OnLive service in danger

Quote:

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Source: OnLive undergoing buyout in wake of dire financials, laying off 'at least 50 percent' of staff

After a lot of back and forth from the rumor mill and official OnLive channels, we now have what we believe to be a far clearer view of precisely what is happening right now at OnLive headquarters in Palo Alto. We've spoken with a (now former) employee of the gaming service who ran down today's events for us. According to the account, a meeting was held at OnLive's offices at 10AM this morning, wherein the company's CEO announced a massive staff layoff -- at least 50 percent of the staff, according to our source's numbers. The layoffs come as part of across the board cuts to the company, and all those out of a job will have their key cards deactivated as of 4PM local time today. The source was understandably baffled by the abruptness of the news, along with the added blow that no severance will be offered and stock holdings are essentially worth nothing.

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. We're still gathering information as to the nature of the buyout.

Update: According to our source, the writing wasn't on the wall at the company per se, but OnLive had reportedly been entertaining acquisition offers ahead of the news from companies including HP.

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Source

...that's kinda surprising. I thought the service was novel and unique and that the company was doing well.

Just saw this a few minutes ago, actually. Never dealt with it though, so no idea what this means for the industry.

They're officially bankrupt, btw.

And fired everyone. I think that qualifies as more than "in danger".

Kotaku is reporting that they were bought by a "newly formed company".

http://kotaku.com/5935876/onlive-sol...ntinue-service

Forbes said similar;
http://www.forbes.com/sites/jasoneva...t-of-business/

It sounds like the layoffs were just a part of the motion of things. They go on later to state that they will be rehiring a good portion of the OnLive staff at a later time.

Spoiler

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.

http://www.forbes.com/sites/jasoneva...g-acquisition/

I like the latest summary;

http://www.tech-stew.com/post/2012/0...in-OnLive.aspx

Or as Slashdot put it;
"This effectively means that OnLive was essentially bought out by OnLive, or rather, more specifically, one of their original investors in the company who backed the startup back in 2009."