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Last updated on April 18, 2014 at 1:21 EDT

OnLive Lays Off All Employees; Will Restructure Under New Investor

August 19, 2012

redOrbit Staff & Wire Reports – Your Universe Online

Officials with cloud-based streaming video game service OnLive have confirmed that nearly all of the company’s staff have been laid off and that the company had been acquired by an unidentified buyer.

The announcement comes in the wake of widespread rumors that the company was on its last legs, cutting the bulk of its work force and filing for a form of protection from creditors in California. Those rumors began when an anonymous OnLive employee contacted industry insiders, claiming that the company “would no longer exist” by the end of the day Friday and that a “new company” would be formed in its place.

Initially, OnLive´s Director of Corporate Communications Brian Jaquet denied the rumors, insisting that the company would not be shutting down but offering few other details. Finally, later in the day, the company contacted Matt Burns of TechCrunch, issuing a statement that said that they could “now confirm” that the company’s assets had been “acquired into a newly-formed company ” that is “backed by substantial funding.”

The new firm “will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive´s apps and devices, as well as game, productivity and enterprise partnerships,” the company promised, also telling Burns that “a large percentage” of former OnLive staffers would be re-hired, than “substantially” more employees would also be added, and that “all previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services.”

Ken Sweet of CNNMoney called it “a startling turn of events” for OnLive, which was originally founded by Perlman in 2003 and been operating data centers in California, Virginia, Texas, Illinois, and Georgia.

The company has not filed for bankruptcy, Sweet and Kotaku reporter Evan Narcisse explained. Rather, they are reportedly filing for Assignment for the Benefit of Creditors (ABC), a different form of protection from creditors, in the state of California.

“Like earlier reports suggested, it sounds like OnLive Inc. was dissolved and a new company, OnLive Inc 2 or something of the sort, will continue in its place and is likely backed by new investors,” Burns said, adding that despite the statement’s reassurances that a considerable number of former OnLive employees will be invited to join the new firm, “there´s no word on if the original employees completely lost their equity.”

“No matter how OnLive spins this move, it´s still looks shady to me,” he added.


Source: redOrbit Staff & Wire Reports - Your Universe Online