Steve Perlman OnLive DICE Presentation

February 18, 2010

Instant Gratification
Video Games in the “Now” Era
Steve Perlman
Founder & CEO, OnLive
Page 2
February 18, 2010

Welcome to the “Now” Era
All media
what you want
when you want it
where you want it
instantly delivered…NOW.
February 18, 2010
Page 3

We’re Already There
“Real-time entertainment traffic has exploded.”
“26.6 percent of total traffic in 2009, up from 12.6 percent in 2008.”
“Massive shift in behavior from … ‘download now, use later’ content acquisition to an on-demand mentality.”
“Bytes are consumed as they arrive.”
“Almost two-thirds of all Internet traffic in 2009 is enjoyed on arrival.”1
February 18, 2010
Page 4
1Source: SandvineBroadband Phenomena Report, 10/26/09

Music, Video/Movies, then Games
Music became the first “Now” media
Industry was unprepared: Devastated the business
Videos/Movies in the midst of transition to “Now”
Industry struggling to redefine itself
So far, losing ground and no clear path
Videogames just starting transition to “Now”
Starting to feel the effects
February 18, 2010
Page 5

Old Think: a Device Defines Media
Physical device tied to the experience
“What CD is playing?”
“We’re watching a DVD tonight.”
“Improve your grades or no more XBox!”
February 18, 2010
Page 6

New Think: Experience Defines Media
Music
“It’s a track from a new Paramore-like band.”
Could be from Pandora, iTunes, Amazon, pirate sites, etc.
Unlikely from a CD
Video/Movies
“Did you see the new Tina Fey Sarah Palin skit?”
Could be from YouTube, Hulu, nbc.com, pirate sites, etc.
Unlikely watched on live TV
February 18, 2010
Page 7

Media of the Moment
Music, video/movies (“linear media”)
Physical media in rapid decline
Interim growth in rentals (Netflix, redbox)
Downloaded media past its peak
Even BitTorrent on the decline
Streaming media now majority of all Internet traffic
YouTube, Hulu, Pandora, etc.
February 18, 2010
Page 8

Online Linear Media Hard to Monetize
Online linear media a loss-leader business
iTunes/App Store “a bit over break even”1
Apple makes its money selling hardware and software
Netflix charges zero for online video
Netflix makes its money mailing DVDs
YouTube continues to lose money
Google makes its money selling search ads
Pirated linear media widely available
YouTube infringement a game of “Whac-A-Mole”
Hard to compete with free
February 18, 2010
Page 9
1Source: Apple CFO Peter Oppenheimer, 1/26/10

What about “Now” Games?
Videogames a different beast than linear media
Large file needed before game can start
Tied to specific playback devices
Online games can’t be pirated
Still, videogames subject to consumer attitude shift
Used games continue to grow (about 1/3 of U.S. games sold)1
Clearly, consumers not tied to physical media
Flash, iPhone provide near-instant experience
Generally, far less value than console games
As broadband speeds increase, piracy will increase
Pirate downloads always grow much faster than legit downloads
February 18, 2010
Page 10
1Source: Wedbush, ‘Money for Nothing’ Interactive Industry Report, 7/09

Monetizing Games in the “Now” Era
Give consumers what they want
Instant game play of high-quality games
What they want, when they want it, where they want it
Eliminate need for pricey, specialized hardware
Focus consumer on the game, not the client device
Offer game experiences in smaller “bites”
Episodic, short-form, events, etc.
Utilize Internet to mitigate piracy, used games
Design games to require online connection
February 18, 2010
Page 11

OnLive
Game Platform for the “Now” Era
Page 12
February 18, 2010

What is OnLive?
Instant-play video games
Latest high-end titles
Instantly available for play
Available on any device
TV, PC, Mac, Phones, Tablets
No high-end hardware needed
Cloud-based gaming
Unprecedented performance
Never needs upgrading
February 18, 2010
Page 13

OnLive MicroConsole™
Page 14
World’s most powerful game system
Always state-of-the-art
Far lower cost than current consoles
Connects TV to OnLive Service
Ethernet in  HDMI out
Wireless/wired input devices
HDTV/surround sound
February 18, 2010

