Wedbush Morgan's Michael Pachter has predicted the arrival of OnLive, the service to transmit high quality games, "will impact" console and retail.
He adds that publishers are likely to flock to the service if it proves stable, they'd "derive greater revenue" than they would from retail. Low price will govern "success or failure" of OnLive.
Here are senior analyst Pachter’s full notes:
- Tuesday night at the Game Developers Conference, Rearden Labs introduced OnLive, a new cloud computing service that will allow consumers to play console quality games without a PC or a console.
- No business model was announced, and in our view, the success or failure of the service will ride on whether it is priced low enough to induce a large number of consumers to “subscribe”, in turn driving a greater number of games available from the publishers.
- In our view, the OnLive model will appeal immensely to publishers, who will likely derive greater revenue per sale than is derived through conventional retail distribution.
- We think that the adoption of a service like OnLive will impact console sales.
- Similarly, we think that the adoption of a service like OnLive will impact retail.
The biggest hurdle for OnLive is the national infrastructure of Internet connections, without a decent stream of data in place the service would just collapse.
OnLive will "appeal immensely to publishers," hurt consoles sales
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