OnLive hit with layoffs, 'new company' to take its place, purchased by unknown 3rd party

[garyopa]

Onlive confirms it.



That's right, the Cloud gaming firm reportedly filed for 'bankruptcy'.
The company has confirmed it.
Some sources said the service will 'probably' continue, but the company as it stands, won't.

Several sources are reporting that cloud gaming firm OnLive has laid off all its staff and "will no longer exist" as it stands by the end of this Friday.

Here's a little background of how this story started:

It started with a tweet from InXile Entertainment's Brian Fargo, who bluntly stated that: “Just received an email that OnLive is closed as of today!”

This was followed by a report from Mashable based on “a source close to the situation” who claimed that “The company called an all hands meeting at 10am PDT, at which the entire staff was fired. Some staffers may be rehired as the company transitions to its next unknown iteration.”

The source added that: “Many employees blame the failure of the company squarely on the CEO — who refused to sell the company many times. There is speculation that the future company may simply be pure intellectual property play. OnLive reportedly has lots of patents covering cloud-distributed content, especially in 3D graphics.”

When asked for an official comment, Onlive itself initially 'denied' the reports.

OnLive's director of corporate communications Brian Jaquet has responded to questioning over the firm's reported closure, saying, "We don't respond to rumors, but of course not."

Jaquet has also told Mashable, "no comment on the news other than to say, the OnLive service is not shutting down". Jaquet refers specifically to the OnLive service however, and doesn't confirm or deny the layoffs.

NOW, however, all indicates that the company itself is hitting some very hard times.

Kotaku is reporting that they filed for a "form of Bankruptcy":

This morning, an all-hands meeting was called at 10 a.m. this morning where CEO Steve Perlman said that OnLive would be filing for an alternative to bankruptcy called an Assignment for the Benefit of Creditors, or ABC, in the state of California—a status that affords financially troubled companies a level of protection from creditors.

Here are the details of the "ABC" that Onlive filed today.

According to the same source, the OnLive service will "probably" continue, but "the company as it stands now would cease to exist" and "no one would be employed by OnLive".

"A subset of employees would be brought on to the company created from the remains of OnLive," Kotaku was told.

Additionally, Gamasutra reported that all OnLive staff have lost their jobs, with some being re-hired for a new company formed out a pre-packaged closure.

Here's the e-mail reportedly sent to staff, published by Fargo:

"I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone else's was included. A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service.”

And finally, Senior correspondent at IDG News Service Martyn Williams said via Twitter:

"In the last 20mins have seen three people walk out of #OnLive with leaving boxes. Still unclear what's happening inside [pic]." [pic2]

OnLive insisted the reports were not true, telling Forbes: “No, let me be clear. We are not going out of business.”

But, definitely, something BIG is going on. We will know for sure in the upcoming days.

What do you think?

UPDATE!

Engadget reports that the reason of the layoffs (at least 50 percent of the staff) is that the company is being purchased by an unknown party.

The move apparently comes as OnLive is being purchased by an unknown party. Those being kept on have reportedly received offer letters from the new company. Why the sudden move? The source believes it may have something to do with the company's massive operating costs, which we're told are around $5 million a month. Certainly those concerns line up with a story dug up by Kotaku highlighting the company's plans to file for Assignment for the Benefit of Creditors as a result of the company's troubled financial situation.

UPDATE 2!

It has been CONFIRMED that OnLive was officially sold to a new company, but will continue its service.

Here's their official statement:

We can now confirm that the assets of OnLive, Inc. have been acquired into a newly-formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive's apps and devices, as well as game, productivity and enterprise partnerships. The new company is hiring a large percentage of OnLive, Inc.'s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees. All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services.

We apologize that we were unable to comment on this transaction until it completed, and were limited to reporting on news related to OnLive's businesses. Now that the transaction is complete, we are able to make this statement.

NEWS SOURCE #1: OnLive denies reports of closure job losses (via) MCV UK
NEWS SOURCE #2: Onlive filing for bankruptcy new company to take its place (via) Kotaku

Our thanks to 'Gauss' for this news item!

[JonathanD]

I feel sorry for who ever bought it, enjoy that streaming pile of... heheheh

[Signa]

There's no reason why a service like this shouldn't exist, but in it's current form, there is little reason to use it. Bandwidth isn't good enough in America to make a service like this accessible. The average gamer is better off getting a gaming PC with a one-time payment instead of paying full price for games they will never actually have in their possession.

I suppose the same could be said for other Digital Download services like Steam, but Steam makes me feel like I own my games, because I can play them without an internet connection, and they are stored locally on my hard drive. Onlive never let you hold the data you bought.

[kneehighspy]

this is why game streaming sucks. when a company fails, you have lost all your 'purchased' titles and or investments, unless another company or entity steps up fairly quickly to take over. personally, I think this streaming idea is a flop. infrastructure isn't there to support the necessary need for bandwidth required.

also, onlive is a patent troll. created to sue any other company that may step in to have a streaming service. onlive will try to be a cash maker by surviving off patents.

good riddance to onlive.

[Battlefield]

I said OnLive was going to fail before it was launched. The reason is that it could only be a niche market, because of the high requirement of internett speed which still isnt common.

