OnLive Releases Official Statement Regarding Layoffs

While we haven't seen anything show up in our inbox, OnLive reportedly issued a public statement regarding recent news that it has fired its entire staff and is preparing for bankruptcy.

On Friday evening the popular streaming games company confirmed that the assets of OnLive, Inc. have been acquired into a newly-formed company and is backed by substantial funding. The new company will continue to operate the OnLive Game and Desktop services, support OnLive apps and devices, and support OnLive's game, productivity and enterprise partnerships.

Early Friday morning Interplay and InXile founder Brian Fargo broke the news that a former OnLive employee sent him an email announcing the job cuts, a possible service closure and the formation of a new company. OnLive confirmed with Tom's Hardware that OnLive as a service wasn't shutting down, but didn't confirm or deny the layoffs. "I'm sorry I cannot be more specific," OnLive's Director of Corporate Communications added.

Martyn Williams, a correspondent for the IDG News Service, tweeted from outside OnLive's offices and said employees were walking out with moving boxes. "In the last 20mins have seen three people walk out of #OnLive with leaving boxes. Still unclear what's happening inside," he tweeted

Later reports revealed that OnLive CEO Steve Perlman held a staff-wide meeting with employees and informed them that at least 50-percent of the staff were to be cut, effective as of 4PM PST Friday -- those handed the pink slips were reportedly not offered severance pay. He also reportedly told everyone that OnLive would be filing for Assignment for the Benefit of Creditors (ABC) in the state of California -- an alternative to bankruptcy -- which protects financially troubled companies from creditors.

"A faster alternative to bankruptcy that doesn't involve the courts, it allows OnLive to deal with some of the issues it was facing, most notably an oversupply of servers for the number of users it had signed up," Engadget reports. "The ABC process allows OnLive to be unshackled from the expensive server contracts and bring in a new source of venture capital."

The OnLive "closing" rumor sparked from a comment made by Perlman during the meeting which essentially meant OnLive would cease to exist as a company, and that technically no one would be employed by OnLive. Those who would keep their jobs would be paid by the new company managing the OnLive services.

"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," OnLive's stated. "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," OnLive concluded.

Currently it's unclear who the buyer is, and who escaped the OnLive job cuts. The latest update claims the stock employees owned no longer exists, and that benefits will end after August. "There are offers of contracts to answer questions about important topics like 'where things are,' in exchange for special form stock in the new venture," Engadget reports.

We expect to hear more from the new company responsible for OnLive in the next few days.

 

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  • razor512
    That is one of the main issues with any service or drm that relies on external servers that you do not own. Your use of the content you paid for is entirely dependant on that company staying in business and still finding it profitable to run those servers.

    They also claim that purchased games are often playable for around 1 year (or less if the game is not being played by enough people)

    On live allows you to outright buy games (though their fine print states that they reserve the right to remove any game for any reason at any time without having to refund your money) (with claims like that, how could they not highly successful with their business model?)
    13
  • Other Comments
  • razor512
    That is one of the main issues with any service or drm that relies on external servers that you do not own. Your use of the content you paid for is entirely dependant on that company staying in business and still finding it profitable to run those servers.

    They also claim that purchased games are often playable for around 1 year (or less if the game is not being played by enough people)

    On live allows you to outright buy games (though their fine print states that they reserve the right to remove any game for any reason at any time without having to refund your money) (with claims like that, how could they not highly successful with their business model?)
    13
  • starcraftmazter
    More like onLAG amirite?
    6
  • CaedenV
    it is one thing to pay $8 a month for movie streaming where you can get through bulk content very quickly (and without commercials on most sites), or music streaming services which get you CD or better quality where you can listen to much more music than you could possibly purchase. Even online media purchases (not rentals) like Amazon.com are great because you get your content DRM free for a decent price, so even if (God forbid) Amazon were to fold up and go home, I would still have access to my music purchased, though the online cloud player and other perks would disappear.

    I keep away from services like OnLive for 3 reasons:
    1) if the company were to fold, I would have no recourse (thankfully this folding is being well done, but there is no guarentee that the next one will), and I would have to purchase and start over on the games I was playing
    2) while the lag is bareable where I live, it is still lag and does not compair to a local expierence. Amazing tech... but seariously not ready for prime time yet, and they need to better distribute their servers.
    3) while the price is not bad, I dobut I would get through enough games in order to make such a service worth it to me. I tend to get a game, sit down and play it for 2-3 days, then life happens and I can't sit and enjoy the game again for another 2-3 weeks, typically taking 3-4 months to beat a normal game, and a year+ to beat something like skyrim. Perhaps I would feel differently if I had a POS computer, but as I already have my hardware costs sorted, it is much cheaper for me to wait till a game is 6mo to a year old, and then pick up a GOTY edition on sale, or wait for Steam to have a good sale.

    Besides... once you buy minecraft you really don't need any other games ;)
    1