If online gaming is successful, games consoles could become obsolete
In a market dominated by expensive console games, new online services are allowing gamers to play the big titles without paying big bucks. When players no longer need to own the latest console game to enjoy playing it, is it game over for the games console?
Launching later this year, Gaikai offers console gaming straight to laptops without the need for the associated hardware. When you use Gaikai to run high quality games on a standard laptop, it is actually running on powerful servers.
Your netbook just sends over your moves and receives a video feed back. No consoles, game discs or downloads are needed. The game is wherever you are - if you are online.
Online gaming already exists for more simple games like Playfish and World of Warcraft. But this promises high-end action to low-end laptops.
Gaikai CEO David Perry explains the appeal of online gaming to developers.
"If you look at a game like Farmville on Facebook, it has over 80 million players. It shows what can be done when you open the doors wide.
David Perry believes Farmville has opened up the games industry.
"You make it incredibly accessible, you allow friends to share and we can do that with any game now. We could put any game online like Facebook, just as easily as Farmville."
But for now, Gaikai's offering is somewhat more basic. Go to a site like Amazon or IGN and if your connection is fast enough, you simply get an invitation to instantly play the game, regardless of what device you are using.
In the coming weeks, those who sign up in the US, UK, and France will test a trial version, with the service going public later this year. Initially, just the first few levels of a game will be offered - a kind of try before you buy.
Gaikai's main competitor, OnLive, seems to be one step ahead. This is a multiplayer, cross-platform, streaming service offering complete titles.
OnLive's vice-president John Spinale says online gaming means never having a physical disc that can get lost or scratched.
"I see this as absolutely the way of the future - not just with OnLive but digital distribution overall. People do not really want to buy hardware. They want to have access to software and they want to play the games."
The OnLive system, launched in the US in June, allows PC or Mac gamers to challenge each other. Ultimately, any connected mobile device could be used to take on someone else.
Unreal Tournament 3 - a PC game - can be played on an Apple iPad even though its processing and graphics capabilities would struggle to support this content.
Again, all the processing is done miles away on a server. As long as your device can stream video and you have a fat and fast enough connection, you can play. No discs and no specialist games consoles.
But not everyone thinks it is a good idea to shed the hardware before going into battle.
Shane Satterfield, editor of Gametrailers.com, experiences problems himself trying to play games online.
"You could have bottlenecks at any time, night or day. Even at weekends here in Los Angeles, I get lag trying to play games online.
"But one thing I can always count on, is that when I put a disc into my Xbox 360 or my PS3, that game is going to look and sound the same every single time.
OnLive offers multiplayer and cross platform games online.
"It is the plug and play accountability of a video game console that people really rely on and I think that is what is being overlooked in cloud gaming."
And therein lies the catch. To play these games in 720p HD you need a 5MB connection - that is more than the average in the US and about the average speed in the UK. Full 1080p HD needs a pipe twice the size.
The time it takes between moving your controller, your moves being sent to a server, then translated into the gameplay, rendered and sent back to your device as a video stream is critical.
That delay - or "latency" - depends largely on how close an OnLive server is to where you are and will be most acutely felt in fast moving games by more experienced players.
Mr Satterfield believes gamers' preference for hardwiring could also dissuade many from using services like OnLive and Gaikai.
"Machines now have wireless adapters, but nobody wants to use them. They want to hardwire their machines, because you lose a little bit of connection speed through the wireless process.
"If people were not even willing to use a wireless adaptor on their consoles, there is no way they are going to sacrifice half their bandwidth to have this stuff piped in to play."
Despite the sceptics, initial reports have been largely positive, with many surprised by the playability.
But OnLive has temporarily stopped supporting devices using wifi connections, saying they don't have the experience to troubleshoot wireless networks in the home.
Realistically, the idea of using a phone or iPad to play anywhere will rely on the next generation, faster 4G mobile networks which, for most countries, are a good few years away.
Other concerns persist. Will gamers want to effectively rent a game when they could own it?
Many of OnLive's target audience already own a console and the price of them is tumbling, so savings for those who choose the OnLive route will be limited.
And surely we want to play on big televisions not laptops? To make that happen a MicroConsole TV adapter will be sold, containing the bare essentials to stream a HD service.
The MicroConsole will cost a fraction of the price of the PS3 or Xbox, but there will be no media player or storage onboard.
There are also questions over how the new crop of motion sensitive controllers, such as Sony's Move or Microsoft's Kinect, will work in a more basic home set up.
BT has begun beta testing OnLive gaming for launch in the home
Mr Spinale says OnLive supports motion-based platforms.
"We support USB. So any device that you can hook up to your computer or your existing consoles will effectively work in our world as well.
"As long as software developers are supporting motion-based platforms, whether using gestures or motion controllers, so will OnLive."
In the UK, telecoms giant BT is running OnLive beta tests.
Jon Hurry, commercial director of BT Consumer, will not say when the launch will be, but insists connection speeds will not be a problem.
"We do not see that as an issue because at the moment with our TV service, BT Vision, we deliver entertainment content at peak time to consumers via our network and we prioritise the traffic in order to be able to do this.
"We see the gaming experience being delivered in very much the same fashion."
Whether this ends up as an elaborate experiment or not will depend on new business deals being struck and broadband becoming more reliable. Only then might the console be killed off.