Good points, Chase -- totally valid and worrisome. I signed up for OnLive for free on my Mac and demoed a few games, but my Net connection dropped during one demo and I was hosed.

Not to mention that it was pretty laggy. No bueno.

If anyone's read my rantings on Twitter or here, you'll know OnLive is something I could never get on board with.
I'd actually go as far as abandoning mainstream gaming if OnLive ever became the standard. If I can't run a game from physical media that's next to me, whether that be the HDD in my PC or the discs on my shelf, I'm out.
The way I see it, OnLive is essentially DRM, and the most draconian of them all. I actually can't fathom why people get upset at Ubisoft's wretched DRM, but then start falling over themselves to praise OnLive. Besides the fact that it's a downgraded experience, you're playing with fire when you hand them your money. No thanks!

I agree. Game prices for OnLive need to be significantly cheaper. If I understand correctly, titles will launch at the same price as their retail counterparts: $50-$60 a pop. With all the ownership disadvantages of this completely digital model, I want a price cut.

Also, you lose out entirely on modding, which is a big plus that PC gaming has over all the other platforms.

A good friend of mine works at OnLive and has granted me the privilege of what they call a "Golden Ticket," which allows me to download all of their games for free until January 17th. He even threw in a brand new micro console, which is pretty neat (if the 360 and PS3 controller had a baby, it would be the OnLive controller). Despite all of this, I just can't get into the service due to lag and visual quality, all of which depend on the speed of your broadband connection. I presume that this will get better over time as broadband speeds increase (many games have a video compression of around 5Mbps), but like many of you, I prefer the likes of a physical (or even digital) copy. From what I hear, the service also plans to compete with Netflix by offering Blu-ray movies, as made evident by the media controls at the bottom of the controller.

Jason: It's not the speed of your broadband that matters too much with services like OnLive, its latency. Sure, a slow internet connection will mess it up, but in the end the service is restricted by the speed of light.

Think of it like a pipe: the bandwidth is the thickness of the pipe, i.e. how much water can pass through.
The latency is the distance from one end of the pipe to the other. The longer it is, the longer it'll take for water to flow through. It's why online games that are UK vs. USA, for example, are laggy, even if both players have a super fast broadband. The distance is just too far.

In short, OnLive will need to keep building more and more data centres to reduce the lag in areas. I'm not saying it's not possible, but it may be prohibitively expensive to do in areas that have low populations or a small amount of customers.

On that note, I feel the whole model is flawed and can, at best, be an addition to a great service like Steam, rather than the "be all end all" service that OnLive are so desperately hoping to be.

I agree with everything said and I'm very worried about OnLive services becoming the standard for major publishers. Having tried the trial service though I was very impressed with how smoothly it ran on my 1.5Mbps DSL across a wireless network. Granted it looked chunk-a-licious but still worked. The ability to view other's games was neat as well. I wouldn't ever buy the service on a per game basis, but if they make the monthly all-access pass with most of the titles I can see it as a good rental replacement.

What I hate is the pricing structure.

You can pay X for a particular game, which you get for at least 3 years maybe more depending on if other people are playing and its worth renewing the license.

Or you can pay $10 bucks a month for UNLIMITED ACCESS to...errr...some of the games. And still have to pay the above fee.

Or you can rent them, and....

See? That's garbage!

@Chris: Latency isn't the issue in my case. My latency is usually around 20ms with no packet loss according to my friend who works there. yet I still experience mouse lag, framerate jerkiness and other hiccups, even when playing something as simple (not to mention single player) as Braid. Also, faster broadband speeds means less video compression, equaling better visual quality. You're basically controlling another system remotely, and higher broadband speeds would definitely benefit that. It's also worth noting that a lot of the games in their library are considered "beta", meaning they might have some issues they're still ironing out.

It's interesting technology, but I too don't want to see OnLive become a standard. I'm not really worried that it will be, however, seeing as you can still go out and buy movies despite Netflix and the like.

@Andrew: There is no monthly fee anymore, just the price of the PlayPass: Usually $39.99 for unlimited, $5.99 for 3 days or $8.99 for 5 - too pricey! I agree that the pricing needs readjustment.

This article hightlights three glaring issues I have with cloud computing in general: the need for a constant internet connection, lack of physical copies, and the possibility the company will fold. The latter is constantly in the forefront of my mind. It's true; if the hosting company falls to the wayside, so do your games. And I'm sure that would burn a lot. At the end of the day, it is a great idea, just one I do not trust.  

