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History > 2009 > USA > Video games (I)




Apple’s Shadow Hangs

Over Game Console Makers


September 26, 2009
The New York Times


TOKYO — As video game giants like Sony and Microsoft touted their new gizmos at the Tokyo Game Show this week, industry executives had more than the coming holiday sales season on their minds.

Apple’s recent foray into video games — with the iPhone, the iPod Touch and its ever-expanding online App Store — is causing as much hand-wringing among old industry players as the global economic slump, which threatens to take the steam out of year-end shopping for the second consecutive year.

Among the questions voiced by video game executives: How can Nintendo, Sony and Microsoft keep consumers hooked on game-only consoles, like the Wii or even the PlayStation Portable, when Apple offers games on popular, everyday devices that double as cellphones and music players?

And how can game developers and the makers of big consoles persuade consumers to buy the latest shoot’em-ups for $30 or more, when Apple’s App store is full of games, created by developers around the world and approved by Apple, that cost as little as 99 cents — or even are free?

“The next breakthrough in gaming is not going to be in hardware,” Yoichi Wada, president of a top Japanese game maker, Square Enix, told Game Show participants. “It’s going to be in how to create a successful business model.”

Haruhiro Tsujimoto, chief executive at another major game maker, Capcom, said, “In the past year, the gaming lifestyle has been transformed.”

“Cellphones have become a recognized gaming device,” Mr. Tsujimoto said.

The concerns highlight an accelerating shift away from hard-core games, which have traditionally driven console sales, to more casual ones played on cellphones. Of the 758 new game titles shown at the Tokyo Game Show, 168 were for cellphone platforms — more than twice as many as in the previous year.

Apple did not participate in the Tokyo Game Show, which ends Sunday. But the company introduced a beefed-up version of the iPod Touch this month, explicitly comparing it as a gaming platform with the Nintendo DS and Sony PlayStation Portable.

Apple’s assault could even eat into sales of home consoles like Nintendo’s Wii, Sony’s PlayStation 3 or Microsoft’s XBox, as game-playing quickly becomes centered on cellphones. Many in the industry say that Nintendo, Sony and Microsoft need to explore more radical changes to their businesses, including an emphasis on software rather than hardware and a better way for users to download games.

“As a platform, the cellphone has the biggest potential, because everybody owns one,” said Kazumi Kitaue, chief executive at another game maker, Konami Digital Entertainment. A family with three children might buy just one Wii or PlayStation to share, but those children will probably have cellphones of their own and download and play games, Mr. Kitaue said.

For game makers like Konami, the iPhone could be an attractive platform because it is cheap and easy to develop games for, with potentially large returns. Developing games for sophisticated machines like PlayStation 3 and XBox, on the other hand, is time-consuming and expensive.

Decreasing interest from game makers could further hurt Sony, Nintendo and Microsoft, because they rely on solid game lineups to drive console sales. And in turn, lower console sales would mean fewer developers interested in making new games.

To bolster sales of its Wii, Nintendo said Thursday that it would cut its price by a fifth in major markets, following similar cuts by Sony and Microsoft for their own consoles. Nintendo is trying to stem a recent slide in popularity of the Wii. The console was a hit with consumers, thanks to its motion-sensitive controller, but sales have stalled, dropping to 2.23 million units in the April-to-June quarter from 5.17 million a year earlier.

A year ago, Nintendo also introduced a new version of its DS handheld device that lets users download digital content, including music, photos, videos and games, via a Wi-Fi connection — a clear imitation of Apple’s App Store.

Microsoft, meanwhile, is developing technology that lets people play video games using natural body movements instead of hand-held controllers. In June, the company introduced a prototype of a project code-named Natal, a motion system that combines cameras with voice and face-recognition software.

Sony has promised even more hardware wizardry: 3-D video games and a new controller much like the Wii that is shaped like a lollipop and senses motion. Its PlayStation Go portable console, due next month, does away with memory discs and instead relies on downloads from a virtual store.

