If it sounds too good to be true?

A new company called “OnLive” has announced a service which will let you run high-end, 720p PC games at 60 FPS on any computer with a decent internet connection and web browser.  You could also buy a (theoretically) cheap “Micro-console” device from the company that would hook into your TV via HDMI that would also enable you to play all of these games in HD at 60FPS.

Assuming that the price for this service is reasonable, such a service would likely radically alter the gaming industry in a very short period of time.  High-end gaming PCs would be an absurd investment if even your $100 netbook could play the same games at ridiculously good graphical settings.  Powerful and pricey new consoles would look noisy and hot compared to a cheap, sleek, and quiet PSP-sized device that could play better looking games anyway.  Not only that, your device would never need to be upgraded to support the newest generation of games… your games would just keep looking better and better over time whether you’re using an old computer or an old “micro-console”.  All you’re responsible for paying for once you have a computer/microconsole is your internet connection and the subscription fee (and, of course, for the games, which would also be “rentable” since the problem of piracy goes out the window).

The way it works is quite novel (and actually somewhat predicted to a lesser extent in some of my columns and posts).  Essentially, a very powerful cloud/cluster [is there a difference?] of computers will accept your input, render your videogame scene, compress the video generated from that scene, and then send it back to your computer/microconsole where essentially the video of the powerful machines playing your game is then displayed on your monitor/TV.  This alone makes me very skeptical of the service, as I have a hard time believing that a latency time acceptable for responsive gaming is possible through the internet.  The fact that this service could very well upend the way the entire gaming industry works (at least as far as hardware is concerned) makes me even more skeptical, as it is very rare when a technology as disruptive as this one comes into existence.  The success of the Wii doesn’t even come close to what the implications are of “OnLive” if their promises actually play out (again, at a consumer-friendly price).

Still, IGN has supposedly already demoed the service with some games on a Macbook Air (which doesn’t even technically support the games), and have deemed the games “completely playable”.  They mention that Burnout Paradise maybe doesn’t feel quite as “smooth” as it does on a PS3, but that it was still plenty responsive.  Even if it’s not “quite” as responsive as it would be on your own high-end PC, I’m guessing that, for most people, diminishing returns would kick in pretty quickly when you’re talking about playing a next-generation game at maximum settings on your last generation machine.  It will be interesting to see if the service works quite as well if/when it’s released into the wild rather than in a theoretically more controlled demo environment at GDC, which, for all I know, could be sitting directly on top of an internet backbone or using a gigabit ethernet network for their demo.  If it does, consider me extremely interested if the price is right.