OnLive, the online games on demand service, is announcing today it has added Borderlands to its all-you-can-eat subscription service known as PlayPack. The PlayPack library is very similar to Netflix subscriptions. In this case, you can access a bunch of games for a flat fee of $9.99 a month.

And with the addition of Take-Two Interactive’s Borderlands, the games in the library are getting better and better, said OnLive chief executive Steve Perlman in an interview. There are now more than 50 games available in the PlayPack library. That’s far fewer than Netflix, but its growth shows that game publishers have increasing confidence that OnLive is becoming a better and better game distribution channel, just like Netflix proved itself as a viable movie distribution system, Perlman said.

Borderlands debuted in October 2009 and won numerous awards as one of the best original titles of the year. Gamers are still playing the game (it ranks pretty high on Valve’s Steam online game service) because it has a rich multiplayer version. Other popular titles offered in OnLive’s PlayPack are Prince of Persia, Tomb Raider Legend, Lego Batman and Just Cause 2. Perlman says the games on PlayPack essentially cost 20 cents per month to play.

These games are all pretty popular as used games and were bestsellers when they first came out. But publishers are releasing them for use with OnLive because — unlike the used games sold in stores such as GameStop — the game publishers can make money from OnLive’s PlayPack library. More high-profile games will arrive on PlayPack in coming weeks, Perlman said. (Perlman, by the way, will be one of our fireside chat speakers at GamesBeat 2011 — see below).

Another new feature is debuting on OnLive today. In the past, you had to enter your credit card number to demo free versions of the games in PlayPack. Now you don’t have to do that. Players who don’t want to pay a subscription fee for a library of older games can also pay a la carte, either renting or buying games one by one.

And players can buy brand new games on the very day they come out in stores. OnLive is starting to promote some deals very aggressively. For instance, you can buy Duke Nukem Forever at regular price on OnLive when it comes on June 13. OnLive will give away either a free game or a free MicroConsole ($99 value) with the purchase of the Duke Nukem Forever game. That’s a good deal.

Perlman said OnLive can afford to do that because it is subsidizing the costs as part of a promotion. The MicroConsole is a strategic device that OnLive wants to get into a bunch of living rooms (it connects a TV to OnLive so users can play OnLive games on a big screen TV). So Perlman said OnLive will offer temporary promotions to help the MicroConsole take off.

OnLive first launched its PlayPack in February. The company doesn’t disclose results, but Perlman said the library is profitable and will continue to grow bigger over time in terms of numbers of titles.

OnLive offers instant gratification with its games-on-demand service that debuted in June, 2010. 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.

Perlman said the PlayPack 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.

OnLive investors include Warner Bros., Autodesk, Maverick Capital, AT&T, British Telecommunications and The Belgacom Group. The Palo Alto, Calif.-based 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.

We’ll be exploring the most disruptive game technologies and business models at our third annual GamesBeat 2011 conference, on July 12-13 at the Palace Hotel in San Francisco. It will focus on the disruptive trends in the mobile games market. GamesBeat is co-located with our MobileBeat 2011 conference this year. To register, click on this link. Sponsors can message us at