You are way too hard on the service. You can rent or buy PC games with absolutely no monthly fees. Not sure if you will like the new Madden? Just rent it for 3 days. Feel like playing only a few matches in Unreal Tournament? Rent it for 5 days. Want to have you games and saves follow you wherever you go? Buy the game and wherever you are, on whatever computer, your game and saves will be waiting for you.

No download times either. You click and start playing. I also need to point out that I was in the beta for OnLive and have been using it for over 6 months. Not once has it ever cut out on me. I have never lost a game because of a dropped connection. The service has never dropped or even stuttered. It is a solid as a rock.

I used to complain about the control lag and cideo quality. This has also been greatly improved, especially with the home console. Everything looks smooth and great, although not quite as good as you would get playing it on a dedicated machine. Also, not owning it is just part of the compromise. If you want to play the biggest and most graphically intense games on a netbook your going to have to take the good with the bad.

The worst thing is there are also a ton of upsides to this system.

If I can take just a controller and a micro console with me on a plane, and when I get to my destination, plug it in and have all my games with me, that would be absolutely incredible. 

And I don't know the specifics of this technology, but if I were able to play a game on my TV, save, turn it off, then pick up where I left off using my iPod Touch, that could be implemented in many unique and interesting ways.

But the pros don't nearly outweigh the cons in my opinion. This is an entirely different way to look at playing games - or, looking at cloud computing in general, an entirely different way to look at technology altogether - but it's scary to us because it's so very different. 

I'll bet if we'd all been brought up on cloud computing and someone came up with a newfangled idea such as hard drives, we'd be just as apprehensive - though for the opposite reasons.

@Ed You make some great points. As a demo/rental service, OnLive has an amazing amount of potential. And it does have a ton of upside, like I mentioned above.

Like I said in my article, I wish OnLive and anyone who uses the service the absolute best, but I'm not the type of person who can accept the trade-offs OnLive requires. I've been raised on gaming a certain way, and that's the way I want to continue gaming in the future.

Today's (Friday Jan 7) Dilbert strip suits this article well.

http://news.yahoo.com/comics/dilbert

@ Chase.

For me, I rarely, if ever, finish a game and decide to play it again somewhere down the line. A few exceptions are Super Mario World (beaten 3 times), Super Mario 64 (beaten 17 times), and a few NES games. For 26 years, I have played a game and put it back on a shelf. This is why no owning it does not bother me as much as it may others. I wouldn't play it again anyway.

I also already have a very powerful PC that can easily run any game without the help of Onlive, but still I find OnLive very attractive. I just love how I can start a game up on my work computer. Boot it back up on my PC at home, and play a bit more at my fathers house using the console. You can just log into your account on someone elses console if you can't bring yours with you.

It is like bringing your entire video game library with you wherever you go. The downside right now is that the selection is garbage. They really do not have a healthy selection of games. I have faith that will change soon enough. I also just wanted to say that OnLive will not be closing their doors anytime soon. They have received and are still receiving a ton of funding. They are going to be continuing for a long, long time.

They already have plans to release an iPad version. And have just announced that OnLive will be shipping inside some HDTV's this year. They will begin shipping it in as many TV's, cable boxes, PC's etc as they can by the end of the year. And they are already making a healthy profit according to their blog.

If I try to put myself in your shoes, I can completely understand wanting to own your games. I get it, believe me. However, I don't think the larger gaming audience feels the same way. Just look at how well EB Games is doing. Most gamers love to part with their gamesm especially when money is involved haha.

@Ed Funny, you argue a point that I just wrote an entire article around.

What worries me most about OnLive and digital downloads and all this new stuff is mostly from an archival standpoint. Sure, you and I may be finished with a game once we've beaten it once. We may even sell it back to Gamestop or another resale outlet.

But the reason Gamestop even exists is because there is a demand to dig up and play these old games again. There are people out there who want to experience these things, maybe for the three hundredth time, maybe for the first time.

If Nintendo went bankrupt today, NES cartridges would still be out there and still be usable. Anyone can go onto eBay or Amazon or a used game store, purchase an NES, Super Mario Bros. and enjoy the exact same experience that you and I had when we played it.

But for something like OnLive or an MMO, it's gone for good. No one can play it in the same way. No one can have those same experiences. Even if OnLive lives and thrives, there's a chance they'll drop some games from their library, which will create the same problem as if OnLive folded.

I don't know about you, but if/when I have kids, I want them to be able to see how their dad played games.

And it's certainly not just my opinion: http://nationalvideogamearchive.org/

These are all great points, the most critical one is the dependancy of an internet connection. Where I live my internet connection gets mood swings, and usually whenever my internet has a problem then I switch immediatly to my PS3 to waste some time. Having OnLive will mean that if my internet connection goes down I will be stuck with socializing with people, that shouldn't happen.