Understanding next-gen streaming game services

Services that stream games from server farms may one day take over traditional PC gaming, and even console gaming. We break down the big players.

Josh Lowensohn Former Senior Writer
Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.
Josh Lowensohn
10 min read

Just like floppy disks gave way to CDs, then CDs to DVDs, followed by USB flash drives and SD cards, the time of game discs has an end in sight. Mind you, there's still a great need for them right now in the console and portable games world, but services like Valve's Steam on the PC (and now Mac) side have shown--in just a few years time--that the packaged game can make a graceful transition to the digital storefront.

What's more interesting, however, is the wave of new technologies that compete with Steam, and other download services like it--not only for PC games, but for console titles too. These streaming technologies, which include names like OnLive, Gaikai, Otoy , and InstantAction, promise to free us completely from the need to download software in the more traditional sense, and instead stream titles from a server cluster hundreds or even thousands of miles away from where you play them.

In a few months time (when this technology is more common) it will give you, the consumer, an alternative to buying new gaming hardware, while at the same time letting you pick up and play a new game on just about any Internet-connected device. Such a model may turn the gaming hardware industry on its head, but it opens up new avenues of utility for tablets, mobile phones, and even that 5- or 6-year-old computer that would have otherwise been hopelessly unable to run most modern-day titles.

When will it be like that? Soon, but not just yet. Many of the below services we're about to delve into are not live, or are live but aren't open to the public. Several are working on partnerships, back-end technology, and pricing. This story is to help serve as a primer for what each one promises to bring to cloud gaming, as well as some high-level detail on how it works. Read on to find out what could be taking the place of your next game console, or high-end graphics card purchase.

Availability: Limited public preview (with waiting list)
Price: Free year of service as part of launch promotion, $14.95 a month afterward. Game price varies by title.
Titles: <20
Platform compatibility: PC, Mac, MicroConsole TV adapter
Killer app: Solid launch lineup, and both rental and purchase options.

Onlive first premiered at last year's Game Developers Conference, and opened up to a public preview a few weeks ago at the Electronic Entertainment Expo (E3). Its premise is that it lets you stream full PC games over to your PC, Mac, and, soon, TV--the last of which requires a small piece of hardware the company is calling a MicroConsole.

Unlike standard PC games, playing these titles requires no space on your hard drive, or a beefy processor and graphics processing unit. Instead, all that work is done in the company's server farm, then piped over the Internet. This lets users on just about any hardware or platform play titles--as long as they have an active connection.

Playing games on OnLive requires that users be connected to the entirety of their gaming experience. Connection also plays an important part in determining the quality of the feed that's getting piped back to the user, be it an SD or HD stream.

Using the service requires paying a monthly membership fee, although right now the company has a partnership going with AT&T to provide new users with a free year of service. The games themselves cost money on top of that, though usually at a lower price than the boxed copy, or even digital download. These "playpasses" usually come in the form of an up-front purchase that lasts as long as the game is on the service. There are also shorter playpasses that work for just a few days, and can be had for a fraction of the full price of a title.

OnLive's "MicroConsole" hardware removes the need to use a PC, and lets gamers use OnLive's service on their TV sets. OnLive

OnLive saves game settings and progress on its own servers so you can access it from multiple computers without having to cart around save files. This information is kept even if a user's subscription has run out, so that they can come back to it at a later date.

Along with the playing of games, OnLive adds a few extra goodies on top of the experience that typical PC and console gamers don't get. The first being something called "brag clips," which is essentially a screen-recording tool that captures a segment of your gameplay and lets you share it to others on the service. OnLive also features a live performance area called the "Arena," where other OnLive users can watch you, along with several other players at once.

Availability: In beta now, full release in 2-3 months
Price: Unknown
Titles: Unknown
Platform compatibility: PC, Mac, mobile devices
Killer app: Server-side hardware plays beefy games. Games fully playable on product pages.

Gaikai, as explained to CNET by its co-founder David Perry is similar to game arcades back in their heyday. "You wanted to play the latest machines, but they were $5,000 to $10,000. So you stuck your quarters in," Perry said. Gaikai's answer, was to put that same kind of investment into data centers that can run any modern-day game, at any settings, then pipe that stream over to the end user.

This solution gives end users either a taste of the game, or the whole thing--a decision Perry and company are leaving up the publishers. "Initially, what we're expecting [publishers] to use us for is as a service," Perry said. "So say a new game is coming out like Diablo or World of Warcraft: Cataclysm, and you're writing about it. We can have that playable on the same page as that article."

Perry also explained that if a user can get instantaneous playing of a full game, or just a demo, right on a product page, it will go a long way toward helping shoppers click the buy button.

Along with convenience, Perry also stressed Gaikai's built-in security features. For instance, with something like the distribution of a pre-launch beta or exclusive demo, Gaikai's streaming system means that no game code gets distributed to end users--something Perry said can contribute to the eventual title's piracy. "Most hacking happens during the beta periods. The technology allows you to do cool stuff. Like if somebody crashes the code, we can send the video of that back to the game maker," Perry said.

To make that work all over the country, and eventually the rest of the world, Gaikai has built up data centers that will bring optimal speeds to users no matter where they are. "We have 10 data centers, and four more before launch--that's just in the U.S. That gives us nice coverage. We have these green dots and red dots on the map right now, and red dots are bad. It'll take some more data centers to get it to all green," said Perry.

Gaikai is going into a final, closed beta in two to three weeks, followed by a full launch in the next two to three months. Perry said that while the system is currently focused on PC titles, console games are on the road map.

