Venture capitalists have placed an undisclosed bet on Palo Alto, Calif., startup OnLive Inc.'s proposition that via cloud computing technology it can beat the likes of Nintendo Co. Ltd. at its own game.
OnLive has won the support of new investors AT&T Media Holdings Inc and Lauder Partners, according to Reuters. Time Warner Inc. (NYSE:TWX) unit Warner Bros., Autodesk and Maverick Capital, who were earlier investors, also participated in the Series C round. Although the size of the round was undisclosed, industry Web site Gamasutra reported it was the company's largest funding yet. In prior rounds, OnLive reportedly raised $16.5 million.
OnLive is the latest creation of Steve Perlman, the entrepreneur who promised to bring the Internet to TVs everywhere over a decade ago via WebTV Networks Inc. OnLive operated in stealth mode for seven years before revealing its self-proclaimed revolutionary gaming technology in March at the annual Game Developers Conference in San Francisco.
OnLive reportedly has developed technology to stream high-definition video games via servers over high-speed Internet connections -- hence the reference to cloud computing. The promise is to stream games akin to "Madden Football," not simple puzzle games like "Tetris," which are already available via various online services. The idea is similar to cloud computing or streaming media businesses such as YouTube, Hulu and other video services that transmit videos from a central server to any personal computer.
For the consumer, OnLive's technology promises to negate the need for expensive PCs with advanced video cards or specialized consoles like Microsoft Corp.'s (NASDAQ:MSFT) Xbox 360, Nintendo Co. Ltd.'s Wii or Sony Corp.'s (NYSE:SNE) PlayStation 3. For game publishers, the technology could help eliminate piracy, and the cost of producing millions of discs.
At the time of the March announcement, Perlman wowed the media -- both mainstream media like The Wall Street Journal and also alternative media like blogs, but their readers were far more skeptical of OnLive's promises. - Matthew Wurtzel
See earlier story about OnLive from Dealscape
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