Monday, 20 August 2012

OnLive Closes After Acquisition by Undisclosed Company

Pretty sad day for a lot of employees, and probably some cloud gaming proponents as well.

Strangely this might be developing into somewhat of a theme this week, which is definitely disconcerting. You might get what I mean a little later, but for right now let's focus on the news at hand. It came to light on Friday that OnLive, a company that offered cloud gaming for computers, was shutting down. Although the company itself did not comment on the state of affairs, anonymous sources within basically confirmed that all the employees were basically told to pack up and leave.

OnLive was barely two and a half years old at this juncture, and while admittedly not offering a perfect service (streaming bandwidth intensive games can lead to a fair bit of problems after all) it was still one of the larger pioneers of trying such an approach to the service with larger scale games. Among the titles counted were Bioshock, F.E.A.R. series, Assassin's Creed series, Deus Ex: Human Revolution, and many others. All of these games could be available by subscription to the OnLive service through use of their system and controller. In a way the thing was somewhat of a precursor in some ways to the Ouya, just revolving around less indie and more big name titles.

Apparently though, the company just couldn't keep afloat. Again, according to some insiders there were rumblings of problems for quite some time:

"Anybody keeping score within the company knew that money was getting tight. There were signs of it because budgets had been slashed and there were very long holds on getting business terms signed off on... but the expectation was "oh Steve's going to go and get another round of funding. There were a few people hoping for the acquisition because that's really the end game, but if you were reasonably smart you knew that the likelihood of that was pretty low."

Things were shaky, but it seems like no one was quite aware of just the thinness of the ice that they were truly on. That's probably why the following came as such a shock:

"So there was an 'All-Hands' and we're in this big open space.. he [referring to OnLive founder, CEO, and president Steve Perlman] literally had a presentation that he pitched to us and the punch line was '…and under this variation of bankruptcy which is valid in California the company as of this moment does not exist and portions of it are being acquired by a brand new entity but what that means is all of your options are gone.'"

"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's hard to imagine the thoughts that must have been going through the minds of the employees. They are of course the ones that lost the most from this, with many of them being cut loose with little more than their last paycheck and a box to pack their stuff into.

The big question that remains is what happens now. We still don't know the nature or intent of the company that has acquired this service, and although the OnLive site is still up, whether it remains up is yet to be seen. Depending on who acquired it, and to what end, there could be a loss of many of the publishers that currently allow their games to be streamed using the service, only to be replaced with a different cadre of participants. Perhaps OnLive will no longer be a cloud gaming company at all, which in terms of what we're after is probably the worst possible outcome.

Look for posts as things further develop. I'll definitely be keeping an eye on this one.

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