After 15 months of what founder Steve Perlman cheekily labels 'beta testing' in the US, OnLive has arrived in the UK bringing cloud gaming and, despite denials, a whole new competitor for the likes of Xbox 360, Nintendo's Wii and the PS3.

Any introduction to OnLive needs to delve a little deeper into what the service actually is, something that both the company itself and launch partner (and shareholder) BT will be at pains to do as people begin to look at what cloud gaming offers.

Check out our Hands on: OnLive video to see what we think about the service:

For traditional consoles, device and PC gaming, the gaming runs locally - ie on that gadget, be it the PS3, a MacBook or even an iPad. That means that the game's data lives on that device's storage, and every button you press or swipe you make is processed and is acted upon on the device.

Server

Cloud gaming stores the game on a server in a server farm and instead of the game running on your device it runs on that virtual computer. You are connected to that virtual computer via a broadband link - from your tablet, phone, computer or a box that sits under your television.

So every time you send an instruction (like shoot, or look left, or jump) it is sent as a data package along your broadband connection and processed by the server. That server then sends you a streaming video of what is going on via your internet connection.

There are many benefits to this service, and a fairly obvious drawback or two, but we'll start with the advantages.

First of all, you don't need to install, update or patch any of your games. All of the software is updated by OnLive on its server direct, which means that when you log on you can start playing pretty much immediately.

You also don't need to have a console or update your PC to play the latest games; you can buy them (or buy access to them) on OnLive and they are there and ready.

The cloud can feasibly offer up much more processing power than the average PC or console as well - particularly taxing complicated processes can use the power of cloud computing to expand to more than one server.

Also, lower powered devices like tablets and phones can be used to play games that would be beyond their capacity to play because all they need to do is stream the video and send the user instructions.

But there are some issues that may be dealbreakers for some people; the first being that you need a steady and fairly quick broadband connection to get the best service.

Secondly, you may have to play the game at slightly lower settings than you would choose to if you were sat next to an uber gaming PC and last, but very much not least, is the problem of latency or lag.

Latency is, essentially, the amount of time it takes from you pressing a button to that action happening on screen.

All consoles and PCs have a degree of latency, but OnLive is having to send your data and the streamed video a lot further than your local devices and therefore it has more latency.

However, OnLive boldly claims that its beta testers in the UK thought that the service (at least on slightly older and less demanding games) was akin to console performance, so TechRadar's first task was to consider if that is actually the case.

We tested OnLive on a non-fibre optic broadband package and a 50MB fibre optic connection using the same equipment so that we could monitor the difference.

Design quality

It's immediately clear that this a beautifully designed product - well packaged, well thought through and designed with mass-market appeal.

Having gone through the simple sign-up process and bought our first game: Deus Ex: Human Revolution naturally (on offer for a pound), we checked out the television kit first.

This consists of a small set-top box which is called the micro-console, a wireless controller and all the necessary extras - including an HDMI cable and batteries.

The controller is actually very nice; perhaps falling short of offerings on Xbox 360 and PS3 but certainly nicely built and well fitted to TechRadar hands at least.

Equally the microconsole is small enough to hide away and is by no means hideously ugly.

But the proof of this particular pudding is in the testing; how do the games play, and will people regret signing up.

First and foremost, there's plenty on offer even for people who don't want to splash out masses of cash. The idea of a rolling subscription pack of 100 games for £7 a month is clever and, we're sure, will be a popular option, and buying a first game for a pound feels like an immediate bargain.

Spectating other people is odd but quite satisfying and a lot of the community tools (like brag clips) could prove popular.

The key factor is, of course, performance. Does the inevitable lag spoil the games? How does it perform on a superfast fibre optic line and how does it perform on a fairly typical bog standard broadband connection of around 6Mbps average.

OnLive performs surprisingly well - and although it is pushing it to say that it is akin to a console, it certainly isn't a million miles away.

Indeed on a fast connection games are actually very playable. For the hardcore gamers the lag may well be a big problem; quick fire accuracy in Deus Ex was tricky, with the movement delay making it easy to under or over shoot your target.

But on older less taxing games or ones where split-second timing and pinpoint accuracy are less critical, the lag is barely noticeable and the playability is good.

On a more mediocre connection things are less wonderful - inevitably - but even then you can see a valid reason for signing up. This is a great reason for going for a fast broadband connection, and that's no bad thing.

Despite going into this with a fair degree of cynicism, the early signs for OnLive are good. A tie-up with BT is strategically impressive, and the service is far, far better than we had any right to expect.

Being able to play your favourite games on less powerful devices is an awesome concept, and if that means sacrificing a modicum of accuracy then many will take it. Of course being able to seamlessly jump from lagless local play to an okay experience in the cloud will be a massive step.

But in the meantime, this feels a lot like the first tentative step on a thrilling gaming journey.

We will have a full review of OnLive going up soon on TechRadar.