Steve Perlman's Next Act: Video Game Technology That Cuts Out The Console
Steve Perlman, one of the original developers at Apple (NSDQ: AAPL) and founder of WebTV Networks, which was sold to Microsoft (NSDQ: MSFT) in the 90s, is trying to shake up the video-game business. Perlman’s incubator Rearden LLC has developed technology that enables video game players to play anywhere without a console by accessing games through an internet-connected server, something not currently available to gamers.
The technology works a lot like many video-content delivery networks: It compresses then de-compresses large amounts of data quickly, which is necessary to play graphics-rich games that require fast two-way action. This is not Perlman’s first foray into the gaming industry — he founded Catapult Entertainment in the ’90s, which developed modems for Sega and Nintendo.
The technology had been in development for seven years, according to the Wall Street Journal, and is scheduled to be debuted by a company called OnLive Inc. later this year. OnLive says it will offer new games from Electronic Arts Inc. (NSDQ: ERTS), Take-Two Interactive Software (NSDQ: TTWO) Inc. and THQ Inc.. (NSDQ: THQI) For gamers who want to play games on their TVs while at home, the service has created a chip called the OnLive MicroConsole, which converts the internet feed to playback on a TV.
While the technology hasn’t officially been used by any service yet, it potentially has significant implications for pretty much every aspect of the gaming industry. Companies like *Sony* and Microsoft could face a serious challenge to sales of their popular PlayStation and Xbox consoles as they theoretically wouldn’t be necessary anymore. Meanwhile, if the technology delivers on its promise, publishers could cut costs fairly dramatically by not having to package and ship games.
Is this like gaming using WebEx or NetMeeting or Remote Desktop? Sounds like complete vaporware…
It would only be viable for casual or single player games. The power of the console is the ease of multiplayer and the social networking aspect of friends lists & achievements. Besides, MS would never license Halo to them. Their strategy is more likely to develop something to sell to MS to keep it off the streets. Publishers could already skip retail packaging now if consoles had bigger hard drives.
It is true that many video game companies have the option of selling their games directly on the console, cutting the costs of packaging. A bigger issue though would be what platform(s) would this service support, (i.e., programming languages and API's). Currently, a video game publisher has to decide which propietary platforms they will target. If this technology is going to make consoles obsolete, then they must be offering the option of some other game engine. It would have to be open source and robust enough to handle not just current gaming functionality but functionality that has yet to be invented or implemented. Java? Not sure about that. And retraining current programmer's would also be an issue. Sounds interesting but there are a few major hurdles.
I guess one would call this, GaaS, Gaming as a Service. I'm sure the subscription model has at least some of the major publisher's drooling.