OnLive rival talks service down

Vikas Gupta, CEO of TransGaming and cloud-based gaming service Game Tree TV has gotten into the spirit of friendly competition  by casting doubt on the success of OnLive, the rival service that focuses on bigger games.

“We’ve looked at OnLive’s [business] model and we don’t believe it’s sustainable,” Gupta told GamesIndustry.biz. “We don’t believe they can make money on it.

“We know what they’re making from a distribution fee perspective, because that’s their model… So EA says here’s a game, and that game retails for $50. We know that they’re only making x percent, and within that margin there’s no way they can make money, given their operating expenditure, as well as the initial capital expenditure in order to get that data centre up and running.”

Gupta puts it all down to OnLive’s ability to stream console experiences, and what would happen should it ever fail to deliver: “The problem, I feel, is that if I’m playing Call Of Duty and I know that on my PlayStation 3 it’s an amazing, uninterrupted experience, the minute I get jitters with OnLive, or any kind of stuttering, that’s it, I’m going to stop. These aren’t the sort of games where you can have that level of delay or unpredictable performance.”

Meanwhile, Game Tree TV avoids these threats by focusing on smaller games. Gupta is confident that this will soon put the service in the top spot: “Think of us as the Netflix of videogames-on-demand. We’ve got a sophisticated infrastructure located in the cloud… but the one big difference is that we download the content directly to the device, and that allows us to run the content optimally, and not have to worry about bandwidth issues and so on, which, in certain territories, can be a big problem.”

Contrary to these claims, Valve boss and industry legend Gabe Newell is apparently quite keen about OnLive, or so the company itself says.

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