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1. Microsoft and OnLive are not run by Gabe Newell
2. The time for a packet to make a round trip from your PC to your router and back should never be more than 5 MS, if even that. Which is the primary purpose of Steam's upcoming Streaming, to work within your home.
3. Since it is within your home network, there shouldn't be any serious bandwidth issues. OnLive was low quality because we all have bandwidth caps or speed caps mandated by our ISP, so 1080p gaming was close to impossible. But limited to the inside of your home network, so long as you have at least somewhat modern networking equipment, you should be able to acheive more than sufficient speeds to have high definition, quick and responsive game streaming.