OnLive MicroConsole official at $99, we go hands-on and bombard you with details

Everybody's favorite instant streaming video game service just came into its own: OnLive is launching the MicroConsole right now, a tiny box that turns your Speedy Gonzales internet connection into a virtual game console. Sure, the company's cloud computing service already lets you do the same from any old netbook -- that's kind of the point -- but the $99 OnLive Game System gives you the leanback HDTV experience complete with a custom wireless gamepad, and (assuming you use HDMI) it'll come with all the wires too when it ships December 2nd. We sat down with OnLive VP of Engineering Joe Bentley to get a handle on the hardware within, and learn about the budding ecosystem you'll be dealing with if you buy in. See what the long-awaited system looks like below, and get the full scoop after the break!

If you're a little rusty on what OnLive's all about, it works a little something like this -- giant server farms process the games far away, then pipes the rendered images (using proprietary compression technologies and custom hardware) straight to your screen. The MicroConsole grabs that stream using a standard 10/100 ethernet connection, decodes it and upscales it all the way up to 1080p using a custom SOC, and outputs the resulting images to your TV at up to 60fps over HDMI 1.3. (There's also an optional 1080i component video cable available for an extra $30.) Like the PC version, the technique introduces noticeable video compression artifacts, but not as much lag as you'd think -- we had a perfectly playable session of Unreal Tournament III today (by console standards) on an admittedly excellent connection. The system presently supports only stereo audio over a 3.5mm minijack, optical S/PDIF or HDMI, but surround sound is on the way; Bentley says a firmware update next month will bring at least basic LPCM 5.1, if not necessarily your favorite flavors of SRS, DTS and Dolby. Unbelievably, Bentley claims the entire system uses just six watts under full load, thanks to an underclocked chip, and sure enough the rock-solid unit has no fan or even so much as a vent to exhaust heat from within.

As it turns out, the MicroConsole doesn't technically use ZigBee, though it most certainly takes advantage of IEEE 802.15.4 -- that's the underlying RF technology that connects the console's custom wireless controllers. Bentley told us that when the company decided latency was paramount, it was the only way to go, with 2.4GHz too saturated and Bluetooth too slow -- though admittedly we've rarely heard Microsoft or Sony complain about either one. Regardless, OnLive built a custom software stack for 802.15.4 that responds in 800 microseconds flat, or under 2ms when or if you've got four controllers paired at once. We were immediately impressed by the build of OnLive's gamepads, which feel first-party through and through, with buttons and analog sticks not quite as ergonomically fine-tuned as Microsoft and Sony's best, but constructed out of quality plastics and with a pair of excellent triggers, as well as a set of dedicated media buttons on the bottom row. Like Microsoft's Xbox 360 pad, these ship with a pair of AA batteries but you can also buy a rechargeable 2400mAh lithium-ion pack for $20, which is reportedly good for 36 hours and charges using a standard microUSB port. The company won't be selling extra pads until December 1st, the day after the system ships, but you can also plug in any old mouse, keyboard or gamepad (including an off-the-shelf Xbox 360 controller) into two front-facing USB ports and start playing right away. There's also built-in Bluetooth to connect wireless headsets though the firm doesn't have a final compatibility list yet.

The hardware's pretty badass from what we can tell, but the service is still struggling to build out -- it launched with 23 games in June, and it's only up to about 40 now. Though membership fees have been dismantled and WiFi works now, the only figure the company can share about adoption is that there have been "two million sessions" of OnLive played on Mac and PC so far, and some are wary of spending full price for a PC game that one can't actually download -- even if said service comes with 30-minute demos and game rental options. That said, the future's looking far more bright, as Bentley tells us there are presently 100 more games in the pipeline, all of which are slated to appear before the end of 2011, and the company's adding about a game a week right now. OnLive's getting Driver: San Francisco, Deus Ex: Human Revolution, Ghost Recon: Future Soldier, FEAR 3, Duke Nukem Forever and Assassin's Creed: Brotherhood, to name a few, and it's actually planning a Netflix-like flat rate pricing plan for back-catalog and indie games as well.

Speaking of Netflix, Bentley told us that those media buttons on the OnLive controller aren't just for show -- while he wouldn't confirm any particular multimedia partnerships, he said "It's technically all possible, and with time we'll bring all that forward." He also informed us we'll see iPad, iPhone and possibly even Android apps to let you keep track of friends (and dastardly rivals) in OnLive's video-based social network. Further down the road, the MicroConsole will apparently even have 3D gaming support, as the company's figured out a way to encode and decode a pair of discrete video streams with this very hardware.

We're working on a full review of the MicroConsole and its accompanying controller and hope to bring that to you soon, but if you want a jump on things you'll find a perfectly sensible write-up from our friends at Joystiq, too. And of course, for all you early adopters, the time to buy is always now -- through the end of the year, the system comes with a free game of your choice as well.