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OnLive was unveiled at the Game Developers Conference in San Francisco and aims to deliver the latest games instantly, on any TV via a MicroConsole.

It will deliver high-definition gameplay from remote data centres to gamers with broadband connections, by-passing the need for traditional disk-based consoles marked by Microsoft, Nintendo and Sony.

Warner Bros has invested in the system and it has said it has the backing of significant publishers.

The service aims to eliminate piracy by making it easier and cheaper to download games. The company has pledged to share revenues with traditional retailers and pass on savings to consumers who will by paying less in royalties for using the console makers' platforms.

However OnLive's business model could pose a threat to console makers and retailers selling software for consoles.

The technology allows the most basic PCs and laptops to play fully featured games using free software that plugs into web browsers.