OnLive is no longer new to the world of gaming. Yet, almost three years after its release, I am still not sure the brand will be a success unless the company quickly re-evaluates its focus.

Both my interest in OnLive as well as my frustration with the brand is rooted in a desire to see it succeed. I have talked many times about the natural progression toward digital formats and OnLive alone is carrying the flag for this transition within the console gaming market.

My frustration with the value of OnLive’s brand is that the value has been placed too heavily on technology. The technology is impressive, but when it comes to content, OnLive is lacking.

Sony had a similar problem when it pioneered e-book readers that used the e-ink technology that is still used in some circles today. Sony may have been first but today Amazon’s Kindle easily eats Sony’s lunch in e-reader sales. In the world of e-books – and video games – content is king.

Amazon understood that. Sony didn’t.

I first tried OnLive to see if the technology worked. Did it ever. That was all I needed to be sold on the idea of a purely digital transition for the market.

But then I looked beyond OnLive’s technology to the content and was disappointed.

In the video game market, brand and content are the two biggest points of differentiation. PlayStation 2 was a huge success because it commanded both. PlayStation 3 had a rocky run because it commanded neither. OnLive is new to the market and still trying to develop a brand. That won’t be easy with its content so weak.

This is not to say that OnLive is not making some smart moves. There is a push that could increase OnLive’s visibility, with rumors that Sony is looking to partner with a digital game service like OnLive that would run on Sony’s PS Vita and news that OnLive is teaming with Vizio on a new set-top box. Yet, due to its limited content library, it might be putting the cart before the horse.

Technology cannot drive preference all by itself. Technology must be driven by purpose. Content provides that purpose. As it stands, OnLive has no exclusive IPO, no big deals in the works with developers, no massive additions of current generation content to its digital library, and above all else, no brand message that defines who the OnLive customers are and why they should prefer OnLive.

It’s not too late. OnLive has the ability to turn this industry on its head. From how the market views content ownership and distribution of that content to how it can increase profits to developers, OnLive could change everything.

If OnLive fails, there will be at least one more console cycle stuck with the status quo. With or without OnLive, I believe the market will eventually make this shift. It just might take longer.

The gaming industry seems to be split up into two audiences: The serious gamers and those of us who play on less intensive platforms such as an iPad where Angry Birds and Plants vs. Zombies is enough to give you your fix.

Bridging those two audiences is a delicate achievement and is fraught with potential failure if your attempt is simply to copy what others are doing. Nintendo is in that spot, especially when it comes to its upcoming Wii U system.

Just ask yourself this: If you had an iPad in one hand and the Wii U in the other, which one would you choose? This is the position Nintendo is steering its new game console toward. Gaming on consoles and gaming on tablets, however, are different beasts with two different audiences.

If you ask most people who play videogames, they do not confuse blockbuster console games with the arcade style mini games the iPad has made popular. There are certainly markets for both, but they are not the same. Pricing structure is different, required resources are different, marketing is different, user interaction is different, and visuals are different. Most of all, the complexity is different. The audiences for these are serious about gaming. The audiences for the iPad games usually aren’t.

Nintendo is also considering a new social network it calls Wiiverse. The problem is that the market has already demonstrated that people don’t want more than one social network. Just look at Google+, Ping, or MySpace. I greatly doubt if people looking for consolidation of their social network experience would choose Wiiverse in place of Facebook.

Nintendo’s system will still make a splash. It has enough loyal fans that will want their exclusive titles. But its attempt to create “broad appeal” is not the most competitive approach, not when competitors within each specific market are doing “specific” very well.

I expected more from Nintendo. It needs to think again like a true innovator, then wii-ed like to play.

Samsung is currently in late stage talks to bring Google TV to its new line of televisions. The pairing has me wondering, why?

Since its initial release and general lack of hype since then, Google TV has not been the profound change to television it needs to take off. Without it genuinely being game changing, Google TV has simply become noise in an already very crowded smart TV set, top box, game console, Blu-Ray player market that provides similar connectivity to digital media.