My home line could stream from OnLive with no problems, but i would never stream a game in the first place.

When the harddrices can transfer 500.GB/s, and 500.Mbit internet speed was common... It would go fast as hell.

Try again in 30 years OnLive..hehe

[tech3475]

I'm just surprised they didn't go down sooner.

[Battlefield]

I'm just surprised they didn't go down sooner.

I'm surprised too, but if i can have a guess... I think they brainwashed investors which didnt know the real world to get bucket loads of money to be able to run this company as long as it did. They should normally have died 6-12 months after launch.

I read that someone wanted to invest 2 billions in Angry Birds dev. Those people is most likely as dumb. Angry Birds will die sometime, and there is nothing left then. That company only lives to milk A.B. for all its worth. They is coming with a new game which probably wont be that big success because of the nature of the game. (My opinion).

I feel sorry for investors which looks at the wrong things when they are investing money on things they dont know much about. They also dont know that the gaming industry have a rough time ahead.

[Ahmed_p800]

I'm surprised too, but if i can have a guess... I think they brainwashed investors which didnt know the real world to get bucket loads of money to be able to run this company as long as it did. They should normally have died 6-12 months after launch.

I read that someone wanted to invest 2 billions in Angry Birds dev. Those people is most likely as dumb. Angry Birds will die sometime, and there is nothing left then. That company only lives to milk A.B. for all its worth. They is coming with a new game which probably wont be that big success because of the nature of the game. (My opinion).

I feel sorry for investors which looks at the wrong things when they are investing money on things they dont know much about. They also dont know that the gaming industry have a rough time ahead.

True, way too much money...but no brains! :/ depressing

Anyway, I guess most people expected Onlive to die eventually, it is logical, the service depends on high internet speeds + very expensive for something you somehow do not own = Why would we even bother?

I tried it, and the steaming quality sucked, I have 8MBit connection, in racing games the experience was pretty bad, lag and streaming quality dropped often, it was nothing compared to running the game locally on my PC!

Lets hope they learn something :]

[tech3475]

I'm surprised too, but if i can have a guess... I think they brainwashed investors which didnt know the real world to get bucket loads of money to be able to run this company as long as it did. They should normally have died 6-12 months after launch.

I read that someone wanted to invest 2 billions in Angry Birds dev. Those people is most likely as dumb. Angry Birds will die sometime, and there is nothing left then. That company only lives to milk A.B. for all its worth. They is coming with a new game which probably wont be that big success because of the nature of the game. (My opinion).

I feel sorry for investors which looks at the wrong things when they are investing money on things they dont know much about. They also dont know that the gaming industry have a rough time ahead.

After the .com bubble I'm not surprised by something like this, when onlive started the cloud was the next big thing so like casual gaming everyone climbed aboard even if the businesses were unsustainable.

I tried it, and the steaming quality sucked, I have 8MBit connection, in racing games the experience was pretty bad, lag and streaming quality dropped often, it was nothing compared to running the game locally on my PC!

I had a 4mbps connection at the time (no cable where I lived and that was the fastest for ADSL), Amnesia (got it for free on onlive) looked like a badly converted sub-sd youtube stream.

I would try it again now that I have a faster connection but I have the game on steam/humble bundle.

[JonathanD]

For everyone saying Onlive didn't work for them and they have a great connection (If you can stream HD content it should be perfectly fine to stream Onlive.)

The reason is your connection, or at least one aspect of it. You can have a 1Gbps connection and still have a crappy game via Onlive, latency is what kills this idea off as a service.

If you are like 800 miles away from the server your seeing what happened 800 miles away and your responses must also travel 800 miles... 1600 miles total lag even at the speed of light is more than a lot of games can tolerate. Thats not including the lag introduced with buffers in your firewall the ISP's firewalls and routers or frame relays, Onlives firewall....

Put another way, imagine if you had a SNES playing Street Fighter two and the cord for the controller was 1600 miles long. Then imagine you where playing against a buddy and his cord was only 200 miles long. Talk about a disadvantage.

[dwrecording]

My post was deleted? I came back to this post and i do not see mine anymore. Is this maxconsole or xbox forums?

[garyopa]

My post was deleted? I came back to this post and i do not see mine anymore. Is this maxconsole or xbox forums?

I see no record of a 'post being deleted'

I do see your post here:

http://www.maxconsole.com/maxcon_for...10#post1371210

There is like 4 different OnLive threads. -- Maybe I should merge them all together!

Oh, by the way, I now (recently) run the xbox-scene, so if you have a problem there, PM me and I will bang heads with the past mods!

[billysastard]

My post was deleted? I came back to this post and i do not see mine anymore. Is this maxconsole or xbox forums?

i didnt do it either, i only kill spam post and permban the poster and occasionally kill one or two of diztructors posts when they are giving intentionally incorrect information or trolling way above his normal level.

[JonathanD]

i didnt do it either, i only kill spam post and permban the poster and occasionally kill one or two of diztructors posts when they are giving intentionally incorrect information or trolling way above his normal level.

It was me I deleted it, sorry I smoked too much bath salts that night and thought his post was trying to eat me!

(Joking!!! I can't delete any posts.)