Home » Issues » Currently Reading:

OnLive: The Online Gaming Revolution May Be Tempered By Bandwidth Caps

Phillip Dampier June 4, 2009 Issues 18 Comments
OnLive's Microconsole

OnLive's Microconsole - About the size of a deck of playing cards

Back in March, an upstart company born from a high tech business incubator in Palo Alto announced it was nearly ready to challenge the conventional business model of the video game industry.  For years, game players invested in game consoles, complex pieces of hardware that rival many desktop computers, to play games distributed and sold as physical media.  Every few years, the multi-hundred dollar console would become essentially obsolete, and consumers would then have to spend hundreds more for the latest and greatest.  Switching allegiance to another brand meant repurchasing game titles to work on the new console.

OnLive turns the traditional console model on its head.  By leveraging high speed broadband connections, the company claims it can move game play to a “cloud” model, where only an inexpensive micro-console is required to connect your broadband connection, game play controllers and accessories, and television together.  All of the raw processing power is done by OnLive’s servers.  As long as you have a robust broadband connection (at least 5Mbps preferred), game play is claimed to be fast and in “high definition quality.”  The company also claims to have licensed access to virtually all of the latest games, available the same day they become available in stores.

Customers are promised an end to console upgrades and costly investment in purchasing individual game titles.  OnLive’s business model provides the service for a monthly subscription fee, yet undetermined.  Play what you want, when you want.

But there is a fly in the ointment.  Moving to a cloud computing model, dependent on high speed broadband, changes the dynamics of how online gaming works.  Console models use comparatively small amounts of bandwidth.  Physical media provides the foundation for the game, and compressed “control data” moves back and forth to indicate player positioning and action.  OnLive does virtually everything from its servers, and sends it all down your online connection.  That means more bandwidth, more data moving back and forth, and under a broadband Cap ‘n Tier scheme, the possibility of more of your money moving out of your wallet.

OnLive claims it has sat down with most of the nation’s broadband providers to establish “good relations” with them.  OnLive’s usage model is designed to be “cable modem friendly,” relying much more on downloads and not a whole lot on uploads, putting reduced pressure on the cable modem pipeline.  The company was asked what kinds of deals they may have cut with cable providers, and company officials were vague.  Theoretically, OnLive could partner with bandwidth providers and given favorable priority for game play traffic between customers and OnLive’s servers.  But nothing like that appeared to be on the horizon at the GDC 2009 press conference (full video press conference), which highlighted the company’s product.

A follow-up question drilled down into the broadband capping issue OnLive may need to contemplate further:

[flv width=”608″ height=”336″]http://www.phillipdampier.com/video/OnLive Bandwidth Caps.flv[/flv]

While Comcast’s 250GB monthly usage cap may not pose a tremendous problem for OnLive for now, Time Warner Cable’s former experiment in Beaumont maxed out at 40GB per month, with $1/GB overlimit fees thereafter.  OnLive officials believe bandwidth caps impacting their business model “haven’t come up so far,” and they believe that if they have “good relations” with cable providers, some way will be found to deal with the matter.

Whether that proves to be true will be worth watching.  In the meantime, OnLive might do better standing with customers instead of providers and objecting to the usage cap limbo dance craze.  Because if a 40GB usage allowance is “a lot” for one company, so was the 5GB allowance some other companies claimed to be perfectly reasonable.  For OnLive, they certainly are not and there is nowhere to go in this dance except down.  Companies that rely on broadband to make their business models work will find customers second-guessing whether its worth it to buy a service, and get billed effectively twice for using it.

[Thanks to Stop the Cap! reader “Smith” for calling our attention to the story.]

0 0 votes
Article Rating
18 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Onlive Fans . com
12 years ago

Great Article. I hope that we can prevent the caps from going in place. It will really hurt Onlive.

jr
jr
12 years ago

The cable companies are economic terrorists who want to destroy our economy to enrich themselves. Every sector will be damaged by their greed. Time Warnervilles will be the new Hoovervilles

Smith6612
Smith6612
12 years ago

Thanks for responding to my suggestion for this article Phil! Well done! Might I also mention, since this site is about capping and since OnLive is about fast internet connections and heavy internet usage, may I mention that I believe sometime this summer OnLive is running an open public beta (if it hasn’t started already yet). If anyone who reads this site knows how to set up/build a router to measure the bandwidth consumption of OnLive and manages to obtain an invite for the beta, it’d be interesting to see how much a gamer would pull down. I’m going to… Read more »

Michael Chaney
12 years ago

So back to TWC’s new TOS agreement…

“I acknowledge that HSD Service does not include other services managed by TWC and delivered over TWC’s shared infrastructure, including Video Service and Digital Phone Service.”

