Games sell platforms, not hardware. So to be successful, the Onlive service needs some signature games. They won't get any from the big 3 studios, so they'll have to rely on also-rans - some of which may be decent, but who is going to take the chance?
There are a lot of questions yet to be answered, much less the technical issues of dumping all this data downstream without too much latency - not for 2 computers in a demo, but with thousands or tens of thousands.
Cost, of course, will be a big thing, with gamers used to paying very little to play online, once the game is purchased. 'Renting' a few games on a monthly system isn't going to fly if it's $50/month.
Interesting idea, though, I'm glad someone is at least trying it out.
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