online is up and running. so how come nintendo, sony and microsoft are still around when it was declared that onlive is the console killer?! that is to say that one no longer needs a console to play games. well, no one is rushing to get onlive. onlive is dead! you know how you know?! no one has hyped, mentioned or talked about it during it's debut. it had a silent, very silent debut. i almost forgot about it until some dude mentioned about it.
Uhhh, Onlive is not a console killer, its a PC Hardware killer. This cloud based service has also been around awhile, but its only just now taking off, i believe there are two other services opening up doing the same thing right now.
OnLive won't be a viable service until you're able to actually own the game, and internet speeds become extremely fast. From the people who were in the beta, there's very noticeable input lag and a lot of artifacts in the graphics. Even with the people with fast internet connections. I can't imagine multiplayer being very popular either since it's going online and downloading the controller inputs + the game screen. That and you don't actually own the game, even if you buy it. You pay a subscription fee, and if you purchase a game fully, and then cancel the subscription, the game is gone. You don't actually own it.
Two reasons why it didn't kill console gaming: 1. It was never supposed to, as Natalie said. 2. It is, sadly, a product ahead of its time. I could see this implemented in ten years, no problems. We just don't have the infrastructure to support it on such a scale at this point in time.