Shakeup At OnLive Gaming Service
August 18, 2012

OnLive Cloud Gaming Service Reportedly Shutting Down

redOrbit Staff & Wire Reports - Your Universe Online

In the wake of numerous media reports Friday suggesting that the company was on its last legs, officials from cloud-based gaming company OnLive denied rumors that the company was shutting down.

According to Michael McWhertor of The Verge, the initial rumors suggested that the Palo Alto, California-based firm would be laying off an undisclosed number of employees.

Later in the day, however, various reporters and industry insiders, including Brian Fargo of InXile Entertainment, received an email from a former OnLive employee which said that the company "would no longer exist" by the end of the day and that a "new company" would be formed in its place.

The source then later issued a "recall" notice on the original tip, McWhertor said.

Multiple reporters reached out to OnLive´s Director of Corporate Communications Brian Jaquet, who has denied the rumors but has not offered too much more information than that.

Jaquet told Forbes Contributor Jason Evangelho, "Let me be clear. We are not going out of business." Likewise, he told McWhertor that he had "no comment on the news other than to say the OnLive service is not shutting down."

Evangelho said that Jaquet did not address the original rumor regarding staff layoffs, and that his brief response "does leave room for the possibility of OnLive being acquired by another company, renaming itself, or shifting the direction of its business in some fashion."

Sources told Kotaku reporter Evan Narcisse that the company was filing for Assignment for the Benefit of Creditors (ABC), a type of protection from creditors that is essentially an alternative to bankruptcy, in the state of California.

Kotaku's source claims that OnLive CEO Steve Perlman made that announcement during a Friday morning conference call, and told employees that the company would cease to exist in its current form and that all OnLive employees would lose their jobs, though according to Narcisse some "would be brought on to the company created from the remains of OnLive."

Eric Caoili of GamaSutra reported Friday that he could "confirm" that OnLive had laid off all of its employees, and that the "sudden" move was somewhat surprising as the company's executives had "given no recent indications that it was facing any financial difficulties. The company even announced a partnership with Android-based home console maker Ouya just three weeks ago."

OnLive, assuming it still exists, offers both cloud-based gaming over dedicated console hardware and online gaming over Windows-based PCs and Macs. The company was founded by Perlman in 2003 and has data centers in California, Virginia, Texas, Illinois, and Georgia. The service was launched in the UK in September 2011.