The major video game publishers have switched development of next-generation games from consoles to the OnLive platform of internet-based gaming, according to the service’s founder.
Steve Perlman, (pictured) OnLive chief executive, said his service was also gaining considerable attention from investors, as he announced a major funding round led by AT&T Media Holdings.
OnLive caused a major stir at the Game Developers Conference in San Francisco in March, when it broke from seven years in “stealth mode” to reveal a service that could allow users to play fully-featured console titles over an internet connection, with no noticeable lag in performance.
OnLive games can be played on low-end laptops and PCs or by using a set-top box the size of a pack of cards linked to a TV
This “cloud gaming” technology, with games served from data centres, is potentially disruptive – empowering publishers, but undermining the business models of console makers, video game retailers and providers of high-end graphics chips and microprocessors.
In the past six months, OnLive has been testing its service in the US, while talking to investors about further funding to help launch the service this winter.
The third-round VC funding comes from AT&T Media Holdings, Lauder Partners, Warner Bros, Autodesk and Maverick Capital. The latter three took part in previous rounds.
No figure is being released, but OnLive says this is its largest closing.
“We were oversubscribed and we both had to turn away some investors and expand the round,” Mr Perlman told me, adding that hundreds of thousands of people had also applied to take part in beta testing for the service.
The Series C round would allow the service to “scale” much more than it planned originally, right across the US mainland, he said. He would not comment on whether AT&T’s involvement in the funding round would mean its network could be used by the service.
“We are really an infrastructure company,” he added. “We make it possible for people like Electronic Arts and THQ to distribute their games.”
The top developers of the major publishers – nine have announced their support for OnLive – were now dedicating themselves to designing games that took advantage of its capabilities, he said.
“There is no new game platform coming out [from the console makers]. We’ve spoken to the CEOs of the major publishers and they have no prototypes they’re working on.
“So the thing that blows my mind, which was an unexpected outcome, is that we have major game publishers now designing next-generation games that will only run on Onlive, and the reason is that they have these advanced teams, and what else can they design to?”
He said one example was a multiplayer game where a military commander could see a matrix of video screens representing what could be seen through the eyes of all the other soldier-players taking part.
Analysts says OnLive has yet to prove it can scale and it faces competition from companies such as Canada’s Transgaming and Playcast Media of Israel. But OnLive’s technology has impressed in demonstrations. It has more than 100 patents and patents pending and said the funding would also be used to “to protect OnLive’s extensive intellectual property rights.”
