BT is to bundle the OnLive Gaming Service with broadband in the UK, after it entered an exclusive agreement with the Cloud computing venture. In return, BT has acquired a 2.6 per cent shareholding in OnLive Inc.

The games-on-demand service allows for PC and Mac titles to be played without any downloading or installation, they are streamed directly to the user's computer using video compression techniques - no files are stored locally.

Additionally, as we said back in March, the service is to release its own MicroConsole TV Adaptor game system, which will plug into a conventional TV via HDMI, allowing you to play the latest games without, even, the need for a computer.

OnLive is scheduled for release in the US on June 17, after successful Beta trials, but will take a bit longer to reach the UK - with dates yet to be announced.

BT believes that this form of gaming furthers its commitment to on-demand content, as current served by its BT Vision TV platform: "Entertainment is going to be at the heart of what we offer customers in the future," says Gavin Patterson, CEO of BT Retail. "The partnership with OnLive complements our existing BT Vision service. It’s great for our customers - they’ll have access to a huge catalogue of games, available instantly on their TV or PC without expensive hardware. And it’s great for BT - it will enhance our premium broadband position and we’ll be entering into a market that’s worth more than £2billion.”

But what do you think? Do you like the idea of your games being "in the Cloud"? Or do you prefer having all the files installed on your computer? Let us know in the comments section below...