OnLive drops a bombshell: It no longer exists

I usually like magic tricks. Like the one where the guy waves his wand and the bunny disappears under the sheet. OnLive performed its own magic trick today, because now its gone. Except they won’t be pulling a rabbit out of their trousers. Yes, it has been confirmed after fervent rumors and speculation (that happened only just today) that the game streaming company will no longer continue to exist. All employees have been laid off and no severance package given. Its just…gone.

OnLive started out as an industry magic trick to begin with. Many will remember the GDC in 2009 when they first demoed the service, only to later reveal that the servers were actually only 50 miles away. But OnLive persisted to move forward with its dream of cloud-based gaming and soon became a would-be staple child for the movement. Gaikai was in recent memory the only other competitor to the service, but was bought-out by Sony only months ago. It stands to reason that unless some of the other major game companies had something planned up their sleeves, OnLive was set to be the only game in town for some time.

But just today the rumor hit that employees were being fired, after a tweet from industry vet Brian Fargo reading: “Just received an email that OnLive is closed as of today!”, who also forwarded the e-mail while erasing the sender’s name.

Here is the email that I received from the OnLive employee at 11:37am this morning.

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.

Later reports and testimony hit that President and CEO of OnLive, Steve Perlman, gathered employees early in the day for an all-hands meeting to explain that the company would no longer exist under a certain form of bankruptcy in California law. A now-former employee who remains annonmous recounted the event:

The most surreal part of the whole meeting is that he does the entire presentation, he gets to the end and typically at an ‘All-Hands’ meeting you clap, right? Because that’s just the right way to finish a meeting. I think because nobody knew how to react, everybody clapped. It was bizarre… because you’re clapping to thank him for taking the easy route out of the company. I think it was because everybody was in such shock that they just didn’t know what to do. So I’m sitting there laughing because I’m watching people clapping because they don’t know what else to do…

It certainly was a shock to the gaming blogosphere at large. Most of us knew well about OnLive and percieved them as doing “alright”, but never flat-lining. Reports are coming out now that the company had expenses near $5 million per month in operating costs. That’s quite a lot for a start-up that’s only been in operation since 2010.

What will come out of this whole story is anybody’s guess at this point. There has been a lot of PR and e-mails saying they are still going to be operational or that they will continue to run under a new company banner, but right now everything looks very grim. Most, if not all, staff have been laid off as of this time and it is not confirmed how much longer the service will stay alive, if at all. We’ll keep you updated on the story in the coming week.


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About Ryan Saul

Hailing from Portland, OR I work by day and blog by night. I like to consider myself a video game connoisseur, playing as many new things as I can get my hands on. Its hard to hold me down to one game for very long before I move on to the next big thing. Luckily, that works pretty well in terms of video game blogging.

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