Since the announcement that OnLive’s gaming services are to shut down at the end of April, there has been understandable upset from within the SL community (and from some OpenSim users as well, given Firestorm on SL Go can be used to access OpenSim grids).
Following the news, there were a plethora of requests made to Sony on social media that they continue to provision SL Go as a service and an on-line petition was started in the hope of achieving the same end. Unfortunately, these requests and the petition overlook one thing.
As OnLive made clear in their statements on the future of their gaming services, and as I attempted to point to in my original article on this news, Sony didn’t actually acquire OnLive’s services. They took the opportunity to purchase the IP and 140 patents the company held relating to cloud gaming and other “assets” (which would most likely appear to be the additional 135 patents related to cloud gaming OnLive had pending), without actually buying OnLive’s services. So technically, there’s nothing for them to “continue” to offer SL Go users.
What’s more, as Dennis Harper, the SL Go Product Manager at OnLive, made clear in these pages, taking the IP and patents is akin to taking the heart and lungs of OnLive’s services; without them, a service like SL Go cannot easily be continued by someone else. At least, not without money changing hands and someone having the infrastructure by which they can deliver the service.
So, are Sony the Big Evil for doing this? did they gobble OnLive’s patents to stifle competition? Is this, as was dramatically stated in some quarters as the news broke, some kind of first shot in a forthcoming “VR battle” between corporations? Well …. No.
The truth is that OnLive put itself on the market.
That this is the case can be found in another post on the company’s blog entitled, A Bright Future for Cloud Gaming At Sony. As well as containing useful historical information, the post underlines the specific issues the company’s management had been forced to face:
Since 2012, the company has dramatically improved its technology and business models such that all of its 5 services are gross margin positive, ranging from 43% to 86% margin … The company also was able to achieve conversion rates from free trial to paid of between 64-78% for its services. Despite these positive metrics, the lifetime value (TLV) of a subscriber was still less than the cost to acquire subscribers (CPA), but they were converging. While we knew we could not get to break-even on our own, we believed that there were many large companies who would be able to get there.
In other words, in order to get to a break-even point, OnLive’s management felt the company needed to be offered-up for acquisition, albeit hopefully as a going concern.
Perhaps the first fully public hint that this was the case may have actually come in a blog post issued a couple of days ahead of Sony deal being announced. Of course, by the time the post appeared, the deal was undoubtedly cut and dried; nevertheless, The 2015 Case for Cloud Gaming and OnLive, could almost read as the company laying out its stall in order to attract a suitable investor / acquirer.
Unfortunately, despite all the positive indicators they could show, the Cloud Gaming hype cycle had bitten hard; no-one OnLive approached was willing to take them on as a going concern. Not even the fact that Nvidia had indicated the worst was behind the sector, and that OnLive itself was helping to push the technology up the Slope of Enlightenment, could encourage anyone to acquire the company outright. Thus the deal with Sony for the IP and patents sale was agreed.
Why didn’t Sony acquire OnLive as a whole? Because they already have their own cloud gaming service, PlayStation Now, which came out of a 12-month beta programme in January 2015. The OnLive patents understandably offer more value when put to work within PlayStation Now than Sony would be liable to find in buying-out OnLive as a whole, so they didn’t bother.
Interestingly, and entirely coincidentally, PlayStation Now has its own link to Second Life. It is built on the back of Gaikai, a Japanese streaming game provider acquired by Sony in 2012. Gaikai is the company Linden Lab worked with in an attempt to provide the means of streaming Second Life to web browser, a service which underwent a limited beta run in 2010, as the video below demonstrates.
But to draw things to a close; however “unjust” it might appear, all of this means that SL Go cannot really be saved. The patents which enabled it to function are gone, and the services upon which it runs are closing down. The only real options are for someone else to come along and offer a similar service of their own, or for LL to work with a partner to provide such as services, as they once attempted with Gaikai.
Both would seem unlikely; in the case of the former, SL perhaps represents too small a community of users to be worth catering for (and remember, SL Go came about in part as a result of rather unique circumstances). And while I tend to lean towards LL having an interest in cloud-based streaming, I don’t think that interest is with regards to Second Life, so I can’t see them getting directly involved in trying to provide a streaming solution for SL access. If nothing else, they’ve likely got enough on their plate already.
SL Go was a great and brave experiment. It is a shame that its days are drawing to a close; but OnLive, through their services as a whole, have proven what might be achieved. In that respect, they are right when they proclaim that cloud gaming has a bright future.
Inara Pey: Living in a Modemworld 