SL Go from OnLive, which allowed people on older hardware and mobile devices to experience Second Life at high resolution settings finally came to the end of its life on April 30th. Today when you launch the application you just receive a message informing you that an error has occurred. In some quarters people will say that the error occurred at Sony HQ, but I think it’s a bit off to bash Sony too much.
The real issues were explained in that final blog post from OnLive : A Bright Future for Cloud Gaming at Sony. The title of the post sounds bright, the reality wasn’t. However there’s an interesting tie in with future developments, which I’ll come to shortly. In the blog post OnLive admitted :
Since 2012, the company has dramatically improved its technology and business models such that all of its 5 services are gross margin positive, ranging from 43% to 86% margin. The fact that we had such positive margins should prevent repeat speculation that we were “crushed by infrastructure costs.” The company also was able to achieve conversion rates from free trial to paid of between 64-78% for its services. Despite these positive metrics, the lifetime value (TLV) of a subscriber was still less than the cost to acquire subscribers (CPA), but they were converging. While we knew we could not get to break-even on our own, we believed that there were many large companies who would be able to get there due to: 1) being able to communicate broadly and inexpensively (lowering CPA), 2) having their own distribution platform for the service, and 3) being able to license the most popular games and MMO’s, the latter 2 would have had the effect of both reducing CPA and reducing churn (thereby raising TLV). Despite these positive developments, we were unable to entice an acquirer who wanted to continue the service, and Sony already had their own service.
That pretty much sums it all up. OnLive were not turning a profit, although their metrics were improving. Sony did not need another platform for streaming games. Whereas there were other interested parties, Sony put their money where their mouth was and purchased what they felt they needed. Whereas this is without any shadow of a doubt disappointing for those of us who genuinely enjoyed the service SL Go provided, the cold harsh realities are there for all to see.
Continue reading “SL Go Gone But Not Forgotten As Bright Canopy Look To Fill The Void”
