On Friday, we reported that OnLive wasn’t closing shop after word spread that people were packing up their things and leaving the office. Well, we were kinda right. Through a clever transfer of IPs, none of which were actually owned by OnLive, the company was actually shut down. In its place, a new company sprung up, named OnLive, entitled with the remaining assets of the original OnLive. The service, to the layman, will be completely unaffected. Confusing? Yep.
As it turns out, the core of OnLive’s assets were owned by Rearden Labs, which is owned by CEO Steve Perelman, who gave us a positive impression at E3 regarding the service’s expansion. It didn’t seem like anything could go wrong and that they were actually thriving behind the scenes. As it turns out, not so much. Since OnLive is a private company, they have no obligation to reveal their financial status, which was pretty deep in the red. To avoid bankruptcy, the company went through a complex process of asset transfer where a new company was formed on the current company’s nest. While they evaded the ultimate penalty for the company, everyone with a stake still had most of their value erased. Only half of the company’s 200 employees will continue to have guaranteed salaries while the other half may be contracted on a person-by-person basis to ‘consult’. HTC also immediately lost most of their $40 million investment in the company.
Now it’s true that HTC may have gotten word about this ahead of time, perhaps all their partners did, but doing business with OnLive sounds like a sketch proposition at this point. Would you stick your dollars in OnLive knowing they could be gone at any moment?