The best example of this noise effect is Apple TV. I say best because Apple is backed by a strong brand and a devoted cult following. Yet, even with these factors working with it, the successful Apple TV release has since slowed.

The problem? Apple TV did not change things in a big way, not even in a small way. It asked consumers to switch for something they most likely already had through another device, such as the Roku devices. And while some devoted consumers were happy to oblige, those sales will only go but so far.

The initial Google TV launch was, for the most part, a failure. It promised new and different but only ended up delivering more of the same in a new packaging. In fact, thinking about the category as a whole, any device tagging itself as a smart device is over-promising quite a bit. “Nuanced,” maybe. “Smart,” no. In my home I have a television with Internet apps, a game system, an Apple TV, a Roku player, and a Blu-Ray player, all of which connect the same services. The redundancy of the devices is a bit crazy.

I am not privy to what goes on behind closed doors at Google, so the new Samsung implementation might be groundbreaking and amazing, but my guess is it will just be more of the same.

In the meantime, I will continue to cross my fingers in the hopes that the Apple “Siri” TV rumors are true.

I have been following news about the upcoming PlayStation Vita handheld gaming system and, as its release date nears, I wonder more and more if its success will receive a similar lackluster release as the Nintendo 3DS.

The Vita is quite a technical powerhouse and looks like what the PSP should have been. And while it has an ample software lineup on release to avoid a lack of interest due of content, this new iteration is too little too late. The handheld gaming market has now expanded to include mobile phones in a very big way and the market that the Sony PSP and Nintendo DS once competed in has become vastly different.

The issues jeopardizing success are not due to a nonexistant market, but rather due to a nuanced market. In fact, the market for video games, is evident by the 24 hour, $400 million profit, Call of Duty: Modern Warfare 3 just raked in. The obstacle instead, is due to the advent of smartphones, causing the market for a standalone handheld gaming devices to become a bit redundant.

Adding to this hurdle is the young adult demographic the Vita caters to. It’s not that it doesn’t have titles for the younger audience, but with enhanced graphics, 3G connectivity, dual analog sticks, and multiple touchscreens it is certainly selling specs that an older market tends to care about. But this is a demographic that is already connected and invested in their smartphone. The key value of that last sentence being “connected.”

Take the recent success of Call of Duty. This was not a result of it having a profound story– in fact, the story is so fragmented and schizophrenic it’s sometimes hard to even get into. It did not sell so well because of groundbreaking graphics– it uses the same engine as the last Call of Duty and is certainly not the most visually stimulating game available in the market. No, Call of Duty sells because of its multiplayer. It is a game that breaks sales records and moves consoles because it offers a connected experience—an attribute that is very much an identifier of the mobile market.

Often, in both messaging and product development, companies miss the vital fact that no one switches for something they believe they already have. Sony might soon experience, as Nintendo’s 3DS has been experiencing, that the market might not have been pining for a new generation of handheld gaming systems, but instead might believe the phone that they own is the only handheld gaming device they need.

Over the past few week there have been multiple companies – reputable companies, I might add- that have fallen victim to security breaches. When I think about the tech industry, network security always seemed like a table stake, or a minimum requirement just to do business. However, with notables such as Citi, Playstation Network, Google, Sony Pictures Studios, and SecureID all recent victims of intrusions, it makes me wonder what effect it will have on each of their brands.

This recent barrage of hacks presents an obstacle for brands who have promised network protection as a table stake. Now even they can fall victim to an attack.

Yet regardless of this, a consumer whose information is jeopardized directs the fault, not toward the hackers at the end of the line, but at the hacked companies caught in the middle. In the example of Sony, it is estimated that the recent hack of the Playstation Network has cost Sony upwards of $170 million. What this estimate does not include is the cost on its brand, both for the short and long term.  Much like a product recall, the effect on a brand image following an intrusion that steals consumer information is dependant upon how well a company cleans up afterward, and its full effects might not be seen until much later.

