Newly formed company will operate under the OnLive name using all of the previous company's assets; services, apps, and current initiatives to continue uninterrupted.
OnLive has clarified recent industry reports regarding the sale of its assets to another company.
In a public statement released today, the company confirmed that after a series of "difficult financial decisions" it had sold all of its assets (including its technology and intellectual property) to a newly formed company that will continue to operate under the OnLive name. An affiliate of Lauder Partners has been confirmed as the first investor in the newly structured company.
The decision was made after OnLive's board of directors decided to pursue a restructuring under an "Assignment for the Benefit of Creditors," which led to the sale of OnLive's assets to the newly formed company.
According to OnLive, the nature of this transaction did not allow the company to transfer its shares or its staff; however, the company says almost half of OnLive's staff were given employment offers by the new company at their current salaries immediately upon transfer. The non-hired staff will also allegedly be given offers of consulting work in return for options in the new company.
"Upon closing additional funding, the company plans to hire more staff, both former OnLive employees as well as new employees," the company said in its statement. Speaking on already-existing reports about OnLive's sale of assets, a company spokesperson noted that only company executives had access to the information regarding the transaction and that "much of what we are seeing is fiction."
OnLive also used the public statement to reassure users, saying all OnLive games, products, services, devices, apps, current partnerships, and current initiatives are expected to continue without interruption, with all customer purchases allegedly remaining intact. The company says it also expects to make "major announcements" regarding the launch of new products and services in the coming weeks and months.
"The asset acquisition, although a heartbreaking transition for everyone involved with OnLive, allows the company's core innovation and ongoing offerings--the product of over a decade of hard work transforming the OnLive vision into reality--to survive and continue to evolve."
Below is a FAQ included by OnLive in its public statement:
Q. Will users see any change in the OnLive Game or Desktop Services? What about their purchases?
A. Users should see no change in the OnLive Game or Desktop Services. All of their purchases remain intact and available. OnLive has been up 24/7 since launch over two years ago and expects to remain so. OnLive has over 2.5 million subscribers, with an active base of over 1.5 million subscribers, connecting from a vast range of devices and networks, with many sessions running for hours. The user base is growing rapidly with OnLive’s addition into recently announced devices and TVs from major manufacturers. We expect this growth to continue under the new company.
Q. Is there any cash or stock in the new company provided for any OnLive, Inc. shares?
A. Unfortunately not. The nature of the transaction is such that only assets, not shares, were purchased. This is true for all shares of OnLive, Inc., whether held by investors, employees or executives.
Q. Did Steve Perlman receive stock or compensation in this transaction?
A. Like all shareholders, neither Steve nor any of his companies received any stock in the new company or compensation in this transaction at all. Steve is receiving no compensation whatsoever and most execs are receiving reduced compensation to allow the company to hire as many employees as possible within the current budget.
Q. Did all OnLive, Inc. assets transfer into the new company? Are any assets held by any other party?
A. All of OnLive, Inc.’s assets (e.g. technology, patents, trademarks, etc.) were transferred to an assignee, which then sold the assets to the new company. There was no transfer to any other party.
Q. Have OnLive, Inc. employees been offered positions in the new company?
A. Almost half of OnLive’s staff were offered employment at their current salaries in the new company immediately upon the transfer, and the non-hired staff will be given offers to do consulting in return for options in the new company. Upon closing additional funding, the company plans to hire more staff, both former OnLive employees as well as new employees.
Laura Parker is the Associate Editor of GameSpot Australia. She loves adventure games, sparkly stuff, Trivial Pursuit, cake, Master Chief, earthworms, and rhetorical questions. She once stole a sandwich from Peter Molyneux.
The idea behind OnLive is really good. I think we need a few more years to be able to play those games without lag and better visual quality, as internet services will also improve. Regardless of how many problems it has today, I can see all of them going away in a few years. This is the future of gaming, and probably the thing that can best compete against consoles. It is preferrable for developers as well.
Onlive will grow. its a good little service. I could see microsoft doing cloud gaming. Maybe in the future xbox live when you buy games from there will have a feature like zune where you can download or steam the content you buy.
This is why I like games that don't require any additional programs (including Internet) to run. If the servers to a MMO goes down you can't play the game anymore and I would think that most/all F2P games are the same. If your digital distributor disappears (Steam Origin, OnLive), so does your games. Not that I think Steam will close within 10 years or so, but I like to play my games for a long time ahead and still play the first game I got which is 15 years old by now (Dark Forces 2: Jedi Knight).
Knew this company would fail the second I ever read about it. Its garbage technology. I wont stream games, its ridiculous.
@DarthLod It's not garbage. It's a new technology, that's why keeping it up and running requires significant amount of money. Maybe they can keep it operating under new managements.
