I really didn't want this thread to degrade into another "Is it Really Possible?" thread. It would appear that we aren't ready with the proper infrastructure to handle a gaming system like this in most areas, but, the bottom line is that until any of us play it first hand and try it for our-selves, we honestly don't know if it's going to work or not. We're making educated guesses as best we can with what knowledge we have. I think we all need to remember that.
Granted, as with any "On-line" application or program there Are going to be limitations with the technology and infrastructure we have now. We all know that. There's really no arguing that. We've all experienced areas with limited or no connection. That's a Fact. So there is basis to surmise that this technology won't work. It has been tried in the past under different names, and until now it has been a "fad". Some fad's though, when the technology catches up to the idea, become a common reality. Take Ram-Jets for example. They've been around since WW2, but, because of the high temperatures involved in how Ram-Jet technology works, they've never really been a viable option....until the last five years or so. As some of you may know, the new US Space Vehicle, the "Space-Plane" that's replacing the "Space-Shuttle", uses extensive Ram-Jet designs in it's thrusters because they massively reduce the fuel consumption to thrust ratio. That is a prime example of Technology catching up to a old idea and making it a viable reality. The same is applying now and in the next few years to "Cloud Computing" and "Cloud Gaming".
The time WILL COME when this works, whether that time is now or some time a few years or more down the road. Even if it only works as advertised in some areas, those areas will generate enough income eventually that the profits can be used to upgrade further areas to support the gaming network so they can make More money.
Let us also not forget that a lot of parents don't like "wasting money" on video games and video game systems. The only difference between today's parents and the parents of the past 50 years is today's parents grew up playing video games so they are a little more likely to accept that they need to spend a moderate amount of money to do it. When the day comes that the Non-Tech savvy consumer can get a gaming experience that comes with a $2,000 computer or a $600 gaming console for $15 bucks a month, "Joe Blow the average gamer" will jump on that like white on rice to save all that money but still play the newest and best games. It's only a matter of time before this happens. When the technology works, it WILL happen, and any professional analyst who knows this market will most likely tell you the same. I'm willing to bet that's exactly what the analysts who work for OnLive are saying...right now.
Still, lets try to keep this conversation away from "Can it work" and instead think more about the ramifications of WHEN it works. Because sooner or later it will, if it doesn't already.
While we're speculating about the future, OnLive will be rendered useless, because we will have imaginationChips implanted directly into our brains, letting us create any games we want and experience them directly.
The fact is this: OnLive, as it is right now, will not work. I'm not even talking about the technology. I'm talking about the business model. My reasons were back in my first post, which you decided to conveniently ignore. Just like an MMO, and even moreso with OnLive, the initial investment costs are huge, and they need to hit an EXACT number of subscribers to stay afloat. If they go over, it will overload their infrastructures, causing them to lose droves of customers due to an inferior service. If they go under, obviously, they won't be profitable and fizzle out. You can't speak from a purely theoretical level. Theoretically, every MMO that comes out will be great! But you run into developer time limitations, downtime, customer dissatisfaction, bugs, billing errors, etc., and the business just doesn't succeed. OnLive has that written all over it.
Your guess that OnLive is the future is just as a valid as a guess that there will be a hardware manufacturing breakthrough and companies will be able to give out consoles for $50, rendering an idea like OnLive an incredible waste of money. As things are right now, it simply will not work.