The first company to try to make a business out of streaming gameplay over the Internet will soon be shutting down its service. OnLive announced today that its servers will go offline on April 30 and that the company is selling its portfolio of patents to Sony Computer Entertainment America.

The announcement comes almost exactly six years after OnLive first announced its plans in the nascent streaming gaming space. The idea was to take in user input over the Internet, put it through a game running on high-end hardware at a centralized server location, then send back video and audio to end-user hardware that could be significantly cheaper and less powerful. The service and a $100 microconsole launched in late 2010 , but it suffered from noticeable latency and image quality issues in our initial tests.

With its pay-per-game service and a limited subscription-based streaming model failing to connect with many consumers, OnLive faced massive layoffs and a drastic business restructuring in 2012. The company soldiered on to launch a new hybrid streaming/downloadable game plan last year, though. Players who took part in that hybrid plan will still be able to play their purchased games through Steam, but streaming games purchased through Cloudlift or the older Playpass subscriptions will no longer be usable after the end of the month. OnLive will continue to exist as a corporate entity to manage remaining unsold assets such as trademarks, copyrights, and product designs.

Since OnLive launched, larger, more established companies have followed its lead in trying to stream games over the Internet. Sony purchased OnLive competitor Gaikai back in 2012 and used that infrastructure to launch the surprisingly usable PlayStation Now service last year. Sony's purchase of OnLive's patent portfolio, combined with its head start with PlayStation Now streaming, gives the company a dominant position in the console game streaming market.

"These strategic purchases open up great opportunities for our gamers, and gives Sony a formidable patent portfolio in cloud gaming," Sony Computer Entertainment VP of Global Business Development Philip Rosenberg said in a statement. "It is yet another proof point that demonstrates our commitment to changing the way gamers experience the world of PlayStation."

Nvidia dove in to the streaming gaming business two years ago with its Nvidia Grid server architecture and service. That initiative will be a cornerstone of the TV-based Shield microconsole later this year, with a two-tiered subscription that recommends up to a connection of up to 50 Mbps for the best performance.

Looking back, it seems OnLive was just a little bit too far ahead of the curve, both in terms of market readiness and the Internet infrastructure necessary for streaming games. As low-latency bandwidth continues to become cheaper and more accessible around the world, it seems likely someone will nail the correct combination of business model, game selection, and easy-to-use interface to become the industry's answer to Netflix. That company will owe a debt to OnLive for getting the ball rolling and proving that streaming gaming was something that was worth trying in the first place.