Assuming that OnLive's service is top notch, with no lag, no latency, and everything works from day one, let's take a look the four biggest problems it will face:
1.) Microsoft will not support it. This is the main obstacle behind OnLive's success because the lion's share of applications run on Windows. Why won't they support OnLive? There are a whole bunch of reasons, chief among them:
A.) It's simply direct competition to the Xbox brand and Xbox Live. Self explanatory. The premise of OnLive can potentially destroy all the work that Microsoft has striven to achieve in the console market if it's successful. That's years and years of red ink down the drain. Aside from that, Xbox Live already has millions of paying customers, who realistically aren't about to just pack up and leave.
B.) Windows software will decline. What happens when everyone can simply play the best games without needing to upgrade their computers? Simple. They won't need to buy any of the new upgrades to Windows. My fifteen year old piece of junk running Windows 95 is perfectly capable of playing Crysis. Why do I need to buy Windows XP, Vista, or 7?
2.) Computer hardware companies will not support it. Obviously, if no one needs to upgrade their computers to play high end games anymore, there will be no need to produce high end graphics cards or quad core processors. Intel, AMD, NVidia, ATI, etc. will have their profit volumes cut horrendously. They will all be limited to producing their high end stuff only for server farms.
3.) Retailers will not support it. If everything is online, Gamestop, Best Buy, Amazon, Walmart, etc. will see a sharp decline in sales. They can get no benefit from OnLive whatsoever in exchange.
4.) Nintendo will not support it. With the success of the Wii, Nintendo has no reason to just destroy their console market by offering their games online without having to purchase the machine that has captivated nearly 50 million people. This is a big factor simply because Nintendo is currently the most successful game producer in the world. Aside from that obvious reason, Nintendo has always been and will always be a first party company, whose franchises are far too huge just to give exclusivity away.
So the world's largest software company and the world's most successful game company aren't going to support the service, along with pretty much every single computer hardware manufacturer and every single retailer.
Aside from the lack of support from industry giants, if millions of people go online to play at the same time (assuming it's a big success, best case scenario), it will still be a failure in many ways, including:
1.) Millions of people playing online at the same time, with hundreds of games to choose from, some requiring pin point accuracy with 0 lag tolerance (like fighting games), even with the best servers, there's no way a California based server can possibly deal with a gamer from England without latency issues. Even with hundreds of servers scattered everywhere, the service will eventually crack under pressure because it relies completely on the internet.
2.) If my PS3 breaks on me, I'm the only person who has to suffer not being able to play, but I can still do so by using a friend's machine. If the OnLive service goes down, every single subscriber is basically in the dark, and there's no solution that the gamer can do on his own except to wait. There's far too much risk, especially since it's relying on nothing but internet connections.
3.) The internet is far from stable enough to support games that require 0 lag/latency tolerance. Almost everyone on this planet suffers from internet instability at certain points, and if the service provider is experiencing lag, everyone will as well, making the service unplayable.
4.) Bandwidth and internet speeds just aren't high enough for the vast majority of consumers. Think about it. The 360 has 29 million console sales, but just half of those are Live subscribers. There are a number of reasons why this is the case, chief among them:
A.) Not everyone has an internet connection.
B.) Not everyone has a fast enough internet connection.
C.) Not everyone is interested in using the internet to play games.
5.) The quality of gameplay is simply not as good as on their main platforms. The GDC trial, with a controlled sample size that poses next to no danger to latency, still couldn't produce Burnout Paradise on par with the console version. What more when millions of people are playing it at the same time?
6.) There is no physical evidence anywhere that you actually owned the game at any point in time. If you stop paying, you essentially lose your right to play. As opposed to owning the disc or having the game in your hard drive, you can play long after you purchase the thing. Ever wanted to play StarCraft again after 10 years of leaving it in the drawer? With OnLive, once you give up a certain game, you'll have to re-subscribe just to get your fix.
So basically, there's no logical possibility that OnLive can be a big success. Sure it'll attract a good amount of gamers. But in the end, it'll be just like the Dreamcast. A lot of potential, but very little support.
(Written by me)
