OnLive Denies It's Shutting Down, Won't Comment on Layoffs

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Cloud gaming service OnLive has denied reports that the company is shutting down. The rumor mill kicked into high gear when game developer Brian Fargo reported that OnLive was letting go of staff and closing down. Fargo said he had received an email saying OnLive would be closed as of today. "Their employees are sending out emails that #OnLive will be closed by the end of the day," he reiterated a few minutes later.

According to Fargo the original email said that by the end of Friday, "OnLive as an entity will no longer exist." This employee said that everyone was being laid off and a new company would be formed. Roughly half an hour after Fargo's first tweet went out, he reported that the author of the email he had received sent a 'recall' email.

OnLive has denied the rumors. The company said in a statement to Joystiq that it wasn't shutting down. "We don't respond to rumors, but of course not," OnLive's Director of Corporate Communications, Brian Jaquet, said. A follow up question about the layoffs was met only with confirmation that the company wasn't shutting down.

Our own Kevin Parrish got in touch with Brian to ask about the rumors, and was told:

"I have no comment on the news other than to say the OnLive service is not shutting down. I'm sorry I cannot be more specific."

So, again, confirmation that the company isn't shutting down, but no word on rumored layoffs. For what it's worth, the original email sent to Brian Fargo (and supposedly authored by an OnLive employee) said the following:

"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."

Contrary to OnLive's statement that it would not be shutting down, Kotaku cites a source that says employees were this morning told in an all hands meeting that the company would be filing for bankruptcy. Apparently, CEO Steve Perlman told staff that OnLive would be filing for ABC bankruptcy in the state of California, which would afford them a level of protection from creditors. While Perlamn said no one would be employed by OnLive and the company as it stands would cease to exist, a small number of employes would go on to work at a newly formed company. What's more, the OnLive service is also expected to continue.

Founded in 2003, OnLive announced its cloud gaming service of the same name at GDC in 2009. Since then the service has grown and now spans numerous platforms, including Windows, OS X, tablets (iOS and Android), smartphones (Android), and web-connected TVs and media players. Just this month the company announced plans to make its service available on the Ouya console. 

Further Reading

Brian Fargo's Twitter

Joystiq

Kotaku

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Jane McEntegart
23 Comments Comment from the forums
  • sacre
    Doesn't surprise me. Although the idea is just amazing, no longer would you need powerful computers, you can play all games instantly through this service.. the lag was the killer.

    I tried it, and although awesome, it sucked a LOT of bandwidth and there was always a lag with the input instantly killing all first person shooters, somewhat good for racing games.

    I don't think this service is ready for todays internet. Maybe in 10 years we'll see all internet connections at the 100mpbs+ mark, maybe then we'll see some insane gaming sessions done on crappy small laptops.
    Reply
  • beardguy
    Proof that "the cloud" still is not a plausible replacement for real hardware.

    Even if this technology were perfected, I still can't see a ton of people using it.
    Reply
  • alidan
    sacreDoesn't surprise me. Although the idea is just amazing, no longer would you need powerful computers, you can play all games instantly through this service.. the lag was the killer.I tried it, and although awesome, it sucked a LOT of bandwidth and there was always a lag with the input instantly killing all first person shooters, somewhat good for racing games. I don't think this service is ready for todays internet. Maybe in 10 years we'll see all internet connections at the 100mpbs+ mark, maybe then we'll see some insane gaming sessions done on crappy small laptops.
    you need to live within 50 miles of one of the onlive datacenters to get the best...
    raceing games are unplayable on a competitive level or the high end single player, because of lag
    fps games are more manageable, but not online, single player fps games are ok though
    where the service shines is with games that don't require precise down to the ms decisions.

    if the internet was better and they had datacenters for all major cities at least, you would probably see pc game renting become far more popular, to the point it may take a chunk of piracy out.
    Reply
  • mrkay
    Service is pretty cool on my tablet. Maybe steam should buy them up along with gamefly.
    Reply
  • robochump
    beardguyProof that "the cloud" still is not a plausible replacement for real hardware. Even if this technology were perfected, I still can't see a ton of people using it.
    Not until everyone has 20 mbps speed. OnLive is just ahead of its time and I forgot it existed until this news post...lol. I just vaguely recall some ads but nothing in the last year or so. Its too bad, hate to see good ideas fade, though I am sure PC hardware companies like Intel is all smiles....heh.
    Reply
  • alidan
    beardguyProof that "the cloud" still is not a plausible replacement for real hardware. Even if this technology were perfected, I still can't see a ton of people using it.
    with videogames, no, its not there yet.
    but lets say that someday your computer is just a hub to the internet and that's where everything happens. general computing could work as of today for the cloud, and input and lag aren't really a problem.
    Reply
  • Fokissed
    beardguyProof that "the cloud" still is not a plausible replacement for real hardware. Even if this technology were perfected, I still can't see a ton of people using it.It's more so proof that the internet has too much latency for video game input, which is really the only reason that this failed.
    Edit: also, the huge amounts of bandwidth it uses can be a problem for some people.
    Reply
  • beardguy
    I hear you guys on the latency issues etc. that made OnLive just not plausible right now.

    But I still see too many issues that will prevent the cloud from taking over even in the next 10 years. What happens if your internet connection goes out? What if your PC is literally a "dumb terminal" in the future not capable of running anything with it's own processing/gpu power? I mean you couldn't even cache your apps/games locally because your computer wouldn't be capable of handling it on it's own. There are no fail safes in place right now, it's not like you have a backup internet connection you can switch to, if it goes out you would be totally hosed.

    I just don't see it happening anytime soon. MUCH more likely imo would be a local home "cloud server" that would cache and serve up the data. This local cloud server could always be syncing with the internet cloud and when the connection drops out, you would still be good to go.

    Any technology that relies solely on a 24/7 internet connection is a fail. At least for now and the foreseeable future until we have really fast and rock solid internet connections available.
    Reply
  • buckcm
    robochumpNot until everyone has 20 mbps speed. OnLive is just ahead of its time and I forgot it existed until this news post...lol. I just vaguely recall some ads but nothing in the last year or so. Its too bad, hate to see good ideas fade, though I am sure PC hardware companies like Intel is all smiles....heh.
    It doesn't matter that much what download / upload you have. 5 megabit down is plenty for streaming the service. It's the latency that is bad.
    Reply
  • RADIO_ACTIVE
    otacon72Dear Subscriber,We're writing you today to inform you that you exceeded your bandwidth limit last month by a wide margin. If this happens again we will charge you up the ass. That's why all these streaming sites won't last. My friend tried and hated it. It sucked so much bandwidth and the lag was ridiculous.They would if ISPs build their networks to support it... Thankfully I have Surewest and they have no caps.
    Reply