Video game specialists are likely to come under threat as a new online game distribution system emerges from the US.

Onlive allows players to stream high quality on-demand games onto any Intel-based Mac or PC running XP or Vista. Games do not have to be downloaded and no specific console hardware is needed.

KBC Peel Hunt analyst John Stevenson believes Onlive, which launches beta trials in the US this summer, represents a “material threat” to retailers such as Game.

He said: “Users will be able to play the latest games without needing to own the console or buy software. This has material implications for the games industry if the company can execute an online distribution model.

“Whether Onlive’s initial foray is successful or not, the threat of online distribution has become much more tangible.”

Onlive plans to launch fully in the US at the end of the year.

Music retailers are also under threat from digital distribution platforms. Earlier this month analysts highlighted the rise of Spotify, which allows users to listen to music free online.