“We want to build controllers you can’t even begin to imagine could exist,” Kazuo Hirai, head of Sony’s gaming unit, said at the Game Show.

But analysts say hardware is fast losing center stage to software in the game-playing world. What will draw consumers, said Hirokazu Hanamura, president of the Tokyo market research company, Enterbrain, is software prowess, like Apple’s App Store, which already has 21,100 games — far more than Nintendo and Sony combined.

“We are going to move away from a market where it’s the hardware that fights against each other,” Mr. Hanamura said at a recent presentation. “We are going to be moving to an era when different software stores fight against each other.”

Many within the industry are wary of change.

“It’s quite frightening to change to a completely different business model,” said Shin Unozawa, chief executive at Namco Bandai, a game maker. “Games at ¥100, ¥50 a shot — none of us can muster up the courage to go there.” That is the equivalent of $1.10 and $0.55.

Still, Japan has experience in developing games for cellphones.

Cellphone-only Web services, like i-Mode from the biggest Japanese carrier, NTT DoCoMo, have fostered a sizable market for cellphone games created by small developers — though the isolated nature of Japan’s cellphone industry has meant that few companies have expanded overseas.

According to an industry group, Japan’s cellphone game market reached ¥16.25 billion in 2007.

“Japan is a nation of advanced cellphone technology,” said Mr. Tsujimoto of Capcom. “By harnessing that strength, we can compete with America.”

Japanese companies have been especially successful in combining mobile phone games with social networking. Gree, a fast-growing site with about 12.6 million users, gets visitors hooked on its social networking service, then offers cellphone games on its mobile version. The company makes money on advertisements and by charging for premium accounts.

Linking social networks with gaming is one way forward for the video game industry, said Gree’s chief executive, Yoshikazu Tanaka. “After a certain point, consumers will say, enough with the high-spec hardware. Then the focus turns to content, to building communities around games,” he said.

Some Japanese game developers, meanwhile, have jumped on the iPhone bandwagon. When Apple first released the iPhone in the United States in 2007, Masato Shibata, an executive in charge of new businesses at Hudson, a games company, was so excited that he secretly got an unlocked handset that would work in Japan.

“I got goose bumps. I knew this was going to revolutionize the world of gaming,” Mr. Shibata said. “And I knew it would hit Japan in a big way.”

Since then, Hudson has introduced 26 applications for the App Store and logged 3 million downloads. Hudson plans to increase the pace of development, creating 20 applications a year.

Price competition has been tough: Last year, Hudson was about to release an iPhone application based on the Chinese game of mah-jongg for ¥1,200; it had to cut the price to ¥105 when a rival came out with a similar game.

Still, many Japanese developers are intrigued by the iPhone. A recent survey of 102 game developers by CRI MiddleWare, a cellphone technology company, found that more than 80 percent of respondents were interested in developing for the iPhone or iPod Touch.

For now, console giants like Sony are dismissive.

“The quality of cellphone games is varied, and you couldn’t play many of them for hours,” said Shuhei Yoshida, president of Sony’s games development arm.

“Will a company be able to operate completely on these games? No,” Mr. Yoshida said. “After all, we’re talking about the kind of games people make sitting in a cafe with a laptop.”


Yiyi Jiang contributed to this report from Tokyo.

    Apple’s Shadow Hangs Over Game Console Makers, NYT, 26.9.2009, http://www.nytimes.com/2009/09/26/technology/26games.html






US artist cleared over George Bush assassination videogame

Federal court rules closure of public display featuring the videogame, Virtual Jihadi, was unconstitutional


Friday 12 June 2009 10.39 BST
Bobbie Johnson


An Iraqi-American artist has been vindicated after coming under attack for making a videogame in which players have to assassinate George Bush.

Artist Wafaa Bilal created the game Virtual Jihadi last year, in what he claimed was an attempt to "bring attention to the vulnerability of Iraqi civilians". But the game, which involved an attempted strike on the former US president's life, caused a storm of protest, including accusations that Bilal was encouraging terrorism.

