OnLive and Gaikai, the two frontrunners in cloud gaming technology, are now thrown into direct competition as both vie to sign deals with consumer websites.

Yesterday it was revealed that OnLive has signed a landmark agreement with gaming consumer site GameSpot. The popular website has agreed to splice its game reviews with an embedded demo of the game in question, according to a Venturebeat report.

This highly targeted ‘demo-marketing’ scheme was once a business model exclusive to Gaikai, which has already signed similar deals with Eurogamer and the Escapist.

But signing with the world’s second-biggest games website will be seen as a coup for OnLive, and a direct repositioning of its business to directly compete with Gaikai.

OnLive’s business has hitherto been to compete with the home platforms, both game consoles and high-end PCs. Conversely, Gaikai has focused its business elsewhere, seeking to embed game demos within a range of websites.

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Gaikai executive David Perry previously told Develop he intends to have his business offer a full game service, thus repositioning it to compete with OnLive. But OnLive, the company founded by Steve Perlman (pictured), appears to have drawn first blood.

Both companies allow customers to play even the most high-end games without the need to download, install or own any physical media. Instead, Gaikai and OnLive both connect customers to highly sophisticated server farms, where the player sends commands and gameplay data is promptly streamed back. The rapidly increasing sophistication of cloud streaming technology means that volumes of data can fly back and forth without any prohibitive ‘delay’.

Financial terms of the Gamespot deal have not been disclosed.