Why OnLive won't work (even if it does work).

So even if the OnLive system "works", the client sends controller input to the server which in turn sends the video output back to the client, I don't think it's going to take off. The promise of never upgrading my computer's video card is not that much of an incentive, and here is why.

First, the system is subscription based, and they haven't released pricing which means I'll have to make some assumptions. These assumptions could be dead wrong but I think they're all reasonable.

Let's say the service is comparable to Xbox live for 8 bucks a month. (8 per month). I'm basing this on the reviews which mention a subscription charge, but do not mention a set price (source Shacknews)

Now you have to buy or rent a game. These aren't included in the service they cost additional monies. Again they have been nebulous about pricing, but I'll wager that it's going to be a little cheaper on their server than retail so let's say it's 30 bucks for a game that would usually cost 50.
($30 + 8 per month.)

You're also having to pay for Internet. Right now there's a huge uproar about TimeWarner's Cable Internet pricing. Hulu and other streaming services are threatening the traditional cable TV model, and the Cable companies are responding by threatening higher internet prices. Onlive doesn't really say anything about how many Kbps or Mbps their streaming service will need to function properly, but there is a relationship between how long you spend gaming OnLive and how many Gigabytes per month will be steamed. I'm going to go on the higher end of things and add a 40 GB per month data package for 54.90 per month (source : Gamers with Jobs)

($30 per game + 8 per month + 54.90 per month)

They haven't said how much the "inexpensive" microconsole will be, but I'll wager it's around 30-50 dollars, or included with the service agreement (like a cable modem). Let's just say 30 for now.

($30 per game + $30 for microconsole + $8 per month + $54.90 per month)

So already, on month one, I've spent a about $120 bucks on getting everything up and running, and I'll have an additional 63 dollars per month in connection charges. If I do happen to go over 40 GB in a month, that's an extra $2 per gig. So over the a year the price could be (63 x 12 =) $756. Granted, I'm already spending a bunch on Internet anyway, but I don't use anywhere near the amount of bandwidth that this service requires.

AND! If I ever decide to cancel the OnLive Service my console gets bricked and I probably lose access to my games. What is the microconsole worth to me if it doesn't connect to the cloud? It's like the iPhone, as long as you're paying the subscription fee it's awesome, the second you stop, it's a paperweight. And what about all the Games? Much like the iPhone, I doubt there will be any way to use these applications on anything but the OnLive service. To be fair, they haven't said anything about letting people download physical copies of the game... but again, how the heck is Joe User supposed to play Crysis on a netbook or macbook?

Compare this to the PC I bought from Dell this year. 3 Ghz DuoCore, 3 GB Ram, and a big hard drive for 300 dollars, which I upgraded with a 99 dollar GT9800 video card (400 dollars total). Every game I buy on it will run on it, even if I lose my job, or internet connection, just like my Xbox or DS or Wii.

Here's the other thing.... in 12 months, I could pay another 100 bucks to upgrade the video card on the PC and play newer games. So if the cost of this service is to avoid upgrading your PC every year, I don't think it's a valid argument at all.

5 things that they would have to explain before I jumped on board would be.

1) Do I own a license to play the game on OnLive, or a license to play it on any PC? Can I download a backup to a CD or DVD?

2) How many Kbps/Mbps will the streaming video require. How much data throughput can I expect per month, or at least per hour of play.

3) Why am I paying more per month to get less ownership of the media I purchase? What good is it to have a cheaper console if it increases my data costs?

4) How is this service, which is Broadband based, going to entice people who don't plug their consoles into the Internet, or don't have the ability to do so.

5) Wouldn't the data have to move at the speed of light, almost instantaneously for the service to behave like the Xbox? How many milliseconds of latency are in between my xbox controller and video output because the best case scenario for a ping on the internet is 30-100 ms.

There is a definite benefit to this service, and it would be very impressive to have video games behave like on demand television. However, I think at this point, the costs outweigh the benefits in a huge way. That has not stopped me from signing up for the beta, as I'm very interested in how this plays in the real world with variable connetion speeds, and not just on the GDC controlled environment.

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Jonpaul is a blogger and podcaster at the media critic site NerdAlertNerdAlert.com . He still has NES Carts from the 80s that work fine without a monthly fee.