The controversy reached fever pitch when a public display featuring the game in New York was closed down by local authorities amid claims that the organisers had committed a number of infractions.

However, following accusations that the shutdown was an infringement of Bilal's rights, a federal court has ruled that the closure was unconstitutional.

The court found that the reason for the closure – code violations cited by local public works commissioner Robert Mirch – were in fact bogus.

"Mr Mirch abused his authority to suppress the free speech rights of people he disagrees with, an unconstitutional act that must be challenged," said Melanie Trimble, director of the New York Civil Liberties Union, which sued on behalf of Bilal.

The artist, who fled Iraq in 1992 after the first Gulf war, is an assistant professor at New York University's Tische School for the Arts and produced Virtual Jihadi after his brother was killed in an American bombing raid.

He hacked and reworked a game called Quest for Saddam, in which players took the part of a soldier in the Iraq war, in an attempt to show that the civilians in the conflict were not merely stereotypes or characters in a virtual shoot-out, but real people.

According to the game's website, Virtual Jihadi was "meant to bring attention to the vulnerability of Iraqi civilians to the travesties of the current war and racist generalisations and stereotypes as exhibited in games such as Quest for Saddam".

However the game caused outrage, and a show of Bilal's work at the Rensselaer Polytechnic Institute was suspended shortly after the institution was accused of becoming a "terrorist safe haven".

    US artist cleared over George Bush assassination videogame, G, 12.6.2009, http://www.guardian.co.uk/technology/gamesblog/2009/jun/12/george-bush-assassination-videogame-virtual-jihadi






Digital Downloads Spell End For Videogame Stores?


June 11, 2009
Filed at 2:38 a.m. ET
The New York Times


LOS ANGELES (Reuters) - Will digital downloads kill the videogames store? That's the multibillion dollar question facing retailers from Wal-Mart Stores Inc and Target Corp to GameStop Corp, as Internet distributors continue to grow.

Retailers like Target splashed out on large booths at last week's E3 Expo in Los Angeles, showcasing games like Activision's "Transformers: Revenge of the Fallen."

But gamers -- especially on personal computers -- are increasingly turning to alternative methods to play and buy games, such as downloading or "streaming" online games, rather than trekking to a store.

Take industry veteran Dave Perry, whose Gaikai online system lets PC gamers buy and stream games through their Web browsers without needing to download any content.

"Our solution is not to dive into a fight with Sony (Corp), Microsoft (Corp), Nintendo Co Ltd, as it wouldn't gain any 'new audience' for publishers," Perry said. "Instead, our strategy is 100 percent focused on being an ally to publishers and first-party hardware makers, by delivering them audiences they don't reach today."

Digital downloads are still a small, but fast-growing business. According to the NPD group, 17 percent of games sold in 2008 by PC gamers were digitally downloaded. Microsoft and Sony are trying to convert console gamers who have become accustomed to consuming music and movies digitally via services like Netflix and Apple Inc's iTunes.

Wedbush Morgan Securities analyst Michael Pachter estimates digitally downloaded games will account for roughly 2 percent of industry sales this year, or around $400 million. He expects demand to double annually for a few years, to $800 million in 2010 and $1.6 billion by 2011.

"As broadband penetration increases and the Internet connection migrates to the living room, downloads or cloud computing solutions will become much more viable," he said.

"Downloads will become 20 percent of the market within five years, and probably peak at around 50 percent of the overall market in 10 years," said Pachter. This assumes an overall market growth of 5 to 10 percent annually, he added.



With videogame sales growth slowing somewhat, publishers and developers are seeking new channels to reach customers.

Yet some retailers resist the format, arguing that going through a third-party online distributor further saps margins for both developers and retail chains. Analysts say the big retail chains like Wal-Mart and Target have also yet to embrace and invest in digital sales.

"Nothing that has been digitally distributed retains the same value as a retail version; it's always less," GameStop CEO Dan DeMatteo said in September.