OnLive MicroConsole™ Interfaces
USB Source x 4,
Bluetooth,
Low-latency Wireless
1/8” L/R
Analog
Ethernet
HDMI
480p,720p, 1080i
5.1, L/R
TOSLINK
5.1, L/R
S-Video, Composite,
L/R
Component
480p, 720p, 1080i, L/R
Page 15
February 18, 2010

OnLive Architecture
February 18, 2010
Page 16

OnLive Video Compression
OnLive interactive video compression
Eliminates high latency inherent in linear video compression
QuickTime, Flash, Windows Media way too slow
Works reliably on home broadband connections
Years of testing at 1000s of locations
Bandwidth requirements
SDTV: 1.5 Mbps
>71% of US Homes have 2 Mbps or higher1
HDTV: 5 Mbps
>26% of US Homes have 5 Mbps or higher1
February 18, 2010
Page 17
1 “Improving Performance on the Internet”, Communications of the ACM, Feb. 2009

OnLive data centers: 1000-mile reach
Page 18
February 18, 2010
Key inventions assure direct routes through Internet
Provide minimal, predictable latency

OnLive Demos
February 18, 2010
Page 19

Community Built into the Platform
Community features
Friends, clans, teams, rankings, ratings,leader boards, ladders, tournaments,lobbies, matchmaking and more…
“Virtual Living Room” shared experience
Enabled by fast server-to-server network
Communications and personalization
Ubiquitous voice chat, messaging
Customized pages, video profiles
Loyalty programs, recommendations
February 18, 2010
Page 20

Games Market Ripe for OnLive
Reliant on retail/packaged goods
Only digital media without effective online distribution
Highly inefficient, static ecosystem, weak economics
Piracy and used games draining publisher and console revenue
OnLive breaks the console cycle
Removes hardware and physical media from the equation
The “Now” Era for video game systems
On demand, no upgrades, no platform transition, state-of-the-art
February 18, 2010
Page 21

OnLive Publisher Advantages
Same SKU runs on TVs, PCs, Macs
Minimal port of PC SKU
No platform transitions
No piracy, no used games
Much better margins
Telemetry
Day-by-day, user-by-user
Live Beta testing on-demand
February 18, 2010
Page 22
Announced OnLive Publisher Partners

OnLive Consumer Advantages
Any game, any time, anywhere
Instant demos—try before you buy
Unprecedented performance
Community
“Virtual Living Room”
Flexible value proposition
Demo, rent or buy
Never upgrade again
February 18, 2010
Page 23

OnLive SDK
Adapts PC SKUs to be compliant with OnLive service
Optimizes performance
Higher quality on slow Internet connections
Faster responsiveness
Instant game loading
Access to OnLive community features
Spectating, chat, leaderboards, etc.
February 18, 2010
Page 24

Economics
February 18, 2010
Page 25

Retail vs. OnLive Economics
February 18, 2010
Page 26
Retail
Potential Spend $84
$12
Piracy
Actual Spend $72
Used Games
$12
OnLive Share
MSRP $60
68% of Potential Spend
Retailer Margin
$15
Wholesale (WS) $45
$7
Returns/PP/MDF
$4
Distribution/COGS
$7
Platform Royalty
Publisher GM $27
Publisher Share
Publisher
Gross Margin
32% of Potential Spend
$27

OnLive Roadmap
February 18, 2010
Page 27

Beta Program
Started External Beta 9/09
100s of thousands of Beta sign-ups
Initial objective: compatibility testing
Positive feedback to date
Ramping new server deployments
Scaling Beta as approach launch
Launch details to be announced soon
February 18, 2010
28

Thank you.
Page 29
February 18, 2010

http://t1videogames10.blogspot.com	45
http://www.slideshare.net	28
http://t1videogames10.blogspot.co.uk	5
http://www.blogger.com	1
http://t1videogames10.blogspot.fr	1
http://t1videogames10.blogspot.mx	1

Steve Perlman OnLive DICE Presentation

by OnLive on Feb 26, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

6 Embeds 81

Statistics

Steve Perlman OnLive DICE Presentation — Presentation Transcript