Saturday, 16 June 2012

Will Microsoft Buy OnLive or Launch Xbox Cloud Gaming Themselves?

The final days before E3 2012 the internet was abound with rumors of Sony buying or partnering either OnLive or Gaikai. At the end nothing came out of these supposed cloud gaming deals, at least at E3. Isn't it funny that there are so many rumors about Sony and cloud gaming, but virtually none about Microsoft and cloud gaming?

Well, the time of there being no rumors about Microsoft and cloud gaming is officially over. Some Microsoft Xbox 720 roadmap PowerPoint slides named 92821757-XBox-720-9-24-Checkpoint-Draft-1.pptx were leaked to the internet and already taken down courtesy of Covington & Burling LLP, a law firm that represents Microsoft, which adds credibility to those slides. You can still download the leaked Microsoft Xbox 720 roadmap PowerPoint slides in PDF format from here, but they are without the speakers notes.

The part pertaining to OnLive is on slide 7 titled When: Xbox 720 versus the competition, in which stands:

  • PRODUCT: ONLIVE Micro Console (announced).
  • PRICING: $4.95/Month+Games.Console Est <$99.
  • KEY FEATURES: AAA Games, Instant Access, Multi-Player.
  • DIFFERENTIATOR: No “high-end/expensive” hardware.
  • VALUE PROP: AAA Gaming For Less (initial )$.
  • STRATEGY: Up-End the console gaming market by making expensive consoles and PC’s unnecessary for AAA gaming. Partner (e.g., AT&T) to give/subsidize HW to consumer, monetize on subs service + games.
  • THREAT: See Strategy. Potential acquisition target

You need to look at the speakers notes of PowerPoint slide 7 to see all the data about OnLive. According to this slide OnLive is a potential acquisition target for Microsoft. If this isn't worthy of a Microsoft and cloud gaming rumor, then what is?

Maybe history will repeat itself and Microsoft will buy out one of Steve Perlman's creations again, I mean OnLive already has Live after the On, so it is meant to be On Microsoft's Live service. We already know about Microsoft's friendly inclination towards OnLive DesktopOnLive Founder and CEO Steve Perlman also loves to name his companies with a meaning behind the name. For instance, Perlman's Rearden business incubator that has given birth to OnLive is named after Hank Rearden's company Rearden Steel. Hank Rearden is one of the main protagonists of Atlas Shrugged, the novel by Ayn Rand. The name OnLive just screams, "Microsoft, buy my company, then Live will really be live."

Of course Microsoft may have already tried to buy OnLive and was not successful. OnLive Founder and CEO Steve Perlman has already stated that they want to pursue a cloud gaming future on their own and they do have large investors and partners like AT&T, BT and Warner Bros., which might not be well inclined to sell a company that could bring about the future of gaming to a company like Microsoft that has the habit of monopolizing the market and strives to do the same with entertainment.

The part about Microsoft and cloud computing and cloud gaming starts in the later slides which have the title Cloud Value Proposition 2015, which means that Microsoft has grand plans to unify all forms of Xbox entertainment experiences like games, movies, TV, music, etc. via the cloud and serve them to any device that has a screen, be it PCs, TVs, tablets and smartphones. It looks like 2015 is the year that the Xbox cloud future fully clicks into gear.

These cloud strategy plans mean that Microsoft may be pursuing their cloud gaming plans themselves, after all they are very proficient with software, desktop virtualization, server infrastructure and above all have some money in their war chest, but we do know from history that Microsoft loves to buy their way to success and domination. The hardware part of this cloud gaming equation should be easy, as NVIDIA has not long ago announced their Geforce GRID cloud gaming technology, so it's obvious that Microsoft would go with the green goblin technology in their gaming cloud, though we do know that Microsoft loves AMD graphics in their consoles, so they may go with an inferior solution from AMD.

If you are interested in other tidbits about the Xbox 720 roadmap, you can study the other PowerPoint slides, which contain a lot of interesting data. I think Sony and Nintendo are now having a field day with these, or a fit of paranoia, it depends on how you look at these slides. You can never know if the leak was intentional or not, and some true parts like Xbox SmartGlass were simply added to fool the competition, but now it looks like I'm having a fit of paranoia, or are the Microsoft guys really so clever and cunning, though Microsoft is more known as a boring and slow-moving behemoth.

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