Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Steve Perlman OnLive DICE Presentation

3,399 views

Published on

Slides from Steve Perlman's "Instant Gratification" presentation at D.I.C.E. on February 18, 2010.

  • Be the first to comment

Steve Perlman OnLive DICE Presentation

  1. 1. Page 1<br />February 18, 2010<br />
  2. 2. Instant Gratification<br />Video Games in the “Now” Era<br />Steve Perlman<br />Founder & CEO, OnLive<br />Page 2<br />February 18, 2010<br />
  3. 3. Welcome to the “Now” Era<br />All media<br />what you want <br />when you want it<br />where you want it<br />instantly delivered…NOW.<br />February 18, 2010<br />Page 3<br />
  4. 4. We’re Already There<br />“Real-time entertainment traffic has exploded.”<br />“26.6 percent of total traffic in 2009, up from 12.6 percent in 2008.”<br />“Massive shift in behavior from … ‘download now, use later’ content acquisition to an on-demand mentality.”<br />“Bytes are consumed as they arrive.” <br />“Almost two-thirds of all Internet traffic in 2009 is enjoyed on arrival.”1<br />February 18, 2010<br />Page 4<br />1Source: SandvineBroadband Phenomena Report, 10/26/09 <br />
  5. 5. Music, Video/Movies, then Games<br />Music became the first “Now” media<br />Industry was unprepared: Devastated the business<br />Videos/Movies in the midst of transition to “Now”<br />Industry struggling to redefine itself<br />So far, losing ground and no clear path<br />Videogames just starting transition to “Now”<br />Starting to feel the effects<br />February 18, 2010<br />Page 5<br />
  6. 6. Old Think: a Device Defines Media<br />Physical device tied to the experience<br />“What CD is playing?”<br />“We’re watching a DVD tonight.”<br />“Improve your grades or no more XBox!”<br />February 18, 2010<br />Page 6<br />
  7. 7. New Think: Experience Defines Media<br />Music<br />“It’s a track from a new Paramore-like band.”<br />Could be from Pandora, iTunes, Amazon, pirate sites, etc.<br />Unlikely from a CD<br />Video/Movies<br />“Did you see the new Tina Fey Sarah Palin skit?”<br />Could be from YouTube, Hulu, nbc.com, pirate sites, etc.<br />Unlikely watched on live TV<br />February 18, 2010<br />Page 7<br />
  8. 8. Media of the Moment<br />Music, video/movies (“linear media”)<br />Physical media in rapid decline<br />Interim growth in rentals (Netflix, redbox)<br />Downloaded media past its peak<br />Even BitTorrent on the decline<br />Streaming media now majority of all Internet traffic<br />YouTube, Hulu, Pandora, etc.<br />February 18, 2010<br />Page 8<br />
  9. 9. Online Linear Media Hard to Monetize<br />Online linear media a loss-leader business<br />iTunes/App Store “a bit over break even”1<br />Apple makes its money selling hardware and software<br />Netflix charges zero for online video<br />Netflix makes its money mailing DVDs<br />YouTube continues to lose money<br />Google makes its money selling search ads<br />Pirated linear media widely available<br />YouTube infringement a game of “Whac-A-Mole”<br />Hard to compete with free<br />February 18, 2010<br />Page 9<br />1Source: Apple CFO Peter Oppenheimer, 1/26/10<br />
  10. 10. What about “Now” Games?<br />Videogames a different beast than linear media<br />Large file needed before game can start<br />Tied to specific playback devices<br />Online games can’t be pirated<br />Still, videogames subject to consumer attitude shift<br />Used games continue to grow (about 1/3 of U.S. games sold)1<br />Clearly, consumers not tied to physical media<br />Flash, iPhone provide near-instant experience<br />Generally, far less value than console games<br />As broadband speeds increase, piracy will increase<br />Pirate downloads always grow much faster than legit downloads<br />February 18, 2010<br />Page 10<br />1Source: Wedbush, ‘Money for Nothing’ Interactive Industry Report, 7/09<br />
  11. 11. Monetizing Games in the “Now” Era<br />Give consumers what they want<br />Instant game play of high-quality games<br />What they want, when they want it, where they want it<br />Eliminate need for pricey, specialized hardware<br />Focus consumer on the game, not the client device<br />Offer game experiences in smaller “bites”<br />Episodic, short-form, events, etc.<br />Utilize Internet to mitigate piracy, used games<br />Design games to require online connection<br />February 18, 2010<br />Page 11<br />
  12. 12. OnLive<br />Game Platform for the “Now” Era<br />Page 12<br />February 18, 2010<br />
  13. 13. What is OnLive?<br />Instant-play video games<br />Latest high-end titles<br />Instantly available for play<br />Available on any device<br />TV, PC, Mac, Phones, Tablets<br />No high-end hardware needed<br />Cloud-based gaming<br />Unprecedented performance<br />Never needs upgrading<br />February 18, 2010<br />Page 13<br />
