Cloud gaming firm LiquidSky raises $4 million from Samsung and tech leader Scott McNealy

Cloud gaming startup LiquidSky has raised $4 million in funding from Samsung Next Ventures, Sun Microsystems cofounder Scott McNealy, and former AOL Time Warner executive Bill Raduchel.

Cloud gaming suffered a big decline when OnLive crashed in 2012, and shut down in 2015. But LiquidSky has amassed more than 500,000 users through viral word-of-mouth marketing.

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The service lets you play a high-end game on a low-end computer or mobile device. Like other cloud game services, it runs the game in the cloud and streams a video of the game to the user. When the user does something interactive, a small amount of data goes back up to the server. But founder Ian McLoughlin, a 23-year-old who started working on the problem when he was in high school, explained in an earlier interview that his company’s approach is a lot smarter than previous versions, costs less to deploy, and provides for an infinite catalog of games to stream.

“We are thrilled to have secured the confidence and financial backing of Samsung Next Ventures, as well as technology pioneers Scott McNealy and Bill Raduchel,” said McLoughlin, in a statement issued today. “Beyond their financial support that will help us scale and grow our infrastructure, their industry know­how is invaluable in helping LiquidSky remain at the bleeding edge of cloud computing.”

Sony has launched its PlayStation Now cloud gaming service so you can play older games on the PlayStation 4, but that service has its own limitations, such as a lack of games. By contrast, LiquidSky says that you can play any PC game on its service, which is dubbed desktop-as-a-service. The LiquidSky service works on Windows, PC, Linux, Mac, and Android.

It may be hard to believe, but the young McLoughlin came up with a streaming protocol that is more efficient at handling cloud gaming. It was so interesting that Scott McNealy, former CEO of Sun Microsystems, funded the project and even convinced McLoughlin to drop out of school to do the startup. Now McNealy, Raduchel, and Samsung have stepped up to lead the round of investment.

In the past, McLoughlin said that previous services suffered from high latency (long delays between interactions) and high costs. Scaling up to support lots of users was expensive, as it required a graphics card in every server to support a single user when OnLive was debuting its service. Now, a single Nvidia graphics card can support 128 users on a cloud service.

And while OnLive had to cut licensing deals with publishers one-by-one, LiquidSky has an unlimited number of PC games that it can run, since it doesn’t require developers or publishers to modify the code in any way, McLaughlin said.

LiquidSky explains its service by telling customers that they can access their very own cloud­-based “SkyComputer,” ­a dedicated high­-end Windows gaming PC with up to a terabyte of online storage. This SkyComputer is in the cloud, not in the user’s home. And you can access it from anywhere on any device. For non-gamers, the attraction would be a “desktop-as-a-service.”

Samsung sees promise in offering Windows PC games and other apps on mobile devices.

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“LiquidSky has the potential to open up an entirely new phase of the cloud — true real­time, low­latency computing,” said Gus Warren, managing director of Samsung Next Ventures, in a statement. “This could present significant opportunities for our business units, and we’re thrilled to support Ian and his team as they officially launch the platform.”

LiquidSky customers may play any PC game or high-­performance by “downloading” it to the SkyComputer. They can choose games from distribution portals like Steam, BattleNet, Uplay, and Origin. LiquidSky also doesn’t have to buy or build its own custom servers. In a deal with IBM, LiquidSky can access new servers on demand as the traffic requires.

Each user needs about three megabits per second to 12 megabits per second bandwidth. In the U.S., that’s not so hard to do, and in many countries, even mobile networks can handle that.

LiquidSky says it can offer low-latency streams with resolutions up to 1080p at 60 frames per second. LiquidSky also supports all major USB controllers, including Microsoft’s Xbox PC controllers, webcams, USB storage devices and microphones, delivering a smooth desktop-­like gaming experience through cloud technology.

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McLoughlin came up with the idea as he searched for a good cloud-gaming service. He was soon joined by Wayin founder Scott Johnston. Together, they recruited McNealy and Bill Raduchel, who became LiquidSky’s chairman. McLoughlin’s company has been around, operating in stealth, for more than three years.

LiquidSky has a couple of ways to pay. Customers can buy access on a pay-as-you-go plan for as little as 50 cents a SkyCredit, for about one hour of play, with a 10-credit minimum purchase. The company also has a subscription fee of $15 a month for 500 gigabytes of storage and 80 hours of play, or $40 a month for 1 terabyte of storage and unlimited time to play.

LiquidSky is still in closed-beta testing. The company will demo the technology at TwitchCon 2016 in San Diego, Calif.