[heavenlyblue]

You:

>> As far as I understand it, NVENC and the ilk are solutions that capture video output and encode it to H264. So they are x264 encoding accelerators, nothing more.

Me:

>> allowing one to stream the encoded video output to memory.

You're being pedantic. What I meant is that OnLive actually needed specialised hardware because they could not provide their service without it (as in: there was no capability in hardware, without changes to the codebase - to render not to an external display). You, on the other hand - are speaking about the conceptualised "perfect" implementation.

Google doesn't need that hardware in order to provide that service because by now there's a hardware capability that allows you to capture the screen of the device you are rendering to. They could try to be more efficient by using other hardware, but that's not a prerequisite for their Gaming Service.