OnLive CEO: “We Want to Be the Netflix of Gaming”

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Now, do the publishers have dynamic control of the pricing?

Absolutely, sure. They can change the price in the morning and in the afternoon, if they feel like it. Better than that, they can offer all sorts of bonuses and programs and bundles, et cetera. So we’ve had every imaginable kind of sale, and bundling, and add on, and so forth.

So the people who’ve been on OnLive over the last six months, they’ve had the pleasure of watching all these experiments being done by the publishers. They’re trying all these different pricing packages. You talk to some of the people there; they’ve gotten unbelievable bargains on games.

One of the things that strikes me with the OnLive experience is that you guys are still carrying a huge amount of risk. There were times when I couldn’t connect to the service. And, then, you are just kind of left staring at the box, saying “Now what?” What kind of remedies can you provide to the end user or how can you support them if they are having connectivity issues?

So, a couple of things. We look at the stats across all of the different users. OK? And so we have a nationwide measure. And we’re in the 99 percentile in terms of reliability. So, it is the case there are going to be some people that have reliability issues.

But, if you go surf the Web or just look at some of the OnLive fan sites and things like that, it’s not something that people report on very often. So, what we would do in a situation like yours, is people would call customer service, and we’d talk with you about it. Sometimes, for example, it’s as simple as resetting your cable modem or your DSL modem. I would say, that more than 75% of the time, that fixes it. Sometimes if there is an ISP that’s having problems, we basically, we go, you might say, you hook up your laptop to it and you go and check. Sometimes the service is down. You wouldn’t be able to connect to Steam. You wouldn’t be able to connect to Xbox Live either.

Right. Every other Internet-enabled device would be screwed as well.

That’s right. So what we usually do is say, “Is it just us?” And then if it is, then we go and we resolve it. So, I think it’s true for us, for Apple TV, if you have a Roku box. That’s just the reality of it. In the rare case when we have somebody who really just has a provider that’s just not holding it up. And frankly, we have all those logs. And we don’t want to publish them to get in trouble…

Yeah. You don’t want to alienate your partners on that end. The reason I asked the question is because your audience is gamers with other game machines. Who, even if Xbox Live is down, they can still play a game off line, and get the core experience that they came for. Whereas for you guys, network reliability is a huge vulnerability for you. And if I understand what your saying correctly, you are at the mercy of forces other than just your own infrastructure.

For under one percent of our connections, the answer to that is yes. Here’s the thing about Xbox, PS3, Wii, and Steam. That statement you made before that you can play offline was a very accurate statement three years ago. I think today, when you get a disc, typically, when you put it in, what is the first thing it does? It says it needs to do some sort of an update, right?


And Steam, won’t even let you play the games unless it can make a connection. It uses that for DRM, and because they’re trying to combat piracy, all these systems need to connect.

So, I think that the days when you can have a completely disconnected experience for a high performance game–I mean, there’s always going to be little indie ones that sure will run perfectly fine locally.

But as far as the AAA games that we are providing and the high-value games on Xbox, PS3 and Wii, pretty much those are connected experiences. And those connected experience are only going to grow. They are trying to do something with EA Games with their Online Pass system. You can’t play them unless you’re online. So, we’re not the only ones.

Nevertheless, going forward, publishers see that we’re the fourth platform, and they are actually designing games with us in mind from the get-go. So instead of us getting a version of the game that is, “OK, here’s the PC version, make it work for OnLive, now we’re getting versions of the game that are the OnLive version.” The path is a lot quicker. In fact, next year, you’ll see some games on OnLive that are only being released on our MicroConsole that are not being released on PC at all.

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