Nintendo should be worried about OnLive

Infendo

A week or so ago, I talked about how Nintendo’s next generation console, beyond the Wii, wasn’t going to be a console at all, but a platform. A series of channels and streamed content that would show its mettle not on the console side of things, but in the services and functionality it provided over the web.

And today, as we sit eagerly in our seats wondering if Nintendo president Satoru Iwata will see his shadow during his GDC keynote (six more weeks of casual mini-games, oh noes!), I learned that this “next generation” platform is already here. It’s just not coming from Nintendo.

Indeed, as the GDC gets revved up into high gear, it was an unknown service called OnLive that had the blogs in a tizzy of excitement. Put simply, this service (if it works outside beta) will be a game changer.

If you haven’t yet heard of OnLive yet, you must first remove yourself, forcefully if necessary, from under that rock. Next, know this: It’s a powerful gaming delivered to you from the cloud. OnDemand’s super servers, scheduled to go live later this year, will stream Crysis in 720p with no lag. You can use the system with pretty much any computer you have handy. The graphics and horsepower are taken care of for you, out in the clouds.

The journalist response to the service so far has progressed something like this:

1. Journalist is doubtful the service can serve up Crysis in 720p, as advertised.
2. Journalist sees and plays demo in a controlled environment
3. Journalist needs to change pants

OK, so I exaggerate the last point. More seriously, said journalist probably runs back to his or her laptop to fire off a 1,500 word column about how OnLive is a game changer and the console guys should watch eff out.

But here’s the rub. I think Nintendo should be very worried about this kind of service, but not for the reasons all the blogs are going crazy over right now. 720p? Nintendo could care less. Add to that the fact that many of the demos are PC games-centric, and Nintendo cares even less. As with many video games stories these days, the “hardcore gaming press” is focusing on the extremes: The visuals, the audio, the online FPS multiplayer. Will this platform deliver the absolute best, “take my video games are art argument seriously” experience possible? I have yet to read an article on this service that does not mention HD, bandwidth rates and “latency” — all buzzwords that are largely irrelevant to a majority of people who play games today.

No, what should worry Nintendo is that this system is a work in progress for the beefy stuff mentioned above, but for the standard def games, family games, and other low bandwidth genres all the developers need to do is flick of a switch. OnLive has, in essence, scooped Nintendo with a low-cost service that has already proven it can pretty much handle the HD games and multiplayer that the fanatics love, meaning the simpler games will be delivered without so much as a thought. OnLive is, I think, what Nintendo’s end game looks like for the Wii, just minus the front loading optical disc drive and motion controls.

And even if OnLive fails, the platform can be easily shoehorned into any number of simple set top boxes that are finding a home under people’s TVs with greater numbers with each passing day. Apple has already filed an IR patent that synchs up with Apple TV, and it’s iPhone/iPod touch as a gaming platform was the talk of the town on GDC Day One.

This all makes what Satoru Iwata says today all the more interesting, I think. Simply saying “we’re a proven gaming company, and that is why our platform will prevail” isn’t enough anymore–not with the way tech is growing so quickly these days anyway. That train of thought certainly didn’t work for the PS3.

Nintendo, I’m sure, has its work cut out for it now.