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Nvidia jumps into the cloud with Grid gaming service

The chipmaker hopes to drive interest in its Shield gaming devices with the streaming service, which offers 20 games that are free to play until next summer.

Nvidia's new Grid streaming service will add new games every week. Sarah Tew/CNET

Nvidia wants to prove it's serious about gaming -- and not just through its powerful graphics chips.

The Santa Clara, Calif.-based company on Thursday unveiled Grid, a streaming service for games. Having been in early tests over the last year, Grid will come with 20 games and is available in North America and exclusively on Shield gadgets, which include the Shield Tablet (starting at $299 without a $60 controller) and Shield Portable gaming device (for $199).

A free preview for Grid will begin on Tuesday, available through a software upgrade to Shield devices. The service will remain free through June of next year, and Nvidia plans to charge users after that -- though it hasn't disclosed any pricing. Western Europe will come online around December and Asia Pacific will have the service around the second quarter of next year. Available games include Batman: Arkham City, Borderlands 2 and Dead Island, with new games being added weekly.

Nvidia, which is best known for making graphics chips for PC gaming, has been working to grow beyond chips and hopes it can use its name brand in the video game world to expand into more gamer-focused areas -- first offering the Shield line and now a cloud-based gaming service for those devices. It marks a different strategy for the company, which has traditionally sold components that go into devices rather than the devices or services themselves.

While Netflix and Spotify have helped popularize streaming movies and music, streaming of games has yet to catch on with the public at large, in no small part because of persistent problems with delays between a user's controls and the game itself. Nvidia claims that its Grid technology improves lag and shortens the amount of time it takes to boot up a game when compared with other services such as Sony's PlayStation Now. Such improvements would help remove a major stumbling block for wider adoption of these services.

"We want to create a premium gaming experience," Andrew Fear, a senior product manager for the Grid business, said in an interview.

Nvidia becomes the third national provider of cloud-based gaming, joining PlayStation Now and OnLive, an early player in the streaming gaming space. While Nvidia's Shield Tablet runs on Google's Android operating system, the Grid service can only be used on Shield devices, in the same way PlayStation Now is only available on Sony electronics.

"This is a big deal, because we want to make Android a gaming platform" the same way Nvidia helped make the PC a gaming platform, Fear said. He added that Android is "still in its infancy," providing mostly casual games for users. Nvidia plans to bring "blockbuster titles," most that were developed for the PC, to Android.

There's plenty of skepticism that Nvidia can pull off running a streaming gaming service. If the company wants to create a service that can sustain itself, it will have to offer many more games and draw in far more customers than its current base of Shield users, said Lewis Ward, a video game analyst at IDC.

Ward said IDC did a survey earlier this year with 5,000 gamers in the US and found that not one of them had a Shield Portable. While the Shield Tablet is seen as selling better (Nvidia hasn't disclosed any unit sales), he still pegs the total Shield customer base at a few hundred thousand. That's not enough to operate a profitable cloud-gaming service, Ward said, even with a high rate of usage from current customers (Ward believes more than half of Shield owners in the western US, where the test phase was taking place, have used the Grid service).

Playing on Grid using the Shield Tablet. Sarah Tew/CNET

He said the real play for Nvidia is to prove its Grid technology is better than Sony's or OnLive's and then license out Grid to telecommunications providers or Web hosts. "The real pot of gold here is to sell that server chipset and server-blade technology for all those providers around the world who want to do cloud-stream gaming," Ward said.

In order to do that, Nvidia has to sell the idea of streaming games, which is likely why it is launching Grid in the first place. Outside of gaming, Nvidia's Grid virtualization technology has already been used by business and government customers to help run complex graphics, such as for sharing the design of a car across offices around the globe.

Along with the new gaming service, Nvidia said Thursday it plans to offer the newest version of Android, called Lollipop, by Tuesday, as well as updated versions of the Dabbler painting app and the Shield Hub, a menu page that lets users navigate between news, apps, PC games and the Grid service.

Also, new buyers of the 32-gigabyte version of Shield Tablet, which costs $399, will get three free games included -- Half Life 2, Portal and Half Life 2: Episode One. Half Life 2 and Portal were previously available for sale on Shield devices for $10 each.