OnLive Shutting Its Doors As Sony Buys Its Patent Portfolio

It looks as though OnLive's days are numbered, as the company has announced that Sony Computer Entertainment has agreed to purchase "various" OnLive assets that include the company's U.S. and international patent portfolio for cloud gaming services. The financial information and the terms of the transaction were not provided.

A press release distributed late Thursday evening said that customers will have access to OnLive's services until April 30, 2015. This will include Second Life (aka SL Go), OnLive Desktop and the OnLive Game Service. Subscriptions will not be renewed, and those that renewed on or after March 28 will get a refund.

Moreover, customers who purchased Steam games from OnLive will obviously still have those games in their library after OnLive closes its doors. Customers who purchased a PlayPass, which was essentially buying a game that's stored in the cloud, will not see a refund. These games will no longer be available after April 30, 2015.

"Following the termination of the company's services and related products, OnLive will engage in an orderly wind-down of the company and cease operations," the press release stated.

So what happened? For gamers who don't have the resources to build a gaming machine, OnLive seemed like the ideal answer to playing PC games in high definition. These games could be streamed to tablets and smartphones. A representative told Tom's Hardware that this kind of business needs the scale that only a large company like Sony can bring.

"After five years of uninterrupted service, the OnLive Game Service will be coming to an end," the OnLive site said Thursday evening. "Sony is acquiring important parts of OnLive, and their plans don't include a continuation of the game service in its current form."

"As the first-ever game streaming service of its kind, everyone who has ever played a game using OnLive has contributed to the technology and its evolution in some way," the site added. "We're immensely proud of what's been achieved and extend our heartfelt gratitude to you for being a part of the OnLive Game Service."

In addition to the PayPass model, OnLive offered an all-you-can-eat buffet of games, aka the PlayPack service, for a monthly fee. The company also introduced a new model in mid-2014 called CloudLift that allowed Steam customers to stream those games to the OnLive client: no game installs were necessary. At one point, the company also sold a microconsole and compatible game controllers.

The OnLive game service launched in June 2010 and originally cost $14.95 per month. OnLive appeared during the rebirth of PC gaming, offering a cloud solution that doesn't require hefty system requirements. Farmville, Angry Birds and other "cloud" games were at their peak in terms of popularity, and during that time, OnLive demonstrated that like those games, popular PC titles could be played anywhere and virtually on any gadget.

However, by August 2012, Steve Perlman had stepped down as CEO while the company laid off its employees and sold all of its assets for a mere $4.8 million (at one time the company was worth around $1.8 billion). A new company, also called OnLive, rose from those ashes and seemingly continued where the old version left off.

Unfortunately, given the financial troubles the company had endured over the years, the sale isn't all that surprising. However, a sale to Sony is a real eye-opener, as Sony is a company that already purchased OnLive's arch nemesis, Gaikai, back in 2012. What will Sony do with OnLive's portfolio? Merge it into PlayStation Now?

A representative clarified that Sony has agreed to acquire OnLive's 140 patents and 132 pending patents. As for what will happen to all of the equipment, operations will be winding down over the next 60 days, and the hardware will be sold. Many of the former OnLive employees may find themselves working for Sony after the patent transaction is complete.

As a former OnLive customer, news of the closure is somewhat saddening. However, this technology may be what Sony needed to stream PlayStation Now to PCs, smartphones and tablets without getting into patent-tainted trouble.

Follow Kevin Parrish @exfileme. Follow us @tomshardware, on Facebook and on Google+.

  • wolley74
    Really guys, cloud gaming is the future this time!
  • hasten
    1.8 billion. And they didn't immediately look to sell. Who was running this company, a spider monkey?? All of us knew this is a glass house due to latency and the casual Angry Birds crowd loses interest immediately. 1.8 billion. smh
  • Don Reba
    Wasn't OnLive closed in 2012?

    "For a technology which is supposedly going to completely change the way we access and consume videogames, cloud gaming is certainly having a bumpy start. The latest chapter in the saga of OnLive, the hugely ambitious and much hyped cloud service, is perhaps the murkiest yet, with the company being shut down and its assets shuffled quickly into a new company, managed by the same CEO - leaving investors and staff in the original company high and dry."
  • eklipz330
    wow! 1.8 billion? i did not know they had that sort of capital. but even after playing just cause 2, i knew it was a flop.
  • blackbeard34
    The technology is ahead of its time much like all things; especially considering the revised 'broadband' definitions. I'm sorry grandma your crappy 'dsl' is not considered broadband anymore.
  • atavax
    I think cloud is the future, how far off is a big question, but with net neutrality protected and comcast announcing plans for nationwide 2Gb/s by the end of 2015, i'm thinking sooner rather than later. I think the latency issue while important to many pc gamers, isn't as much to the philistines that think 30 fps is the fastest the eye can interpret. Nvidia is setting up hubs for cloud gaming, Microsoft has been since before the launch of the xbone. Sony needs to if they're going to be ready for the next gen. A very cheap device with a monthly subscription, which seems to be the concept, could even be very tempting to members of the master race, especially with the rising cost of videocards. If desktops weren't the more expensive option before, they're going to be with cloud gaming in the future, by a large margin.
  • velocityg4
    The technology is ahead of its time much like all things; especially considering the revised 'broadband' definitions. I'm sorry grandma your crappy 'dsl' is not considered broadband anymore.

    How does the revised definition effect anything? Beyond alerting consumers what they should expect as a minimum for broadband. It doesn't make slower plans any less capable.

    If definitions didn't change. Every Windows and Mac computer I owned since my Powermac G4 would be considered a supercomputer and they couldn't be sold outside of the US without special licensing to friendly nations.
  • coolkev99
    Reduced graphic fidelity.
    100% Dependence on the internet.
    Pay monthly or all your games go bye-bye.

    Sounds great, I can't believe it failed.
  • clonazepam
    Yeah for me, playing games on onlive was like playing with a reverse anisotropic filtering... about negative 32 or something. I gave it the "wow me in 1 hour or I'm gone" treatment way back when.
  • PancakePuppy
    I was in OnLive's closed beta before they launched. It was terrible then and I just couldn't believe it would last. I'm surprised it lasted as long as it did.