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OnLive Files For Bankruptcy, Forms New Company

FOURTH UPDATE: Joystiq have since updated with the information Perlman relayed to OnLive staff yesterday: “I’ve been a non-stop fundraising machine,” OnLive CEO Steve Perlman told his entire staff yesterday morning. “And I finally got to the point where I just could not bring in enough funding to carry this thing forward.”

While Perlman did not reveal who has purchased the company’s assets he did say that the assignee is: “an extraordinary guy” and a “very accomplished and well known venture capitalist” who is “very wealthy.”

THIRD UPDATE: A Joystiq source has informed the site that the new owner and investor of the company that was formed from the ashes of OnLive is an individual who was “impressed” by what the company was trying to do.

Joystiq has recieved an audio recording of the meeting where OnLive’s closure was announced to staff, as well as a conversation with a n individual close to the matter.

Another Joystiq source has stated that OnLive CEO Steve Perlman showed “no remorse” at the meeting. “Steve said he was very, very sorry and shouldered all the blame at the company meeting this morning.”

“Steve has always worked harder than anyone at OnLive and therefore has my respect as well as many others within the company,” the source continued.

SECOND UPDATE: VentureBeat has confirmed that OnLive has been sold to another company. The site quotes a spokeswoman for  OnLive’s CEO, Steve Perlman, as saying in a 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.”

There is still no word on who has purchased OnLive or what the new company will be called.

UPDATE: Engadget have now said that OnLive has been taken over by an – as yet – ‘unknown party’ and that at least 50% of the staff have been let go.

ORIGINAL STORY: OnLive, the online streaming service, has made all staff redundant and is closing according to multiple websites.

A tweet from Brian Fargo – of InXile Entertainment – said “just received an email that OnLive is closed as of today!”

While IDG News Service’s Martyn Williams also took to twitter saying: In the last 20mins have seen three people walk out of OnLive with leaving boxes. Still unclear what’s happening inside.”

Mashable also went to report from “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 is said to have 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.”

Joystiq quotes the company as saying “the OnLive service is not shutting down,” while Jim Reilly – Game Informer’s news editor – tweeted: Onlive: “We don’t respond to rumors and have no comment.”

However Kotaku reports that the company has filed for bankruptcy with gamasutra also claiming that all staff have been let go – though the site goes on to state that some have been rehired to form a new outfit.

Fargo released the email he received which reads:

“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.”

While rival Gaikai, now entirely owned by Sony, had always looked to become an acquisition target OnLive has been adamant that it would remain independent. At this point in time OnLive continues to insist that all operations are proceeding normally but it does seen unlikely.

 



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