Getting content on demand is no stranger to households accustomed to watching movies over set-top boxes, or teens streaming music over the Internet. But spontaneously ordering a game is stymied somewhat by the limits of the gamers' personal computer system.

Some fledgling companies try to work around that.

Over the past seven years, entrepreneur Steve Perlman has been developing a digital distribution box called OnLive. He hopes to offer high-definition PC games on low-end hardware.

OnLive has struck deals with Electronic Arts Inc, Ubisoft, Take Two Interactive, Warner Bros. Interactive Entertainment, THQ, Epic Games, Eidos, Atari and Codemasters. While the company had 16 games on display in March at the Game Developers Conference, it had no presence on the E3 show floor.

OnLive this fall is slated to launch a subscription service similar to Microsoft's Xbox Live.

NPD estimates 18 percent of Xbox 360 users who have a "Gold" membership to Microsoft's Xbox Live service regularly download from Xbox Live Arcade, and 10 percent of PlayStation 3 users regularly buy digitally from Sony's PlayStation Network.

The largest independent games distribution network is Valve Software's Steam, which has 21 million users and 700 games.

Doug Lombardi, vice president of marketing at Valve Software -- known as the groundbreaking backers of the "Half-Life" shooter series -- said digital distribution has already been largely embraced by the industry.

But the real forte of digital distribution may be the ability to provide automatic updates and extras, keeping things new as with the Team Fortress multiplayer-shooter series.

"Now that games can be connected to their audience, they will last and grow well beyond their traditional 6-month to 1-year sales cycle," Lombardi said.


(Reporting by John Gaudiosi; Editing by Edwin Chan, Richard Chang)

    Digital Downloads Spell End For Videogame Stores?, NYT, 11.6.2009, http://www.nytimes.com/reuters/2009/06/11/technology/tech-us-column-pluggedin-digdownloads.html






Microsoft Reveals New Strategy for Xbox


June 2, 2009
The New York Times


LOS ANGELES — Reaching out beyond hardcore video game players to everyday consumers, Microsoft outlined an entertainment strategy on Monday for making the company’s Xbox 360 game console a gateway for movies, television and social networking.

In a media presentation on the eve of E3, the video game industry’s biggest North American convention, Microsoft announced new relationships with the social networking giants Facebook and Twitter as well as Sky, the big British satellite television provider that is a unit of the News Corporation.

Microsoft announced that Facebook users would be able to access their profiles and share photos on their television through the Xbox Live network and that Twitter devotees would also be able to post and read messages through the service.

More far-reaching was Microsoft’s new deal with Sky, under which Xbox Live users in Britain will be able to watch live television, including professional soccer, over an Internet version of the Sky service. Not every channel available over satellite will be available over Xbox Live, but the offering will include dozens of stations, Microsoft executives said. Users will be able to watch television in a virtual party room with their friends, discussing the program as they are watching, they said.

Microsoft executives refused to comment on whether the company was trying to negotiate a similar deal with Sky’s sister satellite television operation in the United States, DirecTV.

Microsoft has long sought a bigger role in home television, going so far in years past as to try to build its own set-top box business. Partnering with Sky represents a back door into the television market. The company has also recognized how Nintendo has expanded the traditional audience for video games with its innovative motion-sensitive controller for the Wii. Microsoft provided the first public demonstration of its futuristic Project Natal, which it hopes will usher in an age of completely controller-free gaming.

Using a sophisticated camera, infrared sensors and voice recognition software, Natal allows users to control a game or other programs, like a virtual painting studio, merely by waving their arms, speaking to the system and moving around.

Microsoft did not say when the technology would become available.

Microsoft also demonstrated some of its coming big games, including Forza Motorsport 3, the suspense-thriller Alan Wake and a new version of its biggest hit, Halo. Hideo Kojima, the developer behind the Metal Gear series, said that the next major installment in that franchise would be available for Xbox 360, a coup for Microsoft because previous Metal Gear games had been exclusive to Sony game machines.

