Is OnLive game streaming service a console killer?

It's not often that something comes along and turns the video gaming world on its head, but a new service revealed this week in San Francisco might do

It's not often that something comes along and turns the video gaming world on its head, but a new service revealed this week in San Francisco might do just that.

OnLive is basically computer gaming via the cloud – it allows you to play graphically advanced games like Crysis simply by streaming them over a high-speed internet connection onto your computer. Because the game is actually installed on a remote server, your own PC can be a bog standard Atom-based netbook rather than some hulking ninja rig with an expensive graphics card.

Alternatively, you'll be able to play games on your TV by plugging in a MicroConsole, a tiny web-connected box the size of a pack of cards. This comes with an HDMI output and Bluetooth for wireless voice chat. According to Engadget, the MicroConsole will cost less than a Nintendo Wii.

So how does it work? Well, OnLive's founders reckon they've found a video compression algorithm that allows high-resolution graphics to be squirted from a data centre and along the intertubes to your home. A 1.5Mbps connection will get you Wii-style graphics, while a 4-5Mbps connection means you can have hi-def games.

With most of the big publishers (EA, Ubisoft, Take-Two, THQ, Epic, Eidos, Atari, Codemasters) already on board, the future is looking very bright for OnLive. It's expected to launch this winter.

But what will the likes of Sony, Microsoft and Nintendo make of a service that could at a stroke make their machines look underpowered and overpriced? Some analysts are predicting that OnLive will either be copied or simply bought out by one of the big gaming hardware companies.

What do you reckon? Will you pack up your consoles if OnLive is good enough? Have your say below