On the cusp of cloud-gaming outfit OnLive going down in flames and evaporating, it appears that major ISPs are looking into their own cloud-gaming delivery services to players who use Internet-enabled devices such as smart TVs. According to a report in Bloomberg, AT&T Inc., Verizon Communications Inc., and Time Warner Cable Inc. expect to start trails in cloud gaming services as early as later this year with wider deployments expected as early as 2013.
It’s suspected that this move might be a strategic maneuver against consoles such as Xbox, Wii, and PlayStation as these devices become less consoles and more Internet-connected devices that themselves rely on cloud-gaming services. In fact, the Xbox has long been seen as Microsoft’s stealth-offering to the living room cloud.
ISPs sending games to Internet-enabled TVs is essentially the opposite of Xbox’s gaming console seeking to bring TV and media programming into themselves via the Internet; but it falls into almost exactly the same markets. Also, looking at the free-to-play console coming from OUYA, there may be a great deal of new competition entering this market.
Although, it’s hard to see anyone actually toppling the three major consoles from their video game King of the Mountain.
In addition to AT&T, Verizon and Time Warner Cable, Comcast Corp. (CMCSA) and Cox Communications Inc. are also in talks to offer video-gaming services, the people said. They’re all looking to go beyond social games from Zynga Inc. (ZNGA) and casual games such as “Tetris” and “Solitaire,” with technology that can deliver the most advanced action games from top publishers such as Electronic Arts Inc. (EA)
For technology, the carriers are turning to startups such as Playcast Media Systems, CiiNOW Inc. and Agawi Inc., which provide software to speed delivery of real-time gaming. Executives at each of those companies acknowledged that they’re in talks with U.S. carriers, declining to say which ones.
According to the National Cable & Telecommunications Association Verizon had 4.47 million TV subscribers, while Cox had 4.66 million. This might actually generate a dent when it comes to Internet-enabled TV subscribers vs. people who happen to own a game console (which also have a deep penetration into the consumer market.)
The big difference is that people who might use their Internet-enabled TV for gaming will not be seeking the same type of games that gamers who go to consoles. As mentioned above, EA and Zynga might be major players in this new market with social and casual styled gaming—whereas players who go to Xbox and PlayStation often play games such as Call of Duty: Modern Warfare 3 and the upcoming Black Ops 2—high graphics, massive action games that require local processing and would not play well over a cloud-gaming service.
Internet-enabled TVs and current streaming technology in the market?
With the loss of OnLive in the market, all that remains in the cloud-gaming is Gaikai—who just happen to have been bought by Sony, the developer of the PlayStation and numerous Internet-enabled TV products. Even if major ISPs open up their own market for cloud-gaming, they will have to contend with the primary rival to OnLive still persisting in that marketspace and hooked into a major manufacturer of SmartTV technology as well as someone who already does consoles.
The PlayStation may be an expensive venture, whereas a SmartTV might just come with a new TV anyway, but PS3 players have a wider variety to work with than someone who just gets their games and such via their cable or ISP to their Internet-enabled TV.
Of course, this does mean that both EA and Zynga will see a huge boost in audience by going through these major ISPs and cable companies in order to have their games pushed to Smart TVs; but it’s not a good time to write off consoles themselves, especially with Gaikai still pushing their advantage.