OnLive recently went into an open beta, while David Perry continues to ramp up his effort on Gaikai. If cloud-based computing does indeed lead to highly reliable streaming game services, the industry could be in for a revolution that completely overhauls the market and the traditional business models we've seen over the last 25 years. Microsoft does not seem concerned, however, indicating that streaming games are still a long ways away from impacting the industry.
Speaking at London Games Conference, Xbox Live EMEA boss Jerry Johnson commented [thanks MCV], “I think streaming technology is something that [the industry] is betting on longer term. Right now I don’t believe that technology can scale out against the experience we can offer on a local machine. The technology will continue to improve. As an industry we’ll have to accept that and move with it - but I don’t think it’s on an accelerated timeline for the foreseeable future.”
Of course, it's worth noting that Microsoft is in the enviable position that if it feels threatened enough by OnLive it could just buy the company for its technology and use it to its advantage. Early speculation about OnLive suggested that the company was created with the sole purpose of getting acquired by a giant like Microsoft.
