OnLive drops its monthly fee permanently

In a surprising, but calculated move, OnLive announced today that it is permanently eliminating its base monthly fee.

The online-only service launched in June with a base monthly fee of $4.95 a month. Thereafter gamers had to pay for games that they purchased. OnLive also had a special introductory deal going making the first year of the service free for founding members.

Now the fee dropping could make the service more popular. Steve Perlman, chief executive of OnLive, said, “There is no precedent for OnLive, so we had to grow to a large number of active users in order to assess usage patterns and operating costs. We’ve arrived at that stage, and as we had hoped, we are able to operate OnLive without charging a fee for access.”

OnLive’s recent value was pegged at $1.1 billion.