    Microsoft Reveals New Strategy for Xbox, NYT, 2.6.2009, http://www.nytimes.com/2009/06/02/technology/companies/02soft.html?hpw






Game Review: 'inFamous' an Electrifying Experience


May 27, 2009
The New York Times
Filed at 8:53 a.m. ET


It's fitting that ''inFamous'' (Sony, for the PlayStation 3, $59.99) is being released at the same time as summer blockbusters such as ''Terminator Salvation'' and ''X-Men Origins: Wolverine'' because Cole, the sizzling superpowered protagonist of this open-world action game, can be just as ferocious as Wolverine or as inspirational as John Connor.

But it's up to the players to decide just how good or evil Cole will be after he awakens at the epicenter of an explosion that has morphed Empire City into a chaotic quarantined metropolis and has transformed the throaty messenger bag-toting courier into a morally confused, walking third rail.

As he tries to discover the source of the explosion and his electrifying new abilities, Cole has his karma tracked on a color-coded dial. His itinerary and superpowers fluctuate depending on whether players direct him to be naughty, like mercilessly leeching innocent citizens for more power, or nice, like providing sick folks with a whiz-bang healing touch.

In one instance at the beginning of ''inFamous,'' players must choose to either blast a group of starving civilians huddled over a pile of air-dropped rations so Cole and his pals have enough supplies to survive or divide the grub evenly among everyone. Such decisions aren't superficial. The consequences of Cole's actions are neatly woven into the plot.

Just as provocative as the game's narrative is Empire City, which is divided into three islands. The decaying urban locale is punctuated with elevated trains, skyscrapers, water towers and -- of course -- plenty of power lines. As the story progresses, the time of day and the color of the sky shift throughout the sweeping city, always striking the right mood.

While Cole can scale the urban trappings like Spider-Man, pound down on the game's baddies like Thor and eventually streak across the cityscape like Superman, he never really comes off as a clone of superheroes who have come before him, which perhaps makes ''inFamous'' a more engaging experience than a summer action flick.

Sucker Punch Productions started from scratch, creating an epic story that's not at all familiar. Without a back story to debate or previous editions to parallel, everything about ''inFamous'' feels fresh. From the moment players first hit the start button, there's no reinvention, just imagination.


On the Net:


    Game Review: 'inFamous' an Electrifying Experience, NYT, 27.5.2009, http://www.nytimes.com/aponline/2009/05/27/arts/AP-US-Game-Review-inFamous.html






'The Sims' Return With More Personality Quirks


May 22, 2009
Filed at 10:31 a.m. ET
The New York Times


SAN FRANCISCO (AP) -- Maybe it's neat, childish, lucky, ambitious and insane -- just depends on what traits gamers choose for their neighborhood of virtual playthings in ''The Sims 3,'' Electronic Arts and Maxis' popular life-simulating game for the PC and Mac.

Executive producer Ben Bell said it will focus more on social behavior than ever before.

'''The Sims 3' is a huge step forward for us,'' said Bell. ''You can create incredibly detailed people who have real personalities that you get to design using a feature we call personality traits. By combining words, you can create a new kind of a person that has totally different desires in life and then you get to go fulfill their destiny in the game.''

Unlike previous editions in the series, every character will live their lives simultaneously in the fictional town of Sunset Valley.

Bell said ''The Sims 3,'' available June 3, will also feature a moviemaking tool and more options for players to customize their Sims' homes, furnishings and clothes. Gamers can even turn their Sims into kleptomaniacs.

''A Sim who has this trait is going to have wishes in life to steal things from other people,'' said Bell. ''They also have the ability to sneak into a friend's house, walk into a room where nobody happens to be hanging out and maybe swipe something. One of the fun things I've seen people on the team do is build up a whole household of stolen things.''

In perhaps a case of life imitating art, a pirated copy of ''The Sims 3'' has already been leaked on several file-sharing Web sites two weeks before the game's launch.

