I've been playing some games on Onlive (mainly only paid for games because they had a Labor Day sale, everything 50% off woohoo!!) and I have to say it's not too horrible in my opinion. I had my doubts about the service even working, but it seems these guys did they're homework, at least most of it. Very little lag from control input to action on screen, virtually unnoticable. Decent graphics, would look better in native resolution, but you know your only getting 720p when you sign up, which is about what you get from PS3 on most games anyway.
Having said that, is resolution really THAT important? Sure it will give you a crisp high contrast picture but the point of a game is to play, not too oogle over how many pixels you can push out on super high settings. Sure if you dished out 600 bucks on a new graphics card, it better be able to push out the goods, but if you sign up for onlive you wouldn't have even needed to pay for that over charged card in the first place. And I know there's an arguement about the saticfaction of building a hardcore gaming pc so you can be proud of your big, fancy, shiny, sparkling, light emitting, overpowered, piece of hardware that can play anything that comes out in the next 6 months, and I get that. But, there are lots of people who don't have the money, or prefer to not defer that much of their cash flow into a piece of equipment that has no return value, perhaps spending it on things like paying bills, or unpaid parking tickets, maybe even food.
Anyway, there are plenty of reasons people can't afford to invest in a high-end machine to which would likely benefit from this service, granted they would need a reliable broadband internet connection. To add on that last note, I've rarely noticed a drop in video quality due to loss of bandwidth, which will usually occur, most likely, during peek hours on your isp, generally the afternoon. But honestly what do you want from an actively compressed streaming video gameplay service? Anyway, feel free to argue with any of my points, and snarl your nose snobbishly at my opinions, or just add your own thoughts as you see fit.
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