eldavojohn writes "OnLive is a new cloud gaming service that is in beta testing. While it might sound like nothing more than corporate buzzwords creeping over into the gaming world, a new video reveals how the CEO claims his service will work. Perlman explains OnLive's solution to the video game compression problem and talks about the '80 ms latency budget.' It's pretty interesting to listen to him figure out this budget and where the 'costs' come from. (Video only.) Now, this all hinges on the 'microconsole,' which — as he reveals at the beginning of the video — is so cheap they plan to give it away. We may also see it incorporated with TVs and other electronic devices. He goes on to talk about perceptual science and dealing with packet irregularities on the internet."