Ken’s Blog

TechCrunch’s reporting that OnLive managed to put together a series C round of funding to add on to their previous $16.5 million in funding. Looks like some large companies are hedging their bets a bit. You’ve got AT&T (likely for cable/television distribution), Warner Bros (movie and television as well), and  Autodesk (previously mentioned to be interested in the idea of cloud distributed 3D CAD).

If I had to guess, you’re looking at a $30-50 million round, given the players and how late the round is. So, you’re looking at enough to get ramped up for expansion (also, given the players) into other areas. The thing is, will they lose focus and end up spinning their wheels as competitors grab market share in the games market?

I still can’t help but think all this is doing is funding the build out of the on-demand gaming industry without any guarantee of success for OnLive itself. Plus, they’ve lit a spark. Outside of direct competitors trying to mimic their model, you’re going to see Microsoft putting some of that $9.5 billion (per year) in R&D funding to figure out how to repurpose the Xbox into a similar device…except it’ll have a hard disk and CPU to handle other stuff off-line (for instance, how’s about 160GB of cache space to speed things up even more?).

We’ll see…it’s six months until GDC 2010 and 9 months until E3. I’m guessing they’ll announce something by one of those events if they’re really on to something. If they don’t, then you’ve got to wonder if they aren’t taking a tangent they shouldn’t be.

kn

Not surprisingly, someone else has decided to throw their hat into the hosted gaming service arena along side OnLive’s. Gamasutra’s reporting that said competitor’s got a name, Gaikai. Better still, David Perry, the person behind Gaikai, is boasting that his service doesn’t require all the proprietary crap OnLive’s service has.

At least that means there’s going to be some competition in this market, which I love. Now, OnLive’s got a reason to continue to improve the service (though I suspect they’ll spend more time and effort on landing publishers before Gaikai does rather than spend on R&D).

I think Gaikai might be better positioned, though, since I think they’ll make a killing in Korea, China and Japan. A new PC used to be (and probably still is) the equivalent of a year’s salary in Korea…thus the reason LAN centers are the hub of gaming activity there. With this, they could shell out for an older PC and still keep up with the newer requirements of modern games…or better yet, play the games on their smartphones which I expect the Japanese to be doing already.

The bigger question will be if console makers will give in to these services. It’ll hurt their console sales. Though their business model’s all about game sales they’re still manufacturing those consoles and still measure penetration based on sales of those consoles. Besides, Microsoft and Sony both want to own that last leg (from the ISP to your home)  since it’s the most important leg when it comes to exposure and services. If Sony can advertise the hell out of their BluRay’s on your home entertainment center made by them, they’ll be a lot happier than having you use OnLive of Gaikai to just stream your entertainment (yup, don’t forget, if they can stream games, they can stream movies and TV eventually) to your home.

The next couple years will be very telling for this market. We’ll see…

kn

Had an interesting task at the Microsoft ITAC site related to Cloud Computing. Since it’s a members only site (no, not the jacket…I can’t find mine ), I figured I’d post it here.

There’s something out there but I think the market needs to mature a bit more.

Whether Microsoft will care or bother to read anything posted there is anyone’s guess.

kn