Yes, they may be too ahead of its time though, internet speeds outside for example: US and Korea are still garbage. Maybe in 10 years time it will be the standard way of gaming.
This entire matter has and will continue to cause harm to OnLive's business. First, new investors are going to be extremely fickle, especially considering most (if not all) of the old management still leads the new company.
Second, consumers are already wary of the technology behind OnLive and the matter that you don't own any of the titles purchased through OnLive. I know the service allows you to, essentially, rent games but what happens another year down the road if the company goes out of business completely and you have several games you paid full price for? I doubt the publishers of those games are going to send copies to your doorstep.
OnLive is a novel idea and one I wish would flourish, yet the management running the service leaves a lot to be desired. I tried the service in the past and for what it is, I enjoy playing it on certain platforms (tablet). I hope for the best but I fear the worst. Good Luck OnLive.
1 Like Onlive is the PERFECT gaming option for people without gaming rigs. How else would someone with a netbook play Arkham City at max graphic settings. Onlive will even run on most tablets.
1 Like @Wizallah yea but to me the advantages get overtaken by disadvantages, the limited library,low res and being charged for everything you do even to breathe on that thing.......
@IanNottinghamX You're only charged for the new games. For 10 bucks a month you have access to the entire library. So what do you mean?
1 Like Meh. Don't like to see people lose their jobs, or stocks, but I think Onlive may be ahead of its time. I still think a huge percentage of the world is without broadband Internet. I would rather have my hard copy of titles anyways. Yeah, some downloaded titles are fine, but I still prefer the case, and manual. I guess I'm old fashioned.
1 Like OnLive actually is really cool, we just don't have fast enough internet worldwide to stream games in enjoyable qualities, if we all lived with internet like they do in Sweden, OnLive would be a very good option, maybe Google Fiber will be that leap that will help this service.
1 Like i didn't even know they had released this service. Probably one of the reasons they went bankrupt. No marketing.
4 Like I am always suspicious of those new, flashy technologies that are hyped as the "future of gaming". Most of them flop.
3 Like To me, Onlive always sounded like a terrible idea. I don't see how you gain anything by using a method like Onlive. Especially in an era of lowering hardware costs. Also, bandwidth is starting to get a little cheaper too. Onlive is like attempting to fix something by making it twice as complicated and ending up with a worse result.
2 Like Isn't this just a sleight of hand trick to "renegotiate" employment terms with existing employees, dump over half the workforce easily, and deny COBRA coverage to the old employees thru the company changing hands? But really it's not changing hands. Same people leading it up, same name, same equipment. I bet they even roll over into exactly the same contracts with equipment and space leases and bandwidth suppliers. How convenient.
I like Onlive but seriously,Onlive needs more games from EA,Activision,Rockstar Games and maybe even Valve.
the tech is just not there yet to support something like Onlive, so hopefully it dies a horrible death like virtual reality did.
It's kinda there. At the current resolution it seems to work pretty well for me even though I'm not close to any of the data centers. However, it does need some extra bandwidth to get up to 1920x1080 for my cabel modem.
Google Fiber is just now taking pre-orders in Kansas City. That thing shoves bandwidth high enough to go to 4K resolutions and maybe even do them in 3D yet it costs no more than cable does now. If that technology can get popular before OnLive runs out of investment money then Onlive is going to do great. If not, then they will have to sell off the patents to some other company that will get all the glory.
@Zloth2 This is true, but it's not that easy. Certain companies like Verizon, Comcast, and Time Warner are working to monopolize the market (not that they aren't already) and make things like FiOS difficult if not impossible for the average person to acquire. It'll be a long time and a lot of litigation before Fiber is nation-wide, let alone global, and that's about what's needed for something like OnLive to thrive.
@BosoxJoe5 You realize that has nothing to do with what I was talking about:http://abcnews.go.com/Technology/wireStory/justice-dept-order-verizon-deals-17018822#.UDMTFd1lTsUThat's currently being fought tooth and nail because it reduces competition which means companies get to do whatever they like. And whether FiOS has anything to do with Verizon or not is irrelevant, considering there are many places (like where I live) where they are unwilling to put in FIber because of the cable wire already up, yet there is no one else able to compete in the area and either give people other options for Fiber or force existing providers to reconsider.
@nathangray You realize that FiOS is a marketing brand of Verizon. Do you also realize the reason you have Verizon vs ATT or Comcast vs Cox is because of decades(meaning pre-70's) old zoning right sales. TW is in NYC because they pay to overlay there wires in a zone they do not currently own. RCN does this in Boston and NYC. Idea that Google needs to sue anyone is comical.
How long until someone sues them for this move? Surely there are people that invested in the "old" Onlive seeing it as an exciting opportunity, only to see all the valuable parts of it transferred off into a new company that they now have no part of?
