OnLive appeared in our newsfeed again. They've been through a financial restructuring but are still alive and kicking and have continued to provide good gaming service. Perhaps their timing was wrong, perhaps with the next generation consoles being announced in the next couple of months, they may be superseded or have more direct competitors (what has Sony done with Gaikai?).
Anyway the reason they were in our newsfeed was this article from Redbull: Cloud Consoles: OnLive's Epic Plan For A New Type Of Video Game. A comment towards the end indicates a type of MMO that could only be implemented on a cloud service. What type of game could only be provided on a cloud service? This is an interesting question (in more ways than one, see below!).
Well certainly the data density could be too high to be worth shipping DVDs or wasting hours of bandwidth: the game could just have enormous worlds. Alternatively, in a slight variation, the world might be very visually complex and thus hard to stream: think rendering of SecondLife worlds without the constant downloads. Or it might just be rendered at extremely high quality. A less obvious potential we actually set as an exam question last year: we posed the question whether a networked game was more fair if run on an OnLive-like server because there was no desynchronisation of client state and server state. Thus OnLive might be a solution if you really wanted a highly trustable online service for your MMO.