Storm cloud: the future is not here yet

Monday, 17 September 2012 16:47 GMT By Robert Levitan

Speaking after the evaporation of OnLive last month, Robert Levitan, CEO of Pando Networks, warns that cloud gaming has another 3-5 years to wait before truly hitting its stride.

“I’m a fan of what OnLive and Gaikai set out to accomplish. I am confident their vision of streaming games will happen – I’m just not sure when.”

As I’ve stated before, “OnLive may be the future, but the future is not here today.”

I love developing products to help invent the future; this is probably the most exciting part about being a technology entrepreneur. For 30 years I’ve been privileged to build new businesses and work with new technologies. So naturally, I’m a fan of what OnLive and Gaikai set out to accomplish. I am confident their vision of streaming games will happen – I’m just not sure when.

Almost a year ago in a blogpost on Gamasutra I discussed the challenges of scaling game streaming. I specifically noted the costs involved, as well as usability concerns (such as latency). The very recent news of OnLive burning through millions of dollars a month and being put into ABC has illustrated these issues weren’t (as some of the commenters suggested) easy to overcome.

Furthermore, the news of Gaikai’s sale to Sony in July also proves that there’s more work to be done to make this industry viable. Gaikai streaming has initially proved useful for demos and trailers, but there is still a long way to go to make it cost-effective to deliver a high quality, uninterrupted gaming experience. I can imagine some of the reasons why Sony decided to purchase the company – but Sony will have to invest several years and many millions of dollars to further develop Gaikai’s technology into a viable business unit.

Just as the investors in OnLive were not prepared to continue to fund the R&D needed to continue the company as it was, I am fairly certain the venture capital investors in Gaikai were facing the very same issue.The entire games industry should continue to root for OnLive and Gaikai to succeed, because streaming games will be good for gamers and for publishers alike. However, as I saw first-hand in the first dot-com bubble, we’ve got to be realistic.

Entrepreneurs such as Steve Perlman and David Perry are doing their job when they hype up the technology – any good CEO has got to be an evangelist for his company, and an entrepreneur’s task to is partly to sell the future. I remember when OnLive was first announced, I remember when they first demoed it; there was real adrenaline at those trade show booths and demos. In reality, we’re looking at another three to five years at least before our networks and technologies are up to the task.

A quote from Marc Benioff, the CEO of Salesforce, applies well to the plight of OnLive and the streaming games industry:

“In business, we say that people overestimate what you can do in a year and underestimate what you can do in a decade.”

Robert Levitan is the CEO of Pando Networks, a content delivery platform that delivers many famous free-to-play games such as League of Legends and Lord of the Rings Online. Prior to founding Pando, he co-founded iVillage, and YearLook Enterprises.