A new online gaming service called OnLive was announced this week at the Game Developers Conference (GDC), promising a new way to play video games via digital distribution, but will it undermine the hardware based consoles?

Instead of worrying about keeping that tricked out gaming rig up to spec, or having a big old console sitting under your TV, OnLive actually runs the games on their own servers and streams the video to you through a 1Mb browser plug-in for your computer or a “microconsole” hooked up to your monitor/HDTV. They also have a very Xbox 360-like wireless control to control the games (though I’m guessing that keyboard and mouse support will be there too), and promise a number of online community features, such as being able to watch others play a match without owning the game, their own version of achievements and much more.

Pricing for games will include a combination of subscription and purchase options, which offers a lot of flexibility, with a number of big name game developers already signed on, such as EA, Take Two Interactive, Warner Brothers, THQ and Eidos.

The idea of being free of the hardware hassles of keeping up with the Pwnses is may be liberating, though it may come with a price.

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