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Official: OnLive sold to 'newly-formed company,' will continue service

Official: OnLive sold to 'newly-formed company,' will continue service


OnLive issues official word over recent layoffs and rumors.

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As the business day comes to a close, it looks like OnLive might end up pretty much where it started. Earlier today, rumors swirled that streaming gaming provider had issued pink slips to much of its staff, mostly sparked by a series of tweets from game developer Brian Fargo. According to Fargo, he'd received an email from an OnLive staffer with news of sweeping job cuts at the company, and hints that a reorganization of the service was afoot. Shortly thereafter, company spokesman Brian Jaquet issued a number of responses to reporters, ranging from "no comment," to "of course the company is not going out of business."

After hours of rumors, the company has finally issued an official statement via email:

We can now confirm that the assets of OnLive, Inc. have been acquired into a newly-formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive's apps and devices, as well as game, productivity and enterprise partnerships. The new company is hiring a large percentage of OnLive, Inc.'s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees. All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services.

We apologize that we were unable to comment on this transaction until it completed, and were limited to reporting on news related to OnLive's businesses. Now that the transaction is complete, we are able to make this statement.

As you can see, OnLive isn't disclosing the name of the new company nor the source of its "substantial funding," only that it's "newly-formed." Although many OnLive employees have been seen leaving the company's headquarters with boxes full of possessions, apparently "a large percentage" will be hired by this new company — though whether "large" can fairly be read as "a majority" isn't at all clear. OnLive also wouldn't confirm whether OnLive CEO Steve Perlman was a part of the new, mystery company.

The email ended a day of speculation and confusion as a variety of publications, including GamePolitics, Kotaku, and TechCrunch began to publish statements from anonymous employees about their firings, as well as rumors of both a bankruptcy filing and a potential acquisition. Some of the stories reported that OnLive president and CEO Steve Perlman issued the companywide layoffs in a bizarre all-hands meeting that ended with applause.

As reporters observed employees of the company streaming out of OnLive's Palo Alto offices — some with boxes in hand — it became clear that the email sent to Fargo was more than a fluke. The Verge observed workers headed to their cars with white printouts in hand and a variety of personal belongings. Some pretended to speak on their cellphones as reporters outside asked questions about the state of the company. Eventually, OnLive spokesperson Jane Anderson appeared and ushered media indoors to wait for the official word from the company.

That word finally arrived via email, but many questions remain. OnLive's customers will no-doubt be happy to know that service will be maintained, but beyond that we will have to wait to find out exactly what the reasoning is behind today's very strange drama.