Games to be delivered via internet to TVs, phones, tablets

Streaming movies directly to Internet-enabled TV sets has already become familiar, but manufacturers are about to begin adding top-tier videogames to their bag of tricks — which could prove to be a fundamental shift in the vidgame industry.

OnLive, a cloud-based game streaming service that has been making headlines for the past few months, announced Tuesday that it has struck a deal with Vizio that would put the service on all 2011 model HD TVs and Blu-ray players as well as forthcoming smart phones and tablets from the company.

OnLive has been operating in beta mode for several months, but only went into widespread release in December. The company offers a pair of business models, allowing gamers to buy top titles a la carte or sign up for an “all you can eat” service of slightly older titles in a model very similar to the Netflix Instant Watch program.

Tuesday’s announcement, though, could put pressure on traditional vidgame console makers, as users will not have to purchase an expensive system like the Xbox 360 or PlayStation 3 to play on their TVs.

“For the first time in the history of videogames, consumers will be able to enjoy premium videogames directly on a TV, no console or computer needed,” said OnLive founder and CEO Steve Perlman.

OnLive isn’t likely to have the market to itself, though. Smart TVs will be one of the focuses of this year’s CES — and Wednesday is expected to bring a flurry of announcements about embedded services on next year’s model — including Hulu integration in one or more brands.

That will likely include other game-streaming companies as well. Oberon Media, which specializes in casual games (a different market segment than OnLive’s), announced Tuesday it has secured the exclusive rights to bring the classic game “Tetris” to connected devices, including TVs.

The company’s partners are expected to be revealed Wednesday.

OnLive has something of an ace up its sleeve in Perlman. Before founding the company, he led development on the technology behind QuickTime and founded WebTV. And the company’s investors include AT&T Media Holdings and Warner Bros.

And while the initial focus for the company was on a standalone set-top box over the holidays, Perlman has long evangelized the embedded market as the key to the company’s success.

“OnLive will be built into TVs; it will be in Blu-ray players,” he told Variety last month. “Much as you see a (music) service like Pandora on many devices, you’ll see us.”

The deal with Vizio will give the company a wide presence, too. The manufacturer boasted sales of $2.5 billion in 2009, and its TV segment holds a significant share of the U.S. LCD television market.

OnLive takes advantage of cloud computing to deliver titles to consumers. Games are stored and played on its centralized servers and pushed to users via a broadband connection. When players press a button on their controller at home, that action is transmitted virtually instantaneously to the game and reflected onscreen, meaning that virtually any screen with a decent Internet connection can be transformed into a high-end gaming system.

Game publishers have been on board with the company since the beginning. Electronic Arts, Ubisoft and Take-Two Interactive Software all offer some of their latest titles to users.

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