Last week at the 2009 Game Developers Conference in San Francisco, a revolution of sorts was unveiled.

What has been widely hyped as a kind of "gaming Bluetooth solution" was presented to media and industry pundits after a mere seven years of development at Rearden, the media and technology incubator behind MOVA, Ice Blink Studios and Moxi.

OnLive is an on-demand video game platform that has the goal of delivering the latest and most advanced games instantly on any TV via a PC or Mac. This may seem fairly uninspired; millions of computers invariably manage this on a daily basis, however things become a little more complicated when you realise that the game mechanics - from computation to video rendering - is all done server-side and transmitted to your home through a broadband connection.

The idea here is that your PC need only perform basic input tasks, allowing almost any low-end beige box to have the appearance of a top-end gaming rig simply by subscribing to the service. If you don't own a PC you can purchase an optional "MicroConsole" unit that will emulate the current console experience by providing you with a translation box and four wireless controllers.

Variations on this concept are nothing new. Digital distribution portals such as Steam and GamersGate have found success serving up both trial and full versions of titles for PC gamers. Yahoo! may have struck out with their Games on Demand service, however they still retain a comprehensive catalogue of free-to-play web-based games online. Indeed, it could be argued that many Massively Multiplayer Online games already utilise a similar method of content distribution, as complex calculations and environmental information can be contained server-side and streamed to relatively low-end machines within the home.

What sets the OnLive service apart from everything that has come before is its ability to unify all gaming hardware under one umbrella, and allow all gamers irrespective of personal preference to participate from any location at any time. In a similar way that Windows and fledgling Internet support saw off Commodore, Atari, Amstrad and a host of other manufacturers to become the enthusiast's online gaming platform of choice in the 1990's, OnLive seeks to not simply offer a simpler and more convenient way to play games, but to make consoles and dedicated gaming computers utterly obsolete.

Unfortunately, those who assume this revolutionary platform heralds the end of multi-page forum flame wars between adolescent console fanboys would do well to look at the logistics involved.

In OnLive's own admission, a standard-definition image streamed from an OnLive server to an end-user requires a minimum of 1.5 Mbps of dedicated bandwidth. In old money, that's the equivalent of transmitting the contents of a floppy disk every eight seconds or so. Not overly taxing, even by New Zealand's woeful broadband standards - but that only gets you picture quality akin to a PlayStation 2 or Nintendo Wii.

Bump this up to 720p at 60 frames per second, the HD target which OnLive plans to reach at launch, and you'll need between 4 and 5 Mbps to have a seamless gaming experience. Remember too, this is dedicated bandwidth that would require significantly more overhead between you and your ISP to maintain, and perhaps more importantly between your ISP and OnLive's servers, but more about that later.

"OnLive is the most powerful game system in the world," claims Steve Perlman, OnLive founder and CEO. "No high-end hardware, no upgrades, no endless downloads, no discs, no recalls, no obsolescence. With OnLive, your video game experience is always state-of-the-art."

To make an assumption, "state-of-the-art" presumably would include adopting upcoming high-definition standards as they become available to the market. As 1080p transmits a staggering 225% more information per second than 720p (124 million pixels vs. 55 million at 60 frames per second) and full, native support of this HD standard is certainly going to be a prerequisite for the next generation of gaming consoles, OnLive must be banking that global broadband speeds are going to increase at a faster rate than consumer electronics can decode an image and beam it over a short cable to your television.

Even imagining for a second that OnLive have developed a method of compressing and streaming gaming data with virtually no latency, something that has eluded the brightest scientific minds for decades, there's still the problem of creating the data in the first place.

You can pick up a midrange video card for around NZ$250, and coupled with a modern dual-core CPU and a couple of gigs of RAM there aren't too many titles you can't enjoy in 1280x720 with maximum quality settings enabled. OnLive, by removing the gaming hardware from your lounge, will need to reproduce something akin to this PC setup for every single user of their service. It's hard to imagine a dedicated server farm capable of supporting the launch of a major title, not only from a bandwidth perspective, but in terms of hardware and even sheer power consumption.

Again, to remain ahead of the technology curve, OnLive will need to regularly upgrade this hugely expensive stack of hardware to provide a "state-of-the-art" experience for every end user. The real concern here is what sort of a subscription model is going to be required to provide the company with enough revenue to set up this monolithic data centre in the first place? Even with support from every major game developer, it'll be a hard sell to risk launching an AAA title to market using solely this method of distribution, particularly when simpler services such as MSN Messenger and YouTube regularly have issues streaming far smaller quantities of data to their subscribers.

Furthermore, the type of connection required between ISPs, or groups of ISPs, back to the OnLive service is staggering. Even if OnLive distributed datacentres throughout the world, the amount of bandwidth this service will consume means you'd have to expect to see the majority of an ISP's traffic change to gaming virtually overnight. In New Zealand, where a 20:1 contention ratio isn't deemed unusual, any more than a handful of users on each telephone exchange will all but ruin data throughput for every other user on the service. If ISPs struggle to contain P2P filesharing within acceptable standards to benefit bread-and-butter users, they're going to have a nightmare on their hands with OnLive. Not to mention the data caps users have to deal with; at the 720p HD rate of over 4 Mbps, a one-hour gaming session would chew through nearly two gigabytes of data.

Then there's the issue of latency. Every move of the stick and every press of a button on the controller will have to be sent over the internet to OnLive's servers, processed, then the updated video image sent back to you before you will see what you've done. (If you've ever accessed a remote computer using Terminal Server, you'll know how painful this kind of experience can be.) Minimising this "lag" will require OnLive to have their servers not in one massive server farm, but rather dotted into lots of geographically spread datacentres so that they are as close to their users as possible. That will be a huge challenge just to achieve in the U.S., nevermind the rest of the world.

So, initially this method of gaming seems like a fantastic way to bridge the divide between PC and console, and move towards an all-encompassing gaming solution that can expand and enhance our digital lifestyle. But if you consider the potential for abuse when one company controls all avenues of distribution, the gloss tends to fade somewhat. What will the subscription cost be? Will we be forced to endure in-game advertising? What will happen to modding? And will Sony, Microsoft, Nintendo, Nvidia, AMD, Intel and dozens of other major hardware manufacturers stand idly by while an upstart seeks to remove their relevance to the consumer?

It's time to step back from the hype. That next-gen console you bought last week will still be around for a long time to come. OnLive may be shooting for the stars with this service, but they'll need to prove they can get the rocket on the launch pad first.

While continued development of such a lofty concept seems inevitable and ultimately may pay off when technology catches up, in the meantime we'll probably be stuck with a platform full of titles that look vaguely familiar to what you played on the N64. Or worse, something that promises too much and entirely fails to deliver.