A long time ago I wrote a draft a blog post regarding the overall cost of OnLive vs the overall cost of owning a 360. I based my numbers on some guess work and Amazon EC2. Now the numbers are out I'd like to re-visit that post, updating it with what I now know.
I will make the following assumptions as I made previously:
* Both consoles will be used for 40 hours a month.
* Both consoles will be used for both online and single player.
I am not an economist as such the number will be wrong, the maths broken and overly simplified but as this is all for my own fun I think I can get away with it. Please correct my mistakes.
The total cost of ownership of a system can be split into the fixed costs (the price of the system) and the operation costs (the price of running the system - such as electricity).
A consoles fixed costs are quite high, a new 60 gig 360 is $300. The running costs for a 360 are the broadband connection(1) at about $15 a month and the electricity need to feed it. A hunt about put the electricity cost at $1.7 a month(2). Finally for the 360 you have XBox Live Gold at $4.17(3) as multiplayer is required.
The Cloud system will also require some hardware in the form of an IP-enabled MPEG player with a controller. This is an advanced DVD or Blu-ray player so I would guesstimate a cost of $70. It is very likely that the end user would not pay for this directly but for the sake of argument we will leave it as a fixed cost.
As with the 360 we will have a broadband connection at $15 a month and the electricity. I will use the electric cost of a PlayStation 2 as I think the two would be approximately equally powered. Plus the new system will likely also use things like wireless controllers offsetting any gains by modern construction methods. As such it will cost just $0.45 a month to run.
The one off cost could be avoided by using an existing hardware, likely leading to an electricity cost on par the 360 above.
On top of this the rental of a computer is required. This is $14.95 a month [ http://www.gamesindustry.biz/articles/onlive-to-launch-june-17-in-us ]
In summary with have -
Console: $300 + $20.87 a month ($250.44 a year).
Cloud: $70 + $30.40 a month ($364.80 a year).
We now need to look at the life expectancy of each device and would the local Cloud device survive the regular hardware refreshes that happen in the console market. If we start simple and give both a life expectancy of five years then the total cost of the console is $1552.20 and the total cost of the Cloud is $1894.
If we now assume that the local Cloud device can survive the refresh, but the 360 is replaced then the future five-yearly costs of the console is $1552.20 (the full cost above) and the Cloud is $1824 (just the operating cost).
Games are the last part of the equation. The Cloud requires you to "buy" games on top of the monthly costs, or rent games without subscribing. Alas the costs of games on the service have not been released but I think they will be comparable with traditional outlets. I will revisit this post once the costs to buy are released.
OnLive will also support a rental model which does not require a subscription. The details of this will change the results of this.
1) I'm assuming in both cases the users want to use online aspects such as multiplayer gaming. So I will use a standard 8Mb broadband for both systems. The reality is a lower and cheaper 1Mb connection will be fine for online gaming on local console but the Cloud system will likely tax such a connection and instead want ASDL2+ or cable.
2) Gizmodo: Console Power Usage
3) Based on the yearly cost of $50 divided by 12.