OnLive and Zeebo portend a shift in power to TV/Internet providers [GDC]

It was the biggest question at GDC: What do you think of OnLive? Will it work?

Given the major companies (EA, Take-Two, Ubisoft, Warner Bros.) behind it, OnLive is certainly not vaporware like the Phantom. It has solid technology and a business plan that could work. If the service runs as smoothly when it launches next Winter as it did in OnLive's GDC booth, it should have a fighting chance, especially amongst consumers who haven't yet bought an Xbox 360 or Playstation 3 (and most certainly by the time the big three launch their next consoles).

Regardless of whether OnLive is a hit, subscription-based or ad-supported video games are the future business model for the industry, just as it is for software and other forms of entertainment. Once consumers become comfortable not "owning" anything the way they do now, the insanity of buying a new console or version of Microsoft Office every few years will become apparent.

That transformation will mark a remarkable shift of power in the video game industry. No longer will Nintendo, Microsoft, and Sony be the center of the industry, defining technical specs and getting a cut of almost every dollar spent. The new center of power will likely be the cable and telecom companies that provide Internet and television service.

Remember when TiVo came out and the early DVR lovers bought its box? Today, TiVo is dying and most of us get TiVo-like service from our cable or satellite provider, via a set top box with a DVR built in. Instead of buying hardware for several hundred dollars, we just pay Comcast or Dish an extra $5 or $10 per month.