Mashable

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.

Developing…

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

https://twitter.com/brianfargo

Well there goes the future of gaming...

http://kotaku.com/5935767/onlive-filing-for-bankruptcy-new-company-to-take-its-place

didn't last very long did they, I remember all the threads about how they would kill Sony, Nintendo and Microsoft business model in regard to gaming

They are keeping some staff (ie rehiring some) under a new name. Stream is a little a head of its time, the infrastructure needs to be expanded, especially since over half the bandwidth used in the US is from Netflix so alot of improvement is need to support more streaming companies and them to preform well.

Kotaku updated news story.
http://kotaku.com/5935767/onlive-filing-for-bankruptcy-new-company-to-take-its-place

Polygon

Cloud-gaming company OnLive is rumored to have been hit with layoffs today, according to veteran video game developer Brian Fargo, who says he's received communication from a former employee warning of the company's demise.

According to an email forwarded to Polygon from an anonymous, supposedly former OnLive staffer, the company will "no longer exist" as of today.

"I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist," reads an email forwarded to Polygon and later tweeted by Fargo . "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."

Fargo later tweeted that the original message was recalled by his source.

A follow-up tweet from Zen Studios' Mel Kirk indicates he received a similar email.

According to a report on Mashable , layoffs have affected the entire staff. A separate report on Game Front  says "the whole company, (minus some key upper management, details still not known), has been let go."

The company's official Twitter account is currently still tweeting, with no indication that there are troubles at the company.

"We don't respond to rumors and have no comment," said an OnLive representative when asked for clarification. A statement from Brian Jaquet, OnLive's director of corporate communications, refutes allegations that the company is folding, saying "We don't respond to rumors, but of course not."

"I have no comment on the news other than to say the OnLive service is not shutting down," Jaquet told Polygon when asked specifically about layoffs. "I'm sorry I cannot be more specific." In a separate statement, Jaquet emphasized to Forbes "We are not going out of business."

OnLive was first unveiled in early 2009, promising cloud-streaming of video games to consoles and PCs that offered gameplay independent of hardware capability. The company announced a partnership with open source console Ouya in July to bring its cloud-based gaming service to the platform.

Update: According to a report on Kotaku , OnLive is planning to file for bankruptcy. OnLive CEO Steve Perlman reportedly told employees "the company as it stands now would cease to exist and that no one would be employed by OnLive."

The concept is good, execution not so much. It usually takes a few false starts before a radical new business model takes hold.

But what Onlive needed was a deep pocketed sugart daddy to keep feeding it until it became profitable. So not selling to a bigger corporate was a bad move. Though I can understand why that was because of the fear that the new owner would only buy for the patents and shut down the service very quickly as being unprofitable, without taking a long term approach and developing the business model.

Though it's probably wouldn't happen. It would be nice if Nintendo or Microsoft came in and scraped them up.

Well here is a non-rumor article from Kotaku, On-live claims nothing is going to be changed/interrupted when it goes to the new company, but in the end until we hear from said company they can promise the moon.

http://kotaku.com/5935876/onlive-sold-to-newly-formed-company-vows-to-continue-service

here is the IGN article - its been updated so the title is old, it seems everything is set said and done except no one knows what company now owns it other than it is a newly formed company.

http://www.ign.com/articles/2012/08/17/onlive-possibly-being-closed-by-end-of-day

The way this will probally work out it was made by On-live when they knew they were going down the drain and are going to get the book throwen at them next week by the federal government for some sort of securities fraud.

Sad. If they go under it would be one less reason to own a Ouya. In fact, I see the Ouya going the same route.