So you know about cloud-based computing and you hear us talk about it all of the time. Well, now a new startup company wants to deliver what we are calling cloud-based console gaming. OnLive, which was founded by Steve Perlman, formerly of WebTV fame, and Mike McGarvey, formerly of Eidos, hope that the OnLive cloud-based gaming and digital distribution service could pave the way for a new gaming future.

The OnLive box connects to the user’s TV and the user can interact with it using a wireless controller as well as a VoIP headset. You then have to connect the OnLive box to your broadband Internet connection, and it will take as much as 5MBps of bandwidth for 720p HD gaming or 1.5Mbps for standard 480i gaming. The system then streams on-demand games on to any Intel-based PC or Mac, regardless of how powerful the computer is.

OnLine claims that they have addressed the issues of latency and lag using a proprietary compression technology that the high-end servers in the cloud can deliver to the games streaming, rather than having the user download the games one at a time. The company claims that it will have 16 games when it launches.

OnLine hopes that this new cloud-based gaming could be the wave of the future and is hopeful that the lack of need for continuous upgrades will attract users to the service. We think it is more likely that they will need the support of publishers and triple “A” titles in order to stand any sort of a chance at all. We just are not sure that even if it is priced right that people are ready for cloud-based gaming technology.