EA said the pirated version ''is a buggy, pre-final'' version of the game.

''It's not the full game. Half of the world -- an entire second city -- is missing,'' said spokeswoman Holly Rockwood in a statement.

Electronic Arts has announced it is publishing ''The Sims 3'' without restrictive anti-piracy software known as DRM, a form of copy protection that requires online authentication.


On the Net:


    'The Sims' Return With More Personality Quirks, NYT, 22.5.2009, http://www.nytimes.com/aponline/2009/05/22/arts/AP-US-Games-The-Sims-3.html







Making the Sims Into Neighbors You Can Relate To


May 14, 2009
The New York Times


IN its biggest campaign yet for its biggest franchise, Electronic Arts is making The Sims video game a little more sociable.

The Sims lets players choose characters and create lives for them, selecting everything from when they sleep to what their bathroom looks like (“Sims” is short for “simulated”). Introduced in 2000, and updated in 2004, it became the best-selling line of PC-based video games in the world.

In The Sims 3, which goes on sale June 2, there are new features.

Previously, players could choose what Sims looked like; now they can choose their personality traits — neurotic, vain, loves to cook and so on. “What they want from life is determined by their personality traits,” said Benjamin Bell, the game’s executive producer.

“We really felt like the ability to create human beings, to give them a soul if you will, was really exciting, so we wanted to come up with some ways that people could define the personalities of their character,” Mr. Bell said.

And while the characters lived in a single household in earlier versions, they now live in a town. The game supplies characters that also live in the town, but players can create new citizens, change the existing ones, or remove them and replace them with, say, replicas of the cast of “Lost” to see what it is like to live next door to them.

Electronic Arts executives wanted the marketing campaign to showcase the new features of The Sims 3, and to get people who might not play the game to understand what it was about.

The focus of the marketing is online, and beginning Friday, Electronic Arts will begin offering three ways for consumers to play with Sims characters on the Web.

There will be a free trial available at Sims3.com and at the Sims 3 fan page on Facebook, meant for people who have never played the game before.

Another option, called SimFriend, lets visitors to the Web site pick a Sim pen pal from among 120 characters, and that pen pal will send e-mail messages. For example, a Sim might send a message asking what type of dinner she should cook for her boyfriend, and the fan picks from options like “Cook an elegant meal.” The e-mail chain would continue, tailored to the Sim’s personality and skills.

“If the Sim happens to be a kleptomaniac chef, the response you get back might be, ‘Thanks, I went and stole food today,’ when what you’re expecting is ‘Thanks, I just had lunch,’ ” said John Buchanan, senior director of worldwide marketing for the Sims line at Electronic Arts.

The third option is called SimSidekick. A fans chooses from 6 characters on the Web site, and an image of the character that is chosen floats on top of the browser as the fan moves around the Web.

The character has site-specific responses to sites that Electronic Arts has chosen, like MTV.com, YouTube, and Twitter. On Twitter, for instance, where the mascot is a bird, a flock of bluebirds descends on the character, and, depending on its personality, the character will jump, wave his or her hands, or respond in some other way.

On other sites, the SimSidekick software looks for the category of the Web site, like travel or news, and the character responds appropriately, acting like a sports fanatic on a site like ESPN.com, or looking like he’s searching for something on Google.com.

The effort is reminiscent of what Skittles, the Mars candy brand, did this year with its Web site, showing a floating Skittles graphic on top of the browser that took visitors to the brand’s photos on Flickr or product pages on Facebook.

Sims characters will also come to life on the Viacom sites MTV.com, VH1.com and AddictingGames.com, a game site, on June 2. Characters will move around text and graphics on pages of the sites. The game will also be promoted through an iPhone sampler application, available now (the full game will be available for purchase and play on the iPhone or iTouch on June 2; a Macintosh version will also be available then). Freestyle Interactive in San Francisco, part of the Isobar division of Aegis, worked on the digital advertising efforts.