  14. 14. OnLive MicroConsole™<br />Page 14<br />World’s most powerful game system<br />Always state-of-the-art<br />Far lower cost than current consoles<br />Connects TV to OnLive Service<br />Ethernet in  HDMI out<br />Wireless/wired input devices<br />HDTV/surround sound<br />February 18, 2010<br />
  15. 15. OnLive MicroConsole™ Interfaces<br />USB Source x 4,<br />Bluetooth,<br />Low-latency Wireless<br />1/8” L/R<br />Analog<br />Ethernet<br />HDMI<br />480p,720p, 1080i<br />5.1, L/R<br />TOSLINK<br />5.1, L/R<br />S-Video, Composite,<br />L/R<br />Component<br />480p, 720p, 1080i, L/R<br />Page 15<br />February 18, 2010<br />
  16. 16. OnLive Architecture<br />February 18, 2010<br />Page 16<br />
  17. 17. OnLive Video Compression<br />OnLive interactive video compression<br />Eliminates high latency inherent in linear video compression<br />QuickTime, Flash, Windows Media way too slow<br />Works reliably on home broadband connections<br />Years of testing at 1000s of locations<br />Bandwidth requirements<br />SDTV: 1.5 Mbps<br />>71% of US Homes have 2 Mbps or higher1<br />HDTV: 5 Mbps<br />>26% of US Homes have 5 Mbps or higher1<br />February 18, 2010<br />Page 17<br />1 “Improving Performance on the Internet”, Communications of the ACM, Feb. 2009<br />
  18. 18. OnLive data centers: 1000-mile reach<br />Page 18<br />February 18, 2010<br />Key inventions assure direct routes through Internet<br />Provide minimal, predictable latency<br />
  19. 19. OnLive Demos<br />February 18, 2010<br />Page 19<br />
  20. 20. Community Built into the Platform<br />Community features<br />Friends, clans, teams, rankings, ratings,leader boards, ladders, tournaments,lobbies, matchmaking and more…<br />“Virtual Living Room” shared experience<br />Enabled by fast server-to-server network<br />Communications and personalization<br />Ubiquitous voice chat, messaging <br />Customized pages, video profiles<br />Loyalty programs, recommendations<br />February 18, 2010<br />Page 20<br />
  21. 21. Games Market Ripe for OnLive<br />Reliant on retail/packaged goods<br />Only digital media without effective online distribution<br />Highly inefficient, static ecosystem, weak economics<br />Piracy and used games draining publisher and console revenue<br />OnLive breaks the console cycle<br />Removes hardware and physical media from the equation<br />The “Now” Era for video game systems<br />On demand, no upgrades, no platform transition, state-of-the-art<br />February 18, 2010<br />Page 21<br />
  22. 22. OnLive Publisher Advantages<br />Same SKU runs on TVs, PCs, Macs<br />Minimal port of PC SKU<br />No platform transitions<br />No piracy, no used games<br />Much better margins <br />Telemetry<br />Day-by-day, user-by-user<br />Live Beta testing on-demand<br />February 18, 2010<br />Page 22<br />Announced OnLive Publisher Partners<br />
  23. 23. OnLive Consumer Advantages<br />Any game, any time, anywhere<br />Instant demos—try before you buy<br />Unprecedented performance<br />Community<br />“Virtual Living Room”<br />Flexible value proposition<br />Demo, rent or buy<br />Never upgrade again<br />February 18, 2010<br />Page 23<br />
  24. 24. OnLive SDK<br />Adapts PC SKUs to be compliant with OnLive service<br />Optimizes performance<br />Higher quality on slow Internet connections<br />Faster responsiveness<br />Instant game loading<br />Access to OnLive community features<br />Spectating, chat, leaderboards, etc.<br />February 18, 2010<br />Page 24<br />
  25. 25. Economics<br />February 18, 2010<br />Page 25<br />
  26. 26. Retail vs. OnLive Economics<br />February 18, 2010<br />Page 26<br />Retail<br />Potential Spend $84<br />$12<br />Piracy<br />Actual Spend $72<br />Used Games<br />$12<br />OnLive Share<br />MSRP $60<br />68% of Potential Spend<br />Retailer Margin<br />$15<br />Wholesale (WS) $45<br />$7<br />Returns/PP/MDF<br />$4<br />Distribution/COGS<br />$7<br />Platform Royalty<br />Publisher GM $27<br />Publisher Share<br />Publisher<br />Gross Margin<br />32% of Potential Spend<br />$27<br />
  27. 27. OnLive Roadmap<br />February 18, 2010<br />Page 27<br />
  28. 28. Beta Program<br />Started External Beta 9/09<br />100s of thousands of Beta sign-ups<br />Initial objective: compatibility testing<br />Positive feedback to date <br />Ramping new server deployments<br />Scaling Beta as approach launch<br />Launch details to be announced soon<br />February 18, 2010<br />28<br />
  29. 29. Thank you.<br />Page 29<br />February 18, 2010<br />

×