Steve Perlman OnLive DICE Presentation
7 likes811 views
This document discusses the transition of media like music, video, and games to an "instant" model of consumption through streaming rather than physical formats or downloads. It introduces OnLive as a cloud-based gaming platform that allows instant play of high-end video games on any device without needing specialized hardware. OnLive aims to address issues like piracy and used games by making all games instantly available to play through an online connection. The document outlines OnLive's technology and business model, arguing it can provide a better experience for consumers and higher revenue shares for publishers compared to the traditional retail model.
Steve Perlman OnLive DICE Presentation
- 1. Page 1February 18, 2010
- 2. Instant GratificationVideo Games in the “Now” EraSteve PerlmanFounder & CEO, OnLivePage 2February 18, 2010
- 3. Welcome to the “Now” EraAll mediawhat you want when you want itwhere you want itinstantly delivered…NOW.February 18, 2010Page 3
- 4. 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.”1February 18, 2010Page 41Source: SandvineBroadband Phenomena Report, 10/26/09
- 5. Music, Video/Movies, then GamesMusic became the first “Now” mediaIndustry was unprepared: Devastated the businessVideos/Movies in the midst of transition to “Now”Industry struggling to redefine itselfSo far, losing ground and no clear pathVideogames just starting transition to “Now”Starting to feel the effectsFebruary 18, 2010Page 5
- 6. Old Think: a Device Defines MediaPhysical device tied to the experience“What CD is playing?”“We’re watching a DVD tonight.”“Improve your grades or no more XBox!”February 18, 2010Page 6
- 7. New Think: Experience Defines MediaMusic“It’s a track from a new Paramore-like band.”Could be from Pandora, iTunes, Amazon, pirate sites, etc.Unlikely from a CDVideo/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 TVFebruary 18, 2010Page 7
- 8. Media of the MomentMusic, video/movies (“linear media”)Physical media in rapid declineInterim growth in rentals (Netflix, redbox)Downloaded media past its peakEven BitTorrent on the declineStreaming media now majority of all Internet trafficYouTube, Hulu, Pandora, etc.February 18, 2010Page 8
- 9. Online Linear Media Hard to MonetizeOnline linear media a loss-leader businessiTunes/App Store “a bit over break even”1Apple makes its money selling hardware and softwareNetflix charges zero for online videoNetflix makes its money mailing DVDsYouTube continues to lose moneyGoogle makes its money selling search adsPirated linear media widely availableYouTube infringement a game of “Whac-A-Mole”Hard to compete with freeFebruary 18, 2010Page 91Source: Apple CFO Peter Oppenheimer, 1/26/10
- 10. What about “Now” Games?Videogames a different beast than linear mediaLarge file needed before game can startTied to specific playback devicesOnline games can’t be piratedStill, videogames subject to consumer attitude shiftUsed games continue to grow (about 1/3 of U.S. games sold)1Clearly, consumers not tied to physical mediaFlash, iPhone provide near-instant experienceGenerally, far less value than console gamesAs broadband speeds increase, piracy will increasePirate downloads always grow much faster than legit downloadsFebruary 18, 2010Page 101Source: Wedbush, ‘Money for Nothing’ Interactive Industry Report, 7/09
- 11. Monetizing Games in the “Now” EraGive consumers what they wantInstant game play of high-quality gamesWhat they want, when they want it, where they want itEliminate need for pricey, specialized hardwareFocus consumer on the game, not the client deviceOffer game experiences in smaller “bites”Episodic, short-form, events, etc.Utilize Internet to mitigate piracy, used gamesDesign games to require online connectionFebruary 18, 2010Page 11
