http://mashable.com/2012/08/17/onlive-layoffs/

We’re hearing unconfirmed reports that OnLive — a cloud gaming startup focused on bringing a console experience to devices such as the iPhone, iPad and Android phones — laid off its entire staff Friday.

According to a source close to the situation, the company called an all hands meeting at 10am PDT, at which the entire staff was fired. Some staffers may be rehired as the company transitions to its next unknown iteration.

OnLive most recently announced a partnership with Ouya, the Android-based hacker friendly game console that broke records and stole hearts on Kickstarter.

The company was preparing to launch a new connected device in conjunction with Vizio. Past conversations with the company also indicated that a focus on mobile and tablet devices would continue.

Our source tells us that many employees blame the failure of the company squarely on the CEO — who refused to sell the company “many times.” There is speculation that the future company may simply be pure intellectual property play. OnLive reportedly has lots of patents covering cloud-distributed content, especially in 3D graphics.

Wow, that came out of nowhere. Didn't know the company was in trouble.

WHAT?? I heard unconfirmed reports that OnLive was going to be The Next Big Thing!

Oh shit, the Olympic show chat let me know and Jeff pretty much said it looked like it. I never really had a sense of how they were doing, but this seems sudden.

its like 38 studios all over again.

 Unconfirmed, but if true always sucks when people lose their job. Kind of a known quantity in the video game industry though. 
I can't ever say I really expected OnLive to make it though. As cool an idea as it is, the reason it doesn't work is because the technology and internet isn't quite ready for streaming gaming- although I'm not sure in theory how that would ever work well. Unless maybe you were right next door to the OnLive servers maybe. I don't know, i never used it, Im just thinking in theory... but i don't see how that'd work on mass scale.
 
@adoggz: Why? Are there reports they didn't tell anybody that worked there they were going downhill and continued to allow them to work without pay?

Now they are saying reports of OnLive's death are greatly exaggerated.

It can't be! :(

if($rumor == true){ echo 'Holy crap! That come outta nowhere!'; }

The infrastructure simply is not even close to ready for stuff like onlive.

they came to soon

false alarm http://www.joystiq.com/2012/08/17/onlive-on-rumors-of-closure-of-course-not/

O good its false. But seriously its cool idea just the world isn't ready for this.