US, March 23, 2009 - Before I dive into what OnLive is and how it works, let me start by saying that you should read every word of this article as this service has the potential to completely change the way games are played. If it works and gets proper support from both publishers and gamers, you may never need a high-end PC to play the latest games, or perhaps even ever buy a console again. That is not an exaggeration.

Just announced at this year's GDC, OnLive is an on-demand gaming service. It's essentially the gaming version of cloud computing - everything is computed, rendered and housed online. In its simplest description, your controller inputs are uploaded, a high-end server takes your inputs and plays the game, and then a video stream of the output is sent back to your computer. Think of it as something like Youtube or Hulu for games.

The service works with pretty much any Windows or Mac machine as a small browser plug-in. Optionally, you will also be able to purchase a small device, called the OnLive MicroConsole, that you can hook directly into your TV via HDMI, though if your computer supports video output to your TV, you can just do it that way instead. Of course, you can also just play on your computer's display if you don't want to pipe it out to your living room set.

When you load up the service and choose a game to play (I'll come back to the service's out-of-games features in a bit), it starts immediately. The game is housed and played on one of OnLive's servers, so there's never anything to download. Using an appropriate input device, be it a controller or mouse and keyboard, you'll then play the game as you would if it were installed on your local machine. Your inputs are read by the plugin (or the standalone device if you choose to go that route) and uploaded to the server. The server then plays the game just like it would if you were sitting at the machine, except that instead of outputting the video to a display, it gets compressed and streamed to your computer where you can see the action. Rinse and repeat 60 times per second.