Forget On-Live and say hello to Gaikai. This impressive service, led by industry veteran Dave Perry, is looking to take a chunk out of the upcoming games-on-demand market.

What's different about Gaikai? It runs right out of your browser - no box, wires, or software installation required - and they have a live demo of the service in action that you can watch below.

Gaikai Technology Demo (JULY 1, 2009) from David Perry on Vimeo

.
Read on to learn four things about this demo that might surprise you, and how Gaikai is taking a radically different approach to delivering games.

The four surprising things to note about this demo, as Perry explains on his blog,

(1) No installing anything. (I'm running regular Windows Vista, with the latest Firefox and Flash is installed.)
(2) This is a low-spec server, it's a very custom configuration, fully virtualized. Why? To keep the costs to an absolute minimum. We had 7 Call of Duty games running on our E3 demo server recently.
(3) Data travel distance is around 800 miles (round trip) on this demo as that's where the server is. I get a 21 millisecond ping on that route. My final delay will be 10 milliseconds as I just added a server in Irvine California yesterday, but it's not added to our grid yet.
(4) This server is not hosted by a Tier 1 provider, just a regular Data Center in Freemont California. Also, I'm not cheating and using fiber connections for our demos. This is a home cable connection in a home.

Rather than investing in bandwidth-intensive new technologies, Perry talks about how they're taking a more accessible and low-budget approach to delivering games:

"We don't claim to have 5000 pages of patents, we didn't take seven years, and we do not claim to have invented one millisecond encryption and custom chips. As you can see, we don't need them, and so our costs will be much less."

By now the hardware-destroying potential of services like On-Live has been fully imagined, but what Gaikai now shows is that, contrary to predictions made at the Game Developers Conference earlier this year, gaming-on-demand may be possible within the next few years.

Now the only question is, how excited are you to get your hands on something like this?