[...] GDC so far, and while I may not be attending this year, everyone else on the Internet seems to be talking about it so far, so I feel like I should [...]

Let’s say that the microconsole and gamepad costs 200USD to manufacture and the montly subscription fee of the service is 10USD; it takes 20 months for even pay back the hardware at home and how about the hardware in the datacenter..

I have not heard any facts on how many servers they need to run this service for, let’s say 10k simultaneous users. Just for comparison you need only one VOD server for 10000 concurrent streams.
Or where this super data center is located that can serve all users i.e.who can actually access the service with decent latency.

- 1.5 megabit = 675 megabytes per hour of play. This is slightly cheaper than my 1 gig/hour estimate. 720p is 4 megabits = 1.8 gigbytes per hour.

- This is no $10M startup. A LOT of money has been spent on this.

- They seem to have done a good job doing what they set out to.

- But until bandwidth becomes cheap enough to stream 120 hours of video per month, I don’t see how this will work.

I hope I’m wrong. Something like Second Life would be a LOT smoother if it was predigested by a high-octane rendering machine and fed out as video. Any environment that is subject to frequent and unpredictable changes in topography could benefit, which might be a boon for user-created content.

Netbooks are separate issue. I think games should be designed for them. I think game developers will feel the same as the number of netbooks increase.

Rising hardware costs??? Hardware costs are falling all the time. It’s the latest games that are designed for the latest graphics cards that require you to buy new hardware.

The games that OnLive is talking about (to be flippant) require so little CPU that they could run on an iPhone. I suspect they’re spending more CPU compressing at 30 FPS than the games take generating the 30 FPS in the first place. Plus, they are using HUGE amounts of bandwidth, which still costs money.

On a sever, every gigabyte is around $0.10. From the customer’s POV, every gigabyte costs them $2-$3 (at least in Australia where plans are limited to 14gig/month for $50-ish, and then extra for more, and/or severely limited bandwidth.)

A family’s 2.2 kids can easily use 4 hours per day x 31 days = 120 hours. Assume 1 gig video per hour (DVD quality is more like 2 gig/hr… and by the way, DVD-quality isn’t good enough for fast action games). That’s 120 gigs. Will your ISP let you use 120 gigs a month for a standard rate? At $2-$3, that’s $240-$360.

And that doesn’t include the cost of the hardware at the remote site… where you’d need 1 game device per 4(?) subscribers to meet peak-time demand. Don’t forget, you also need an extra CPU (or more) to compress the images to send over the internet, and AC to cool off the server room. It means, that at best, OnLive gets a 75% hardware cost savings, but probably more like a 50%.

Or wanting to use your cheap super power efficent netbook as a gaming device?

And honestly, terminal machines have had a long and successful history in certain contexts, especially back when it was too expensive to have decent processing power at every local machine. With rising hardware costs, we’re running into a similar situation (gaming hardware is too expensive for many people to afford), but now we can broadly distribute our terminals from the main servers thanks to broadband internet.