Sat, Aug 18, 2012 | 15:17 BST

OnLive denies closure rumor as massive round of layoffs occur

OnLive’s the recipient of the latest rumor du jour, as an email stating it’s closing down has been sent to Polygon and a high profile developer; however, VG247 understands that a large round of layoffs are happening, with only key, upper management positions remaining unaffected.

A supposed, anonymous, former-OnLive employee emailed Polygon, stating that the firm would be closed down today, and that it would resurface as a “new company.”

The email was also sent to Wasteland 2 lead Brian Fargo, first broken by Mashable, who posted it on Twitter:

“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.”

Fargo noted he received a “recall” notice a few minutes after the email from the supposed former employee landed in his inbox.

The email sent to Polygon stated, basically the same thing.

When asked for a response by Polygon on the news, a representative for the firm said: “We don’t respond to rumors and have no comment.”

OnLive’s director of corporate communications, Brian Jaquet, added: “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.”

When pressed on the matter by Forbes, Jaquet said: “No, let me be clear. We are not going out of business.”

However, GameFront has been told by a reliable source at OnLive that a massive round of layoffs have occurred at the firm, with only key executive and management positions remaining unaffected.

Whether there was indeed a massive round of layoffs occurring, Jaquet replied to Polygon: I’m sorry I cannot be more specific.”

Meanwhile, a source close to Kotaku has told the site than a meeting was held this morning headed by CEO Steve Perlman who told employees the firm had filed for ABC bankruptcy (basically Chapter 7) in the state of California. What this filing means is “the liquidation of an individual’s non-exempt assets to settle debts with creditors.”

Perlman said that the company “would cease to exist and that no one would be employed by OnLive,” while a “subset of employees” would be brought back into the company which would formed from its remains.

27 comment-trail-alt Posted in: Jobs, OnLive, Rumour
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27 comments

#1

LuLshuck
17/08/12, 8:33 pm

lulwut

#2

Ercarret
17/08/12, 8:37 pm

IT’S THE END OF THE WORLD AS WE KNOW IT!

Or not.

#3

Namdead
17/08/12, 8:38 pm

What is going on with OnLive? This is just nuts.

#4

Sylrissa
17/08/12, 8:45 pm

Onlive never appealed to me anyways, being with a limited speed and downloads interest where I live, on top of the fact that I prefer to own my games physically, though I’ve come to be okay with buying direct from dev’s sites, or from places like GOG, and to a lesser extent steam.

#5

Phoenixblight
17/08/12, 8:53 pm

Its what happens when you don’t have investors like EA< and Dell like Galkai did.

Onlive wasn't going to get anywhere without support from the publishers or devs which in turn leaves little to no support from the consumer.

#6

Ercarret
17/08/12, 8:56 pm

Huh, seems to be more serious than I first thought. Gamasutra reports that everyone at the company has been laid off and Kotaku says they’re filing for bancrupcty. Seems strange to me. They haven’t had it rough, have they? I haven’t heard anything like that, anyway. I thought their future looked pretty bright.

#7

Stephany Nunneley
17/08/12, 8:57 pm

More and more sources coming out of the woodwork – story has been updated.

#8

Ercarret
17/08/12, 9:04 pm

What does “ABC bancruptcy/Chapter 7″ mean?

#9

Ireland Michael
17/08/12, 9:07 pm

Cloud gaming. It’s the future!

#10

Stephany Nunneley
17/08/12, 9:08 pm

@8 “the liquidation of an individual’s non-exempt assets to settle debts with creditors.”

#11

ejams
17/08/12, 9:14 pm

If OnLive were to shutter, what would happen to all of the people who bought games/passes or whatever on the service? Would they just get the shaft too?

#12

freedoms_stain
17/08/12, 9:15 pm

Naturally when a company hits the shit pan it’s highly logical to sack everyone except the upper management.

#13

Ireland Michael
17/08/12, 9:18 pm

@11 Yup, basically.

#14

OlderGamer
17/08/12, 9:19 pm

That is why I am worried about where I buy my digital games. I don’t mind a pay as I play type model, but to pay someone for something I could own somewhere else, it is hard to swallow.

#15

Phoenixblight
17/08/12, 9:20 pm

@11

Yep thats exactly it. You don’t own the games you bought from the service. You were just leasing it for 3 years.

#16

Ireland Michael
17/08/12, 9:21 pm

@14 Dude, you’re the one who keeps touting this stuff as the way of the future.

If this is true, wow… Wasn’t a very long future. I know the bubble worth burst on this crap eventually, but I didn’t think it would be *this* soon.

@15 Or as long as the service was going, as long as people kept playing them. Guess that won’t be an issue much longer…

#17

OlderGamer
17/08/12, 9:25 pm

Cloud is the future. But today is today. The future isn’t here yet. I used OnLive, but I never bought anything from them. I use Steam for that. Hence what I said about being careful of where I bought games.

OnLives bizz model was flawed, and I have said so often.

#18

Ireland Michael
17/08/12, 9:29 pm

@17 Then how is it ever possibly going to be the future?

#19

Dragon246
17/08/12, 9:32 pm

@14,
Doesnt steam work like that too?
Digital buying is easy,although cloud gaming would take a few more years to establish in some parts of us and europe, and probably decades for reaching the worldwide coverage on site gaming enjoys.

#20

OlderGamer
17/08/12, 9:32 pm

What was the first Online video game console Mike?

Hint: it wasn’t Xbx, PS2 or Dreamcast.

Sometimes ideas fail, and are reborn into newer fresher better forms.

#21

Stephany Nunneley
17/08/12, 9:57 pm

Jaquet has told Forbes: “No, let me be clear. We are not going out of business.”

Post has been updated… again.

#22

OlderGamer
17/08/12, 9:58 pm

A hella restructure then.

#23

DSB
17/08/12, 10:17 pm

Well yeah, that’s the American system.

Chapter 7 allows you to erase your debts and start over, but obviously, if you actually need to do that, then your business is still in deep trouble, and there aren’t a lot of investors who are going to trust in you after that.

#24

KrazyKraut
17/08/12, 11:08 pm

@23
and after starting again the CEOs changing the name ofc….maybe it will be called “LiveOn” (omfg omfg hahahhahahah)

#26

Goffee
18/08/12, 9:11 am

Is the new company called ‘Live On’ by any chance?

#27

roadkill
19/08/12, 9:11 am

@5 “Its what happens when you don’t have investors like EA< and Dell like Galkai did." What is "EA<"?

As for what is happening.. It was pretty much common sense that these idiots would fail. Especially when you sell games that are only available for a limited amount of time. With Steam and Origin when you buy a game it is yours forever. And if these services will ever fail they will release patches that will allows you to play the games w/o being connected to the internetz. Also there's the problem of what you play on. And OnLive was an online platform. Once that doesn't exist anymore you can't play anymore. But with your own PC.. well, your own PC will never simply evaporate.

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