3 Like And again, the drawbacks this service has are significant - low res, low graphic settings, lag, nod mod community, total control to the publisher and non to the user, etc.
Saw it coming. The technology isn't evolved enough to allow full playability of the game (graphic issues, cloud data storage problems, internet hiccups) and on top of that, competition like Steam completely shadows Onlive. The latter isn't even in the same league right now, and I'd take downloading games to my HD over playing them on the net and hoping they're still there tomorrow, any day. 1.5m recurring customers is NOTHING. I doubt the money they make from those customers even handles licensing fees, let alone overhead and tech dev. It sounds like they were having financial troubles, and if someone hadn't bought them out, a lot of people would be pissed about their missing games right about now.
@Zloth2 You need to address this within the context it stands. Making tons of money doesn't matter if you spend tons of money. The math isn't difficult even in theory. If you research things like licensing, publishing, and royalty fees, they are atrocious and can easily leave a company in over their head. That doesn't take into account things like overhead, attorney fees, etc.. I'm sure OnLive was turning a profit, but at only 1.5mill "recurring" customers, it clearly wasn't enough considering they just got rescued by someone else.
Onlive brought the concept to early. While cloud gaming will probably will be the future, it is still to far away even in a country like the US. Too many technical difficulties to really capture the amout of customers needed to make buisness right now.
@Hvac0120 Very unlikely given this was undoubtedly a loss in the checkbooks. Had you read the article you would have seen that he received no additional stock options for the sale in addition to taking salaried hits along with most of the other exec staffing.
@ColdfireTrilogy @Hvac0120 "Undoubtedly a loss in the checkbooks" - Did you read the article? There's been very little solid information regarding the details of the transaction which leaves plenty of room for many different scenarios. What has been released is enough information to keep paying subscribers on board and to calm the media while all the back-end deals are being finalized. My scenario may not be the truth, but considering the history of what happens in the gaming industry; it's a likely possibility.
4 Like Let me guess. The founders of OnLive started the company with the intentions of selling it off. They knew they had a good idea, but didn't want to see it all the way through. Just to a point where they could hand over the keys and walk away.
It's curious that nobody is mentioning who the buyer is. Let's throw in a conspiracy and say it's Apple!!
1 Like I've got OnLive, and the MicroConsole, and I have to say it's great, ok playing for your PC or console is a lot better, but it's has improved and got a hella lot more stable and faster, it is really great now, I think the basikly changing staff is just because the old staff couldn't go any further, or were all asked to be hired by Gykai and Sony. But I think OnLive will continue to grow, and will become the next way to play a game cheaply with with better graphics than console. (It will have better graphics soon).
2 Like I don't see how it's going to do any better under a new company, the idea itself is just destined to fail.
1 Like @Crossel777 Actually the idea would work if cheap superfast internet is widely available to support it. Without that OnLive is not going anywhere fast.
4 Like Yeah I use it mainly to trial games. Really good if you have a great net connection and don't want to wait for downloads.
Yeah that too. My PC doesn't need an upgrade, but it's still faster for me to use OnLive, and comes with no unexpected compatability issues.
dont care gaikai is better in every single way anw
and now with the ps3 deal things gets even better
@Albaficas HAHA you realized now that it's just Sony who have Gykai stuff? That's not a good thing, less revenue available to them now. Anyway why is them changing staff going to make you not care, I use OnLive, Gykai does have a more stable connection, but OnLive has features Gykai does not.
My ISP bandwidth caps stopped me from ever really trying them out, the demo for it worked pretty well for single player games though(despite no hd on wireless). I think they came out too early, hope they make it out before apple or microsoft steals the idea completely.
@OurSin-360 It's got really great now, I know someone who uses it off a slow internet speed with wireless and they get good quality.
7 Like Can we please ask these people the hard questions? Like why they restructured like this specifically? They financially screwed anyone who owned stock in them. (i.e. employees typically purchase stock in their company as padding for retirement)
Honestly, this sounds an awful lot like Enron.
@IkedaTeramusa The "stocks" are worthless because the company has never been floated in a stock exchange.
And they managed to get rid of half of their staff without needing reasons to fire them nor severance pay. It's suspiciously good for the company, you'd expect some sort of problems for a company that has essentially run out of money. Not to sound like a conspiracy theorist, but this is win-win for OnLive, its big debts and half its wage bill have gone yet it retains everything including the company name and IP.
3 Like Regardless of whoever takes over the company, I reckon we're hearing the death rattles of Onlive right about now. Lost consumer confidence is anathema to a cloud based distribution service like this.
@zfair89 I just think they started too early, the technology is still bleeding edge. Give it some time..
Founder and former president of cloud-gaming company Steve Perlman exits firm to work on a "myriad of other projects."
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