Availability: Out, and growing
Price: Free to paid, depending on the app
Titles: Unknown
Platform compatibility: PC, Mac
Killer app: Embeddable version of full games with built-in rental and/or purchase system

CNET chatted about InstantAction's technology with CEO Lou Castle earlier in the week. In Castle's own words, Instant Action is a "software service that's dedicated to delivering online games that are sharable, embeddable, and free to play with incremental payments."

InstantAction's secret sauce is its streaming technology, which is able to let gamers start playing a title long before it's actually finished downloading. In real world times, that translates to giving users a start playing a 2.6GB game at 40MB, and a 9GB title at just 150MB.

While those first little bits are coming in, the company has partnered with the aforementioned Gaikai to give users something to watch or interact with while they're waiting in the form of videos or interactive games. "From a consumer's point of view, what they get is a loading screen with lots of videos. Or, in the best case, they get to play [their game] immediately," Castle said.

InstantAction also makes the embeddable game wrapper that can be stuck in places like blogs and social networks, which the company did a few months back with the game Monkey Island. Built into these embeds is a way to play a timed demo, or pay for rented time with the full version of the game. You can give the technology a spin by clicking the static image below:

Screenshot by Josh Lowensohn/CNET

Behind the scenes, another one of InstantAction's tricks is that it saves game states. "The game itself thinks it's saving everything to our hard drive," Castle explained. "We've hijacked all the save game and I/O stuff for the cloud." This ends up allowing games to be put into InstantAction's system with little modification on the part of the developer.

Castle would not go into detail on a full-out launch, except to say that the company was in various stages of trials with major publishers. The company is unveiling its own game next month that Castle says will help demonstrate InstantAction's various technologies, including game saves, embedding, and payments.

Availability: "This summer"
Price: Unknown
Titles: Unknown
Platform compatibility: Mac, PC, iOS, Android, Palm Web OS, Windows Mobile
Killer app: Server-side gaming that uses a custom "ORBX" codec, which promises better-quality streaming compression than H.264.

Similar to OnLive, Otoy's end goal is to run the games off its own servers, then pipe that over in real-time back to the end user.

Otoy has kept mum on the details surrounding its launch and what games will be available, however the company has been quite forthcoming with the hardware that's powering it on the back end. In January at CES, AMD's CEO Dirk Meyer announced that the two companies had partnered to build out a server farm made up of AMD-powered machines that will do the grunt work. Otoy is employing five of these data centers for its U.S. rollout, followed by additional ones in Western Europe and Asia.

CNET got in touch with Otoy's co-founder and president, Alissa Grainger, who said that the company is working with 11 publishers, all of whom "has a different launch target in mind." Grainger explained that Otoy's goal is to get those game streams syndicated to various portal sites, where users will be able to play the titles. How much that ends up costing, and which titles are available where, gets decided on by the publishers.

Otoy plans to stream both video and video games, and will do so using its own video codec called ORBX, which the company says can improve the compression quality of that video by 10 percent to 20 percent over the more common h.264. That means users end up with a better looking movie or game at the same size of stream.

As far as the hardware needed on the other end, Grainger says that the system requirements are minimal, and that it has been successfully tested on devices like the iPhone, and machines with Intel's Atom CPU. The company also has a "fallback solution" that uses HTML4, Adobe Flash, and Sun's Java to pipe the stream if the ORBX codec is not installed.

The only real need on the consumer side, Grainger said, is bandwidth. This falls between the less than 300 kilobits per second for an iPhone, all the way to 8 megabits to 10 megabits for 1080p content. 4k, which is the largest size Otoy offers, and commonly used as a native resolution for feature length films, requires a 25Mbps connection.

Grainger said that while Otoy would be launching first with PC titles, the company is "equally interested" in console games, and that the first crop of them will be playable on the service early next year.

Do these services spell an end for traditional console and computer gaming?

One day, yes. But for now, there is still the overwhelming benefit to home console and PC gaming in that you can play your games even if you don't have an active Internet connection. Cheap and fast Internet access may be growing, but we've already seen some early hiccups with PC games like Assassin's Creed 2 that have required an active connection for playing, which in turn, has alienated users who want to play a title while traveling, or on a machine without an active connection--but can't.

Will full-size downloadable games help instead? Certainly, but there's a serious size issue going on with consoles. Even though some, like the Xbox 360 and PlayStation 3, are now shipping with 250GB hard drives, the actual game discs would take up a sizable chunk of that if they were to be game installs. This is especially true on the PlayStation 3, where some multi-layer Blu-Ray titles like Metal Gear Solid 4 are pushing up against the 50GB limit on a dual-layer Blu-Ray disc.

Where these services show the most promise is in breaking the cycle of having to purchase expensive computer hardware that needs the occasional CPU or GPU upgrade to run the latest games, in place of a fast connection. Given the slow march of broadband penetration and speed increases in the U.S., this means these services have room to grow.

At the same time, with the recent push for bandwidth caps, both by ISPs like Comcast and mobile carriers like AT&T, there is now a ceiling on how how much playing time gamers might end up with, which is where encoding technology like Otoy's ORBX could become quite important.

The real indication of how successful these services will be is likely to come in just a few years, when the next generation of home consoles comes out. Are gamers going to invest in something new, or spend their money on something that will be able to run those same software titles on one or more devices they already have? For PC gamers, who upgrade more often than console gamers, that decision could be here even sooner.

Related: Spawn Labs, a $200 piece of hardware that can stream video and controls from your home game console, and StreamMyGame which is a software client that can pipe over your PC games to another computer.

See also: Hands-on with OnLive: Is this the future of PC gaming?