Last Friday's onslaught of conflicting reports regarding the health of cloud gaming service OnLive left a lot of questions about what, exactly, was going on over there. This morning, we have a bit more clarity on the situation, though the news isn't all particularly good.

Venture capital firm Lauder Partners, LLC has stepped in to back the company after it filed for a form of bankruptcy in California to protect itself from creditors. Lauder will fund the new version of OnLive, which will continue operating the company's service as per usual, albeit with a much reduced staff.

More than half of the company's employees--quoted at anywhere between 150 to 200 at the company's peak--have been let go from the company as of last week. Those that are remaining will be doing so at the same salary they earned prior to the changeover. Interestingly, the press release the company sent out speaks of a "reduced compensation" as part of the deal, which implies that they are making some kind of money off of the deal. CEO Steve Perlman, however, is apparently not among those receiving any compensation from the sale.

So, ultimately, it looks as though OnLive will continue on, albeit under somewhat differing circumstances. It's perhaps good to hear that the company didn't end up having to lay off its entire staff, but the increased scrutiny this whole situation brought to bear does make one wonder exactly how viable this company's business model even is. I don't expect this to be the last thing we hear about the situation.

Last Friday's onslaught of conflicting reports regarding the health of cloud gaming service OnLive left a lot of questions about what, exactly, was going on over there. This morning, we have a bit more clarity on the situation, though the news isn't all particularly good.

Venture capital firm Lauder Partners, LLC has stepped in to back the company after it filed for a form of bankruptcy in California to protect itself from creditors. Lauder will fund the new version of OnLive, which will continue operating the company's service as per usual, albeit with a much reduced staff.

More than half of the company's employees--quoted at anywhere between 150 to 200 at the company's peak--have been let go from the company as of last week. Those that are remaining will be doing so at the same salary they earned prior to the changeover. Interestingly, the press release the company sent out speaks of a "reduced compensation" as part of the deal, which implies that they are making some kind of money off of the deal. CEO Steve Perlman, however, is apparently not among those receiving any compensation from the sale.

So, ultimately, it looks as though OnLive will continue on, albeit under somewhat differing circumstances. It's perhaps good to hear that the company didn't end up having to lay off its entire staff, but the increased scrutiny this whole situation brought to bear does make one wonder exactly how viable this company's business model even is. I don't expect this to be the last thing we hear about the situation.

Horrible situation. Hope things work out for the people let go.

Hope the other half gets new jobs soon.

It is a shame that the first thing we hear out of OnLive in a while is restructuring and layoff news. Best wishes to those that have found themselves unemployed.

it sounds like the sort of thing insanely dodgy company's do to get themselves out of trouble and allows them to continue being insanely dodgy under a different name.... think ill just continue to stay as far away from them as possible

Nice work, Job Creators™.

That's a lot of people without jobs now. Good luck to them all. Hope you land on your feet.

Does anyone here actually subscribe to OnLive's services?

Just like Alex said, I'm hopeful for OnLIve for people's jobs, but I don't know how they can be sustainable as a business. I know they are on the forefront of streaming video game services, so it makes it that much harder for them.

Expect an Onlive Vs. Gaikai/Sony lawsuit in the near future. It's one of the few plays Onlive has left, and I imagine the company that picked them up knew this.

The worst part is that for the employees of the original OnLive who don't get offered new jobs, they no longer have access to COBRA continuation health care because the old company ceased to exist. Having a gap in your health coverage can make it impossible to get health care in this country, so any employer who willfully puts employees in that situation (like 38 Studios, and now Onlive) is worse than scum, IMO.

OnLive has always been an amazing idea with less than perfect execution. The plan is sound, but our internet infrastructure just isn't being utilized properly for us to use the service the way it's meant to be used. We could have the dream of cloud gaming, but most ISPs aren't selling the kind of internet that we need for it yet, at least to households.

I just dont see onlive working out. at least not in europe with those prices.

But it could be good. in theory.

Thanks Obama...

Hope everyone there finds jobs for an employer who won't wipe the company clean.

I know I won't be paying for ongoing access to game content on servers that don't seem financially viable without screwing over the original investors/staff to exploit limited liability. OnLive: be in no doubt, everything is a rental with an unknown expiry date.

Thought it was a shame when Sony started the partnership of GaiKai or whatever, along with Gmaestop and everything... Onlive always had the best actual service where it counts, the latency and what not. Plus it doesn't have a really DUMb name like GaiKai...

I guess even if you are a great service, the first ones never stick around, so sad cause they invest SO much money up front to get the right things right (the tech), only to see tons of other services just sloppily pop up and get bought out.

First thing OnLive should have done after launching was whore themselves out clearly.

:(

DOT COMS BUBBLES

thats to bad i was hoping onlive would replace gamings pcs.

It would be nice if the whole cloud gaming thing gets figured out in some way. More options the better.

@heatDrive88: I subscribe to their OnLive Desktop app for iPad. Sometimes, you just need a flash-enabled browser or a native Office application/document. It's a paltry $5 a month for a little peace of mind...assuming the service stays functional.

@heatDrive88 said:

Does anyone here actually subscribe to OnLive's services?

Just like Alex said, I'm hopeful for OnLIve for people's jobs, but I don't know how they can be sustainable as a business. I know they are on the forefront of streaming video game services, so it makes it that much harder for them.

It's free. It's not a subscription.

They failed to market OnLive at all. I own a 360, ps3 and do lots of gaming on my PC and I barely heard about OnLive. I think I found out it was released several months after it actually was

OnLive is just too early. The internet infrastructure doesn't support it. Not yet. It's an AMAZING, really ambitious idea that I was super into. But we're just not there yet.

Still though, I hope those without work now can get back on their feet soon.

