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OnLive files for bankruptcy, acquired by company, lays off staff

By Rohit Ramesh on Saturday 18th of Aug 2012

OnLive is the popular cloud video game streaming service, which uses a revolutionary concept involving rendering the game on dedicated machines elsewhere and streaming them onto devices/PCs elsewhere, all with a super fast and low-ping Internet service. However, only yesterday did OnLive lay off almost all it’s staff, and file for bankruptcy.

In a surprising move today, OnLive issued the following statement to TheVerge following their buyout by an undisclosed buyer:

“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.”

 Also, popular IDG News reporter Martyn Williams tweeted:

“Confirmed: employees leaving #OnLive headquarters with moving boxes. Am outside now.”

OnLive, the cloud video game streaming company and the first of it’s kind looked to be doing well. With over 2 million users, everybody did think they were doing well. But, the truth comes out sooner or later. Apparently the company had only about 1,800 concurrent users. So much for the registered 2 million users, they were hardly ever active. And now the company has been bought by an undisclosed buyer, with almost 80% of the original staff laid off. OnLive hardly employed 180-200 people, so about 40-50 of them remain, most probably those in the core team and engineering who are essential to continue providing this service.

On the other hand, Gaikai, the higher quality (higher in-game settings) duplicate of OnLive is flourishing. It’s recent acquisition by Sony only speaks about how much potential this technology held. Hence, it is sad to see OnLive in such a state.

Meanwhile, OnLive CEO Steve Perlman promises to protect OnLive’s patents against Gaikai. Joystiq’s source, who was also let go in the morning says with confidence:

“I guarantee that some time in the future, Steve is going to go to court and sue the shit out of them for stealing our ideas,” the source said.”

As of now, OnLive’s service will continue. We are eagerly waiting to see who the new owner is, and how the company gets restructured. More so, how it will prevent such a situation from occurring again, increasing it’s concurrent user base and fighting to stay relevant against Gaikai.

This article will be updated if and when more news gets revealed.

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