Security breaches are strange in that if your neighbor always locked their door and was then robbed, you wouldn’t tell them “Boy, you really messed up. I thought you would have been sensible enough to have upgraded to the DoorMaster lock 2000 deadbolt lock.” No, instead the fault is directed toward the intruder who broke in. Conversely, when a company is hacked, the intruder is rarely identified and the company is deemed as being negligent.

As we continue to expand the ways in which technology reaches into our everyday lives, breaches will only escalate. It is the sad state of things that it is necessary, but companies must to treat their security with the same level of importance as their brand image. At the end of the day, success or failure of one directly affects the other.

With the emergence of Google and Apple as brands, Microsoft is threatening to become irrelevant as a technology company – or, at least, a commodity in all the areas it plays.

I have been thinking about Microsoft quite a bit lately, and there are all of the usual reasons why it’s falling behind. It is competing against two of the most powerful and meaningful brands in the world and its technologies across all areas are gaining reputations as followers.

Nowhere is this becoming more apparent than in gaming, where Microsoft’s Xbox 360 is trailing the Wii and Sony’s Playstation in global market share.

The Wii, of course, has transformed the market with its remote, active capabilities and now owns 49% of the market globally, although that’s primarily because of its dominance in Japan. The Playstation is second and the Xbox trails with 20%.

In an attempt to catch up (that is, follow), Microsoft is about to introduce the Kinect, which takes Wii’s technology one step further. This controller-free system has a camera that, according to Microsoft, recognizes faces, obeys voice commands and tracks body movements, meaning gamers will simply control the games with their bodies in the simplest fashion.

There are a whole host of difficult questions Microsoft needs to ask itself about this “innovation” – primarily, whether gamers actually want it. It’s possible it may feel more like a novelty, something I sense about the Wii as a kind of consumer fatigue sets in. I have friends with teenagers who have more than one gaming system, including the Wii, and they prefer one of the remote controlling systems.

Beyond that, is there anything in the Xbox brand that gives consumers (mostly young ones) a reflection of themselves other than as a technology follower? I ask this because Microsoft’s largest problem is that it seems to think it’s all about the technology.

It’s not. The technology simply fulfills the brand promise and, when the (former?) technology giant is following the likes of Apple, Google and Nintendo, it must reconnect with consumers in ways more meaningful than simply upping the technology ante.

Everything seems to be taking an economic hit these days and the latest loser is U.S. videogame sales.

Should this be too much of a surprise? According to industry experts it should not. They tell us that the reason for the decline vs. last year is due to “a tough comparison from a year ago” when highly anticipated deep content games like “Grand Theft Auto 4″ and “Mario Kart” were released.

Personally, I think the market has been over-saturated with users. If so, growth in the future will be more dependent on deeper penetration with current gamers than with expanding the market to new non-gamers.

While Wii still is the largest seller of consoles in the US, its growth has slowed considerably. This is just another indication of a change in the tenor of purchasers. In these tough times, consumers are making choices about what they need vs. what they want, and so the purchases of new consoles and new games are therefore resultantly slowing. 

In real terms, discretionary income has not diminished all that much. What has changed is the way we spend that cash. To those brands that develop in the psyche of what drives purchase decisions beyond just talking about new and better, there is opportunity on the horizon. However, if you play the same old marketing game, as SONY demonstrated in its earnings last week, the future is not all that bright. 

Because consumers are demanding flexibility, non-compatible formats seem inefficient and cause customers to choose from what seems to be an artificial barrier. Sales skyrocketed when Apple switched to the Intel processor that enabled Windows users to run their favorite OS natively on a Mac. The same dynamic will drive the next big winner in gaming. There simply is not room in this economy for competing platforms. Look what happened to HD DVD and Blu-ray

Therefore, it would behoove the gaming industry to follow a few easy rules in this new economy:

1. Simple is better 
2. Compatibility is preferred
3. and the consumer is definitely in charge