I personally think that the decision to only let 1080p access from the Micro Console is ridiculous.

The PC users should have access to 1080p as well. That's why I don't use it.

@clumsyninja1 said:

Thanks Obama...

How did Obama cause Onlive to cut half their staff? Please explain this to me.

@drewmaw said:

@heatDrive88 said:

Does anyone here actually subscribe to OnLive's services?

Just like Alex said, I'm hopeful for OnLIve for people's jobs, but I don't know how they can be sustainable as a business. I know they are on the forefront of streaming video game services, so it makes it that much harder for them.

It's free. It's not a subscription.

OnLive isn't free, you have to pay directly for a game or a monthly "rental" fee that gives access to a library of games.

I think everyone can agree that it's better for OnLive to survive with half its people losing their jobs rather than all of them losing their jobs. However, OnLive sure made it look like it was hiding something dirty by saying "everything's fine, nothing to see here, move along" rather than just being straight with everyone.

OnLive: you now look sketchy.

@shodan2020 said:

@clumsyninja1 said:

Thanks Obama...

How did Obama cause Onlive to cut half their staff? Please explain this to me.

It's a joke. The way I read it is: Obama blames everything on Bush, so now we blame everything on Obama.

I think I might start to use the word albeit more often now. I have been inspired!

Glad I shelled out for a PC instead of
Sticking with this..

1800 average users seems a bit low, i think more play APB on Steam.

I decided to try Onlive a little while ago. I think the service has some pretty awesome features, such as being able to spectate any ones games, even while they are playing single player. It also seems to run pretty smooth, but as someone who likes physical objects I would never consider buying any games on it.

I'd be all over this if the Playpack deal offered, you know, games I want to play. Golden Oldies are cool and all but they're not going to make this service shine. Don't necessarily throw the newest releases in there but try and make this a more netflix-like service and it could work.

@eternalshades said:

@drewmaw said:

@heatDrive88 said:

Does anyone here actually subscribe to OnLive's services?

Just like Alex said, I'm hopeful for OnLIve for people's jobs, but I don't know how they can be sustainable as a business. I know they are on the forefront of streaming video game services, so it makes it that much harder for them.

It's free. It's not a subscription.

OnLive isn't free, you have to pay directly for a game or a monthly "rental" fee that gives access to a library of games.

I think he was talking about the service itself, which at launch, had a monthly fee attached.

I like the idea of on-live, but have still never really used it. I love my local hardware too much I guess.

Bah, this totally sucks. I have always been impressed by the idea behind OnLive. I totally believe this is the business model of the future. But sadly I think they were a bit too soon out of the gate. The tech to sustain this is just around the corner but not widespread available just yet.

Hope everyone lands on their feet after this.

I sure am relieved that the CEO got to keep his job. :/

Wasn't OnLive supposed to ship on Ouya or at least get support down the line? I'm curious if that is being effected at all.

OUCH

What @kevingadd said.

@SortedeVaras said:

I sure am relieved that the CEO got to keep his job. :/

He'll hang on long enough for a nice, sizable golden parachute and then he'll be out the door, have no doubt.

I'll probably check out OnLive once I pick up an Ouya. I mean, Android games are awesome, colorful and instantly fun - at least, the best ones are. That's more old school style, and I dig it. But it'll be nice to dig into meaty, console style games on the console too, through OnLive. I got no problems playing in lesser resolutions because of streaming. OnLive always sounded cool, it just came at a bad time, when most gamers are already well entrenched with their PCs, Playstation 3's or Xbox 360's.

@eternalshades said:

@drewmaw said:

@heatDrive88 said:

Does anyone here actually subscribe to OnLive's services?

Just like Alex said, I'm hopeful for OnLIve for people's jobs, but I don't know how they can be sustainable as a business. I know they are on the forefront of streaming video game services, so it makes it that much harder for them.

It's free. It's not a subscription.

OnLive isn't free, you have to pay directly for a game or a monthly "rental" fee that gives access to a library of games.

Yeah, it's free to download and install, and it's free to play a demo of the game from the beginning for 30 minutes, but when you want to play the full game, you have to pay. I don't really like OnLive, it's not really that good right now, and I don't know if it'll ever be. I hope it does get better though.

This a pretty classic VC middle finger. Destroy the old company so it no longer has to pay stock options to former employees while also having none of the debt as well. You also get to get rid of all of your payroll and then rehire the people that you need at a fraction of the previous cost. It's shady as fuck and shocking that it isn't illegal. Welcome to Romney's America! No MBA left behind yada yada yada...

at least they didn't end up like 38 studios did

Well, dongs. I've always thought the technology behind OnLive was interesting and full of potential, but they never seemed to do anything really impressive with it. I understand there were probably factors mitigating development of applications that leveraged their system's unique capabilities (funds?), but I still feel like that should've been a huge focus out of the gate. Rather than trying to compete against entrenched platforms with extensive game libraries and support from major developers, maybe it would've been a better idea to develop an experience that was unique and exclusive to the service, the way Halo was for the Xbox. OnLive's hardware can do things other systems can't; the wholly server-side model, for example, seems like it could work wonders in the MMO domain. Ah, well. I have a feeling we'll see a more adventurous incarnation of this model somewhere down the road. I'll look forward to that, I guess.

maybe they'll partner with sony :)

Fuck these guys. Fire everyone just before the sale so they get nothing, then hire them right back under a different deal. Yet another company that strives to function just on the edge of what is legal without a care in the world for the 150+ people and families they step on in the process. People work there ass off for start-ups trying to build them up, and that stock equity is the reward. Then you do some underhanded bullshit like this...

@SpartanHoplite said:

maybe they'll partner with sony :)

That'd be awesome, more day 1 purchases on the PSN