- 12. OnLiveGame Platform for the “Now” EraPage 12February 18, 2010
- 13. What is OnLive?Instant-play video gamesLatest high-end titlesInstantly available for playAvailable on any deviceTV, PC, Mac, Phones, TabletsNo high-end hardware neededCloud-based gamingUnprecedented performanceNever needs upgradingFebruary 18, 2010Page 13
- 14. OnLive MicroConsole™Page 14World’s most powerful game systemAlways state-of-the-artFar lower cost than current consolesConnects TV to OnLive ServiceEthernet in HDMI outWireless/wired input devicesHDTV/surround soundFebruary 18, 2010
- 15. OnLive MicroConsole™ InterfacesUSB Source x 4,Bluetooth,Low-latency Wireless1/8” L/RAnalogEthernetHDMI480p,720p, 1080i5.1, L/RTOSLINK5.1, L/RS-Video, Composite,L/RComponent480p, 720p, 1080i, L/RPage 15February 18, 2010
- 16. OnLive ArchitectureFebruary 18, 2010Page 16
- 17. OnLive Video CompressionOnLive interactive video compressionEliminates high latency inherent in linear video compressionQuickTime, Flash, Windows Media way too slowWorks reliably on home broadband connectionsYears of testing at 1000s of locationsBandwidth requirementsSDTV: 1.5 Mbps>71% of US Homes have 2 Mbps or higher1HDTV: 5 Mbps>26% of US Homes have 5 Mbps or higher1February 18, 2010Page 171 “Improving Performance on the Internet”, Communications of the ACM, Feb. 2009
- 18. OnLive data centers: 1000-mile reachPage 18February 18, 2010Key inventions assure direct routes through InternetProvide minimal, predictable latency
- 19. OnLive DemosFebruary 18, 2010Page 19
- 20. Community Built into the PlatformCommunity featuresFriends, clans, teams, rankings, ratings,leader boards, ladders, tournaments,lobbies, matchmaking and more…“Virtual Living Room” shared experienceEnabled by fast server-to-server networkCommunications and personalizationUbiquitous voice chat, messaging Customized pages, video profilesLoyalty programs, recommendationsFebruary 18, 2010Page 20
- 21. Games Market Ripe for OnLiveReliant on retail/packaged goodsOnly digital media without effective online distributionHighly inefficient, static ecosystem, weak economicsPiracy and used games draining publisher and console revenueOnLive breaks the console cycleRemoves hardware and physical media from the equationThe “Now” Era for video game systemsOn demand, no upgrades, no platform transition, state-of-the-artFebruary 18, 2010Page 21
- 22. OnLive Publisher AdvantagesSame SKU runs on TVs, PCs, MacsMinimal port of PC SKUNo platform transitionsNo piracy, no used gamesMuch better margins TelemetryDay-by-day, user-by-userLive Beta testing on-demandFebruary 18, 2010Page 22Announced OnLive Publisher Partners
- 23. OnLive Consumer AdvantagesAny game, any time, anywhereInstant demos—try before you buyUnprecedented performanceCommunity“Virtual Living Room”Flexible value propositionDemo, rent or buyNever upgrade againFebruary 18, 2010Page 23
- 24. OnLive SDKAdapts PC SKUs to be compliant with OnLive serviceOptimizes performanceHigher quality on slow Internet connectionsFaster responsivenessInstant game loadingAccess to OnLive community featuresSpectating, chat, leaderboards, etc.February 18, 2010Page 24
- 26. Retail vs. OnLive EconomicsFebruary 18, 2010Page 26RetailPotential Spend $84$12PiracyActual Spend $72Used Games$12OnLive ShareMSRP $6068% of Potential SpendRetailer Margin$15Wholesale (WS) $45$7Returns/PP/MDF$4Distribution/COGS$7Platform RoyaltyPublisher GM $27Publisher SharePublisherGross Margin32% of Potential Spend$27
- 27. OnLive RoadmapFebruary 18, 2010Page 27
- 28. Beta ProgramStarted External Beta 9/09100s of thousands of Beta sign-upsInitial objective: compatibility testingPositive feedback to date Ramping new server deploymentsScaling Beta as approach launchLaunch details to be announced soonFebruary 18, 201028
- 29. Thank you.Page 29February 18, 2010