I guess this could very well become one of the “other services managed by TWC”

Tim
Tim
12 years ago

Watched that video and just going by what the guy said: average gamer 60 hours a month and 2Mb/s download speed. Doing the math: 2000 Kilobits/second / 8 bits/ 1 byte = 250 Kilobytes/second 250 Kilobytes/ second * 60 seconds = 15,000 Kilobytes/minute 15,000 Kilobytes/minute * 60 minutes = 900,000 Kilobytes/ hour 900,000 Kilobytes/ hour * 60 hours = 54,000,000 Kilobytes/ month 54,000,000 Kilobytes/ month / 1000 Kilobytes/ 1 Megabyte = 54, 000 Megabytes/month 54,000 Megabytes/month / 1000 Megabytes/ 1Gigabyte = 54 Gigabytes / month Well, I guess those caps Time Warner wanted were just blown away just by the… Read more »

Michael Chaney
12 years ago
Reply to  Tim

the most likely scenario: “Oh don’t worry. Due to the new collaborative effort between OnLive and TWC, we’ve teamed up to provide you a blazing fast channel that guarantees on-time delivery so that you have no dropped frames or hiccups in game play. Better still, this new channel doesn’t count toward your monthly usage!” And the fine print of your OnLive account might state that a portion of your monthly dues will subsidize this new “channel”, or they just might not tell you at all. “But what about GameCompanyX’s new online game play service? Can I use this with this… Read more »

Smith6612
Smith6612
12 years ago
Reply to  Tim

Worst part is, if you recall some of their affiliates who have been helping OnLive with their goals (believe they mentioned them towards the end of the video), wasn’t one of the companies that helped them out owned by Time Warner Corp (not cable) or am I remembering things wrong?

Tim
Tim
12 years ago

That 2Mb/second for HD is low balling it I think. If the user was averaging around 4Mb/second, then that essentially doubles the amount of data to 108GB/month. Either way, caps are not good for technologies emerging such as this and what really baffles me is that these businesses don’t advocate openly against it when it is in their best interest to do so.

John
John
12 years ago

I’m waiting for this to have a negative impact on Xbox Live. A lot of demos are currently 1-1.5 gigs. Some classic Xbox 1 games available on Live are much, much larger than that.

Smith6612
Smith6612
12 years ago
Reply to  John

It’s going to have a negative impact on Valve’s STEAM as well. I’m a Steam user, and some of my games (Crysis, Crysis Warhead, Call of Duty 4:Modern Warfare, Call of Duty 5: World at War) are in the 6-8GB range just to download the game. My entire collections of games on Steam would blow me past 100GB once everything is installed and set up should I have to re-download my entire Steam folder + addons.

Larry
Larry
12 years ago

There are other companies that sell games online to that it will hurt, Steam, direct2drive, even gamestop has games that can be downloaded and most of the new games are anywhere from 4 to 10gb. Then there are the companies that sell apps online, what about Microsoft’s TechNet, you pay for the subscription which isn’t cheap, and they can download software, beta OS’s and all that stuff.

Maybe we should contact these companies and try getting them involved because if these caps come into play, it will hurt their business.

Tim
Tim
12 years ago
Reply to  Larry

“Maybe we should contact these companies and try getting them involved because if these caps come into play, it will hurt their business.”

Excellent idea Larry! I think we need to get these companies involved as the next step in stopping these caps from ever seeing the light of day.

Jay Ovittore
Editor
12 years ago
Reply to  Tim

I am making slow headway with the gaming companies. Here in NC there are about 40 major game developers stationed here. The ultimate goal I have in mind is to get them on board fighting this issue here in NC, as well as on the national arena.

Paul R
Paul R
12 years ago
Reply to  Tim

I’ve actually cotacted Valve already and their answer was ‘we are monitoring the situation closely.

actual reply:
—————————
Hello Paul,

Thank you for contacting Steam Support.

We are aware of the possible changes in policy by US ISPs and will do what we can to prevent such changes from negatively impacting Steam users.

Larrry
Larrry
12 years ago
Reply to  Paul R

What i can see happening is that they’ll go to Time Warner, Comcast, ect and they’ll tell these companies that we’ll exclude your services from counting towards the bandwith usage for a fee. If they agree, I can see that fee being passed on to the customer as usual.

Smith6612
Smith6612
12 years ago
Reply to  Paul R

Thumbs up to Valve doing what is best for everyone as always! 🙂 Looks like we have a large gaming company on-board.

artsal
artsal
12 years ago
Reply to  Larry

I talked to Stardock, they seemed to be of the opinion that the cable companies won’t win, so they don’t need to do anything.

They do acknowledge it would hurt their business if they did.

Maliyah Merritt
12 years ago

my mother would have liked this

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!