In a recent Fast Company article titled Game On, Kevin Maney says “Good-bye” to gaming consoles.
OnLive is a new service founded by Steve Perlman that uses cloud computing to offer anywhere, anytime gaming. After seven years of development, OnLive promises to deliver the computationally complex game titles to any computer that has a broadband connection.
In Innovation and Marketing in the Videogame Industry, we discuss OnLive as a potentially disruptive technology that shows significant promise. However, we do not share Fast Company’s belief that it could spell the end of gaming consoles anytime soon. Maney writes,
“The used-game economy could shrivel, hurting companies such as GameStop. OnLive foretells a doomsday scenario for game consoles; Xbox and PS3 have services that allow users to download games to the console, but OnLive makes consoles obsolete.”
Similar doomsday scenarios were declared for books when radio became popular, then for radio when television became mainstream. In 1999, Blockbuster’s online service was supposed to revolutionize the distribution of movies. Ten years later, Netflix and Bit-torrent are finally realizing that transformation. Yet even today, DVD sales reached $5.4 billion for the first half of the year. Although that’s down from previous years, the format is far from dead.
Online gaming enjoys broad support with tens of millions of subscribers to Xbox Live and PlayStation Network. Despite the ubiquity of broadband, consoles offer features that OnLive can’t, such as the ability to default to offline gaming should network connections become unstable. In addition, new technologies like Project Natal will be difficult to replicate on remote servers.
We agree that cloud gaming could represent the future of video games. However, like online movie streaming, it could take years to realize its full potential. Even then, consoles will likely continue to play an important role, even if only as a front end for streaming content.
Innovation and Marketing in the Video Game Industry: Avoiding the Performance Trap examines the reasons why many good ideas fail to achieve widespread market acceptance.
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