If the volume of the screams and cheers for Nvidia's new Shield video-game console is any indication, the era of Sony and Microsoft's dominance over the living room is in jeopardy. The audience attending the event in San Francisco on Tuesday night consisted of about 2,000 gamers and software developers, who will also surely be the chipmaker's toughest critics.
Nvidia's biggest challenge isn't that it's trying to enter a two-horse race, where fans hold unwavering allegiances, or that it's got little experience making mainstream consumer-electronics products. Perhaps the biggest hurdle will be trying to sell gamers on an entirely new and largely untested technology. Instead of getting their games on discs or as downloads stored permanently on the system's hard drive, Shield owners will pay a subscription fee to stream content over the Internet. Sound familiar? "We want to be the Netflix of gaming," says Nvidia Chief Executive Officer Jen-Hsun Huang.
Cloud gaming has been tried before. A San Francisco startup called OnLive introduced computer software for streaming games six years ago at the Game Developers Conference, the same annual event where Nvidia showed off its console this week. OnLive eventually created hardware of its own, which went mostly ignored by gamers. The company fired its entire staff in 2012 and sold itself to a venture capital firm.
Now, though, the timing may finally be right. Servers are powerful and plentiful, and Internet speeds are climbing worldwide. More than 70 percent of Americans have a broadband connection at home, according to a study by the Pew Research Center. People are getting used to streaming high-definition entertainment from Netflix, Hulu, Amazon.com, and YouTube—often through their $400 game console. The convenience and instant access of online video is winning a lot of fans. Meanwhile, Blu-ray players are accumulating dust.
If streaming takes off this time with gamers, it could be bad news for the incumbent console makers. While Sony has a streaming service of its own called PlayStation Now, you'll still need a full-fledged PlayStation console or a new, high-end television set to use it. Microsoft has yet to introduce an Xbox streaming feature. Both systems allow customers to pre-load games before they come out so they're ready to play when the clock strikes midnight. Microsoft and Sony declined to comment on Nvidia's Shield.
The PlayStation 4 and Xbox One are also feeling pressure from one of the top game developers. Valve, maker of the Half-Life and Dota games, is pushing a new operating system and hardware designed to hook up to a TV, which build off of its Steam software for PCs that millions of people use to buy and download games. Steam Link, a new device Valve unveiled on Tuesday, lets users stream a game downloaded to their home computer in another room, similar to a feature Microsoft announced for the Xbox One on Wednesday.
Nvidia claims to have solved the most crucial barrier to entry for streaming games over the Internet: latency. Technically, it's the time it takes until a button press registers to a corresponding action on the screen, and it means everything to hard-core gamers. Simply put, anything that's noticeable is not acceptable. Nvidia's audience of Call of Duty and Halo fans will quickly turn their backs on Shield if the system's responsiveness doesn't match the Xbox or PlayStation.
The key component of what Nvidia is proposing isn't in the $199 Shield's sleek, black aluminum box or its controller. It's many miles away. The system relies on racks of servers full of powerful Nvidia GeForce graphics chips in data centers around the world operated by Amazon. The servers host the games and handle inputs in "150 milliseconds or so," says Huang, the Nvidia CEO. That's about half the time it takes the human eye to blink. Because the magic is done in the cloud instead of inside the hardware, Nvidia and Amazon can upgrade the servers and improve how the games look at home without requiring customers to buy a new console.
Nvidia says the Shield will go on sale in May, and the service is already available for PC users for free currently. The company declined to comment on the subscription price. There will be about 50 games available at launch, including Batman: Arkham Origins and Grid 2.
After the event, the bearded, tattooed faithful partook in demonstrations of the product set in mock living rooms. While the games played just like they would on an Xbox or PlayStation, the controllers had wires, and it wasn't clear where the games were being hosted from. Whether the technology will hold up under the strain of millions of people playing simultaneously—assuming Nvidia gets that much interest—is unclear. "It's an incredibly difficult challenge," Huang says.
—With Dina Bass