OnLive promises video games without the hardware

OnLive users have an online profile that saves the games they have rented or purchased and tracks their progress. Users can peruse the service to watch other games in process and connect with friends or other users for multiplayer sessions. Players can save "brag clips" of their best performances; those learning a game could watch more experienced players. "This gives you the ability to think of video games as television," Perlman says. "Anything is viewable."

Computer users will download a 1 megabyte Web browser plug-in that allows them to shop for games and use their profile. Once the games launch, they fill the screen with full resolution video. High-speed connections (five megabits per second or greater) allow for TV-based players to get high-definition-quality video.

Perlman, who previously helped develop QuickTime, WebTV and Moxi, spun Palo Alto, Calif.-based OnLive out of technology incubator firm Rearden. The system has been in development for seven years, and includes as investors Warner Bros., Auto Desk and Maverick Capital.

His previous work on multimedia settop boxes led Perlman to think "these boxes are just going to get bigger and bigger. … There must be a way to upgrade (video games) to get people out of this horrible console cycle," he says.

If OnLive can establish itself as a reliable and easy to use service, it has the potential "to compete with console games as interactive entertainment, and could have a very positive impact on high end PC games publishing," says Billy Pidgeon of research firm IDC. "The service would be an anti-piracy solution and would enable quality game play experiences without the cost of a game console or high performance PC."

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