LG is adding another service to its Smart TV offering: streaming games. They won't be coming from OnLive, instead LG has partnered with competitor Gaikai to provide gaming content. Assuming they can move beyond the demo we saw here at CES 2012, the service should launch on 2012 models of LG's Smart TV lineup in the second half of 2012. Games are played with any standard USB gamepad, which plugs directly into the USB port on the TV. Both wired and wireless USB gamepads should work — so long as there's a USB dongle. Gaikai tells us that they're optimizing for low latency at all costs and not too much processing happens on the TV, which makes sense because this LG 55-inch television gives a slightly new meaning to the term "thin client." That may sometimes mean reduced image quality at the cost of latency and we did see some artifacting present on the game demo, but by and large it was on par with streaming games we've seen on OnLive.
Pricing hasn't yet been determined, so anything from per-game to free to advertisement-based gaming is likely still on the table. The game library won't be Gaikai's entire library, either, but instead a selection that LG will choose, probably based on whether or not the game can work well with a USB gamepad.