What Happens When Games Go to "The Cloud"

On Wednesday, a startup called OnLive that’s generating a lot of buzz–and skepticism–in the videogame world raised a new round of financing from AT&T (T), Warner Bros. and others. We spoke to OnLive founder Steve Perlman, a well-known serial entrepreneur, about the investment (which wasn’t quantified) and some of the implications if OnLive or startups like it are successful.

OnLive has developed technology that it says will allow consumers to play graphically rich videogames without owning high-end PCs or consoles like the Xbox 360 and PlayStation 3 that are normally required for such titles. Instead, OnLive plans to run games on powerful remote servers in data centers and pipe high-definition game graphics over the Internet to consumers, who can play them on low-end PCs and Macs or through an inexpensive OnLive device connected to their televisions.

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