In the end, I feel that these are already priced in, with the drop in GME share price from $60 to its current 22. The bar has now been set low and GME should be able to exceed it. I'm not claiming that GME is goign back to 60 right now, I am looking for upper 20s.
OnLive won't affect current revenue at all. It will have a small hard to measure impact on revenue growth, since it's one more outlet for consumers to get their entertainment.
Death by a thousand cuts, OnLive is just one of them. Not very important by itself. And it's PC only.
Of the things which might hurt GME, I dont think OnLive is one of them. You get to pay a monthly fee for the priveledge of paying more to be able to play games without the console. You are dependant on the servers and the internet connection and probably suffer through increased lag.
Customers will follow the path that is the most technologically advanced for the least cost. For OnLive to truly succeed it will have to develop too many partnerships with companies that would suffer it if excels. If I were placing bets it wouldn’t be with OnLive even though I have a lot of respect for Steve Perlman.
I’ve looked extensively at OnLive and don’t find it to be either technologically advanced (long live Remote Desktop V2.0), nor a good value (Subscription fees, and you have to purchase software, and you have to play over WAN). I’m sure it will find a market but my bet is it won’t be a major part of the console market anymore than Xbox Live! ran Sony & Nintendo out of business. And I think Xbox Live! model is much better suited to the gaming industry than OnLive.