[ALL] OnLive Bought Out, Fires Half of Staff

[padman59]

We’re hearing unconfirmed reports that OnLive — a cloud gaming startup focused on bringing a console experience to devices such as the iPhone, iPad and Android phones — laid off its entire staff Friday.

According to a source close to the situation, 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.

OnLive most recently announced a partnership with Ouya, the Android-based hacker friendly game console that broke records and stole hearts on Kickstarter.

The company was preparing to launch a new connected device in conjunction with Vizio. Past conversations with the company also indicated that a focus on mobile and tablet devices would continue.

Our source tells us 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.

Developing…

http://mashable.com/2012/08/17/onlive-layoffs/

I'm interested to see if this turns out to be true.

UPDATE: An OnLive rep is denying that they are shutting down per Joystiq.

http://www.joystiq.com/2012/08/17/onlive-on-rumors-of-closure-of-course-not/

UPDATE2: Alleged email that started everything:

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.

It has been an absolute pleasure working with you and I’m sure our path with cross again.

http://www.twitlonger.com/show/it6ddh

UPDATE3: "At least 50%" of OnLive staff being let go. OnLive bought out by unknown party.

http://www.joystiq.com/2012/08/17/onlive-losing-at-least-50-percent-of-staff-purchased-by-unkno/

[Twigg4075]

So, Gaikai>On Live I guess? Sounds like Sony acquired the right company.

[jms493]

So, Gaikai>On Live I guess? Sounds like Sony acquired the right company.

I tried Gaikai and that shit was sweet

[padman59]

So, at least half the staff is expected to be let go, and an unknown party has bought OnLive.

[Twigg4075]

I tried Gaikai and that shit was sweet

I think Wombat from CAG said it's much better than On Live as well.

[padman59]

From what I understand, Gaikai has a better solution for dealing with latency than OnLive, and that's really the largest hurdle for cloud gaming.

[Swarley]

OnLive Entering A Form Of Bankruptcy

OnLive is not shutting down, as we reported yesterday, but it is entering a form of bankruptcy known as Assignment for the Benefit of Creditors, or ABC, that changes the structure of the company dramatically.

In summary, the company in its entirety is given to an assignee, be it a person, persons, or an entity, as a new company so that they or it can relieve the company's debt and make sure creditors are paid off. This is why OnLive saw a huge amount of layoffs yesterday. Some of those employees who were let go are being brought into the new company, but not everyone.

OnLive's CEO Steve Perlman said that much of the problems with OnLive came from the company's rapid expansion as a young company. OnLive is still new technology, and there was no way of knowing how many servers would be needed to run the network, so OnLive bought thousands of them, which all needed to be maintained. Perlman said, "If you've got 8,000 servers and 1,600 users, how could we ever get to cash flow positive, right?" The user-base simply hasn't caught up with the number OnLive was prepared to support.

Perlman recognizes the unfortunate current state of the company saying to his employees, "I'm the one that brought you here. I'm the one that ultimately made decisions. And I'm the one that ultimately takes responsibility. So I am sorry, and it didn't end up exactly as we'd hoped."

If you are a member of OnLive, the service will not stop. The restructuring and changes in management really only affect the behind-the-scenes of OnLive, so to speak.

http://www.gameinformer.com/b/news/archive/2012/08/18/onlive-entering-a-form-of-bankruptcy.aspx

[CCBrink]

I had never even heard of Gakai before Sony acquired them.

[leaffan]

From what I'm reading whoever the peeps were in charge were either holding out for someone to really pay them off in terms of a buyout or they were subborn and thought they could make it without it.

[padman59]

From what I'm reading whoever the peeps were in charge were either holding out for someone to really pay them off in terms of a buyout or they were subborn and thought they could make it without it.

I read the same. A lot of people at OnLive got excited when Sony paid $400m for Gaikai. There's also a rumor that the execs were going to wait and see how Gaikai progressed before claiming patent infringement and trying to get a big settlement.

[Cornelius]

Whatever the case may be, I'm sure it wasn't a huge surprise by the staff. When your company is about to fail, it's pretty obvious.