officially become available on June 17.

The company said it will deliver on-demand video games via the cloud to the PC, Mac or TV and that it could provide high quality gaming on low-end machines.

OnLive says they are offering a new way to play games

OnLive relies on video compression technology, which instantly streams video via the internet so if feels like the game is playing locally.

The reality is that all the heavy lifting is done by remote data centres that can be no more than a thousand miles away.

Players use a PC or TV hooked up to a broadband connection to connect to the system.

"It could be very disruptive to the console vendors," Billy Pidgeon, an independent game analyst told Bloomberg News.

"This also wouldn't be good for retailers or anybody selling physical software formats."

Research group NPD reported that last year, US video-game sales fell 8% to $19.6bn (£13bn).

Instant gratification

OnLive said that it was reacting to a change in gamers' habits, as they increasingly migrate online.

Popular titles like Mass Effect 2 will be available through the service

"There is this huge shift from download and use later to use it right now. The bytes coming in are not being stored. They are being consumed the moment they arrive," said Mr Perlman.

Dean Takahashi of website GamesBeat believes instant success is not guaranteed.

"It is going to be small at first. At the beginning it becomes one more great channel for the game companies to pursue. But at some point, yeah there is going to be a transition," he said.

OnLive will be available for a monthly rental fee of $14.95 (£9.99) for subscribers to then buy or rent games over the internet.

It will have titles such as Assassin's Creed, Prince of Persia and Borderlands.

No date was given for when OnLive will be available in the UK, Europe and the rest of the world.