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Online gaming service firm OnLive launched its all-you-can eat $9.99-a-month subscription plan for gamers to access a library of video games. The move, which the company announced in December, is aimed at disrupting game retailers, much the way Netflix did to DVD sellers when it offered monthly subscriptions for a library of movies.

So far, the library isn’t too fear-inspiring for game retailers. With 38 titles, OnLive has a respectable number of games for users to play, but it’s a long way from having a gigantic library. Over time, though, it could become an interesting revenue source for game publishers and a new option for gamers who don’t want to spend $60 on a single game.

OnLive offers instant gratification with its games-on-demand service that debuted in June. Users log into OnLive and immediately play games that are computed and stored on OnLive’s data centers. Users don’t have to download anything and don’t need a high-end computer to play high-end games. So far, OnLive has been offering a la carte game sales and game rentals. Since OnLive focuses on digital distribution of games, it can disrupt retailers such as GameStop and put more profits in the hands of game publishers.

The company will keep offering those options. But today, OnLive started the $9.99 a month PlayPack subscription. Users won’t be able to get the newest premium games in the PlayPack. But they will get high-quality recent games that are perhaps six months old or so, and they will be able to play new indie games as well as classic games.

OnLive said that the strategy is aimed at vastly broadening the company’s potential market of game customers. With a flat-rate subscription, OnLive will pursue the same path that Netflix has successfully followed, attracting users who don’t necessarily want to dish out a lot of money for one title but don’t mind paying a monthly fee to sample a bunch of games. For premium new games, OnLive offers a la carte pricing, much like Apple’s iTunes store does.

Current PlayPack titles include Bioshock, Hidden Path, FEAR 2, Frontlines: Fuel of War, Supreme Commander Forged Alliance, NBA 2K10, Tomb Raider: Underworld, Titan Quest Gold, Unreal Tournament 3, Tropico 3, LEGO Batman, Defense Grid Gold, Saw, and World of Goo.

OnLive is now shipping its MicroConsole game system, which costs $99. The MicroConsole is a small adapter that plugs into your TV and allows you to play high-definition games on your flat-panel TV. The OnLive hardware could disrupt the more expensive consoles, especially as more high-end games become available. If you want to play on a PC or a Mac with a computer monitor, you don’t need the MicroConsole.

OnLive investors include Warner Bros., Autodesk, Maverick Capital, AT&T, British Telecommunications and The Belgacom Group. The company was founded nine years ago and has 200 employees. Because its technology is potentially disruptive to traditional game retailers, investors recently valued the company at $1.1 billion.


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