OnLive Granted Patent For Cloud Gaming Technology

Streaming video game service OnLive has been granted what is being seen as a key patent as the spectre of “cloud based” gaming – meaning, a system where all of the data is stored on a remote server, including the files to run the game itself – continues to grow.

As reported by VentureBeat, OnLive’s CEO Steve Perlman has been granted a patent that describes an “(a)pparatus for video gaming includes a box having a slot with an interface that connects to a game card providing a platform to run a software video game.” Mr. Perlman applied for the patent in 2002, back when such a technology was little more than a pipe dream and wireless connections were in their infancy on a consumer level. Though the patent specifically claims that it connects “through a box” (the OnLive console would be said “box”), the patent is written in an intentionally vague and wide-reaching manner:

In the following description numerous specific details are set forth, such as frequencies, circuits, configurations, etc., in order to provide a thorough understanding of the present invention. However, persons having ordinary skill in the satellite, communication and video gaming arts will appreciate that these specific details may not be needed to practice the present invention. It should also be understood that the basic architecture and concepts disclosed can be extended to a variety of different implementations and applications. Therefore, the following description should not be considered as limiting the scope of the invention.

Rivals of OnLive are credited by VentureBeat as Gaikai and Otoy. There is question as to how this could affect them – they both provide streaming games, though neither company uses a dedicated console for their product in the way that OnLive does. Mr. Perlman has declined to state how he will handle his rivals with his patent in hand, though he’s stated that he’s willing to work with other companies and has never filed a patent lawsuit. It should be noted that Gaikai and Otoy feature streaming games as part of a larger service – Gaikai’s more concerned about advertising, while Otoy is a more general streaming service provider – whereas to OnLive, streaming high-end games *is* their business model. There’s no telling if those two companies even want to stick around with streaming games, considering how increasingly entrenched OnLive is in that area.

Market analyst Richard Doherty of Envisioneering Group was very high on the impact of this patent:

It is a landmark patent. Perlman’s patent is based on real-world, not speculation as so many are. And because “gaming” is both broad and popular – it will likely see many rich media social gaming companies and services wanting to license it to find any differentiation.

I’ll go ahead and borrow a quote from Vice President Joe Biden in describing how this is: this is a big fucking deal.

As cloud-based services become more popular as broadband becomes more prevalent, companies that have established themselves early will have an advantage. OnLive, by starting this ball rolling way back before anyone even thought to, has made themselves the only legitimate option when it comes to cloud-based gaming. Now, they’re the only ones that can legitimately use this kind of technology without running afoul of a possible patent lawsuit. The only potential concern would be if OnLive became huge; if that happened, there’s the remote possibility of antitrust issues (as OnLive could be a monopoly in that field), but that’s a long way off.’

With as quickly as the company has grown both from a business standpoint (its valuation was $1.1bn as of this past summer) and a technology standpoint (it’s changed leaps and bounds since the time when the company first went into beta), it’s probably time we start taking this technology and this company as seriously as we take Netflix’s streaming service.

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