But measuring whether these efforts are a hit or a flop is a challenge for Electronic Arts, which, like other marketers, hasn’t quite determined how to assess social media advertising. As Microsoft marketing executive Mich Mathews said at the annual 4A’s advertising conference last month, a result like 100,000 views of a YouTube video doesn’t mean very much. “I would confess, though, we look at it: ‘Is that a good number or not a good number?’ ” she said.

Mr. Buchanan said that Electronic Arts would look closely at Web site traffic, advance sales and game sales, along with monitoring how consumers were reacting to the game in online discussions. “We’ll be able to get closer to measuring what’s working and not working, but there’s still a little bit of art in identifying performance in the new media space, versus being all science,” he said.

In print and television, the ads will emphasize the new features of The Sims 3. Along with the town setting and the personality traits, it will be the first time that players can minutely adjust features like the squareness of a character’s chin, the depth of its eyes, or its weight . The campaign’s tagline is “Let There Be Sims.”

“It’s referring to the fact that there are almost little people that live in your computer, and because of these new personalities and traits, they have a life of their own and do what they want,” said Aaron Allen, a creative director at Wieden + Kennedy, which created the print and television ads. One TV ad shows a house on fire and people stealing a television — to appeal to the subset of Sims players known affectionately as deviants — and then, for the romantics, a couple finding one another.

“The Sims is all about the characters, and it’s characters that are written into the game and characters you create, and every interaction you have, you get a different response,” said Ian Schafer, the chief executive of the digital-marketing firm Deep Focus, which did not work on the campaign. “That’s the beauty of the game, and that’s the beauty of the campaign,” He said.

    Making the Sims Into Neighbors You Can Relate To, NYT, 14.5.2009, http://www.nytimes.com/2009/05/14/business/media/14adco.html






"Cloud - Based" Console Takes Aim At Wii, PS3, Xbox 360


March 25, 2009
Filed at 6:01 a.m. ET
The New York Times


SAN FRANCISCO (Reuters) - A new videogame company is aiming to challenge the big three console makers by providing a "cloud-based" gaming system promising on-demand access to games and no lag time.

The fledging company, called OnLive, said its service will allow users to play games on any TV and nearly any personal computer -- even stripped-down netbooks and PCs without graphics processors.

A console slightly larger than an iPhone connects TVs and broadband connections to the OnLive service, and is operated via a wireless controller. OnLive delivers games run on servers in the "cloud," rather than locally on a PC or a console.

OnLive, which has been in development for seven years, has deals in place with 10 publishers to provide new game titles when they hit the shelves. Heavyweights such as Electronic Arts, Ubisoft, Take Two, and THQ have signed on.

"When you want to play a game, you just click a button and it plays instantly," said Steve Perlman, OnLive's founder and chief executive. "It's that simple."

Perlman is a well-known Silicon Valley entrepreneur who helped launch WebTV, which Microsoft bought in 1997.

He said OnLive allows complex and graphically rich games to play with outstanding performance on even low-end PCs or Macs.

The company expects to launch its service in the winter of 2009. Although OnLive did not release details on pricing, it will follow a subscription model and Perlman said it will be "significantly" cheaper than consoles.

Nintendo's Wii, Microsoft's Xbox 360 and Sony's PlayStation 3 consoles can cost anywhere from $200 to $400.

OnLive was formally launched Tuesday at the Game Developers Conference in San Francisco. Its innovation rests in its video compression technology, which instantly streams video down through the Internet so that it appears "effectively instantaneously," Perlman said.

"Perceptually, it appears the game is playing locally."

OnLive, which was spun out of technology incubator Rearden, is headquartered in Palo Alto, California. Its investors include Time Warner's Warner Bros., Autodesk and Maverick Capital.

(Reporting by Gabriel Madway; Editing by Edwin Chan, Gary Hill)

    "Cloud - Based" Console Takes Aim At Wii, PS3, Xbox 360, NYT, 25.3.2009, http://www.nytimes.com/reuters/2009/03/25/technology/tech-us-rearden-onlive.html