Aug 17 AT 2:24 PM jaxidian 15 Comments

OnLive not shutting down, but massive layoffs reported


The Verge is reporting that OnLive, the popular cloud-hosted gaming service, has shut its doors. This is sad news for all of the upcoming Android gaming devices that were going to support the service, such as Ouya and Vizio’s Co-Star devices.

As of the time of this posting, the official website mentions nothing of this news but since there are no employees to update the website, this isn’t exactly surprising. I’m sure the owners are busy with more important matters.

The Verge discovered that OnLive could be closing down when veteran video game developer Brian Fargo told them he received emails from former employees warning of the company’s demise. According to emails, the company will no longer exist as of today.

So this begs the question, is cloud gaming even feasible? OnLive had a pretty nice system that nobody else has really ever came close to emulating. If such a system can’t be successful, what can?

UPDATE: VentureBeat is reporting that OnLive is not going out of business but might be going through extensive layoffs that ex employees are interpreting as the company going out of business. While it’s still not clear what’s exactly going on, something is going on!

UPDATE 2: Kotaku is reporting that OnLive is filing for bankruptcy and a new company will take its place.

Via: The Verge

Source: VentureBeat

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  • Taylor Wimberly

    I have an OnLive account and controller I’ve been using on my Transformer. The service is not very good and I would not suggest it to others right now.

    Gaikai is where it’s at for cloud gaming.

    • jaxidian

      I’ve played it before on my GNex (or was that my TBolt?) and it was pretty crappy but I attributed that to it dumbing the graphics down for a phone. Are the graphics equally crappy on a tablet? Tried hooked to a TV before?

      • Taylor Wimberly

        Yes I hooked it up to a 46 inch HDTV via HDMI and it looked pretty poor. I also tested the same thing with Gaikai and it looked awesome!

    • Homncruse

      For what it’s worth, I got one of the mini consoles for free at PAX Prime last year, and I’ve played around with OnLive on my TF101 as well – the experiences are roughly comparable, with the notable exception that the mini console has a physical gamepad.

    • Department of Justice

      final nail in the coffin for OffLive

  • Taylor Wimberly

    Also, congrats on being the first thread converted into a post. We are still experimenting, so things might be wonky.

    • jaxidian

      So should I ignore the screen where I can delete user accounts?

      *eyes the twimberly account*

      • Clark Wimberly

        I assume you’re kidding, but I’ve gotta ask, since you’re the first: can you access anything now you couldn’t yesterday? Haha.

        • jaxidian

          Yeah, I’m kidding. Other than a lack of edit ability (which I assume is on purpose), all seems good from my end! Congrats on the new feature! :-)

  • Apple fan Martin Rodgers

    Apple iCloud will take over, Apple is the richest company in the world, it rulez the world!!!!
    iCloud is more powerful, trust me.

    sent from my iPad

  • MoSDeeb

    OnLive is having quite a day. If the rumors of how the layoffs occurred are true then this is a crazy situation.

  • pop

    I knew they were shutting down

  • jaxidian

    I can no longer update this article but for an update to folks, there has been another change to this story. The update is that OnLive indeed filed for “ABC” Bankruptcy, 100% of its assets were sold to a new company that will now operate under the OnLive name. Also, they’re claiming:
    1) Services won’t be affected negatively for any of its customers
    2) ~50% of the ex-employees have been re-hired by the new company as employees at the same salary level
    3) Many of the remaining ex-employees are being brought in as consultants (with hopes of hiring more of them later when more funding has been acquired)
    4) Many of the execs are taking paycuts in order to hire more employees
    5) CEO is getting paid $0 in order to hire more employees
    6) The new company should be much healthier and trimmer than the old company
    7) Investors in the original company are getting royally screwed based on my speculation

    Let’s talk about point #7 a little more. How are these investors getting screwed? Again, this is pure speculation and I could be VERY wrong, but think of it this way. A company has a cool idea, gets investors, builds up on and delivers much of the technology side of that idea. At this point, you go out and raise more money and also build up quite the credit card bill while you expand. Now fast-forward a few years later and you find a company that has a great idea with a great implementation but is running short on funds. Keep in mind that they owe a lot of money to a lot of people. So instead of paying their bills, they essentially transfer all of their valuables to another company and leave the old company lingering around with practically nothing but a huge set of bills. Now, mind you, there was some money paid to the old company by the new company to transfer these assets, but clearly it is much less than what the old company owed. So now you have (potentially although they could have been in on the deal) investors who get screwed and (definitely) banks and other businesses who offered loans to the company based on projected revenue models that clearly cannot be even close to reality since the old company’s obvious revenue model at this point is $0/yr for the rest of eternity. So these businesses offered loans in good faith that this business (OnLive) essentially said, “Oh, nevermind. We’re not going to pay those anymore but we’ll take our business elsewhere!”

    Now I await to learn more information in hopes that my speculations are all wrong. That said, this seems like a VERY nasty business practice and frankly is what was wrong with businesses before the DotCom Bust and is also what was wrong with banks before the Mortgage Bust. I, for one, cannot support such a company.

    • jaxidian

      Sorry. Source

      According to that article, an “ABC Bankruptcy” is this:

      An Assignment for the Benefit of Creditors is a bankruptcy proceeding that operates under state, not federal, law. In the proceeding, an insolvent company’s assets are assigned to an entity of the company’s choosing, rather than being determined through a bankruptcy court. The assignee is then obligated to pay the company’s creditors from money raised by selling the company’s assets.

      This sounds shady to me. VERY shady!

  • thechad