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OnLive Crumbles, Will Continue New Ownership

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When the idea of "cloud gaming" first reared its binary head, we all heard whispers about "the death of traditional gaming." System requirements would be made a thing of the past, by streaming content from a much more capable machine than your pitiful, underpowered, proletarian computer. Console titles could be streamed to your television through OnLive Game System, eliminating the need for physical media altogether, and saving consumers money on more expensive game systems. Indeed, with the magic of a broadband connection, the pantheon of gaming loveliness could be at one's e-fingertips.

So how is the slaying of traditional gaming coming along? In the case of OnLive, not so well.

Read more after the jump!

While the company ran into some initial problems - few facilities, lag issues, etc. - but there were those who believed in the concept of remote gaming as a feasible alternative to the traditional model. Now, OnLive has filed for a form of bankruptcy known in California as "Assignment for the Benefit of Creditors," which means the company will be allowed to continue doing business, but will lose all assets - "the software, hardware, network architecture, our logo, all that stuff," in the words of OnLive CEO, Steve Perlman - and see a transfer of ownership. According to Joystiq, the company had a rather high overhead, with an average number of concurrent users at "1,100 to 1,500, peaking at around 1,800 on a given day -- not exceptional by any means in the face of reported $5 million a month operating costs."

However, there are still those who believe that the OnLive model is the future of gaming, and as such, the company has found a buyer. As revealed in the meeting, a "very accomplished and well known venture capitalist" will receive all OnLive assets, in an attempt to bring the company to solvency. In a rather unpleasant surprise, employees were told that only those deemed "essential" employees would be retained; the rest would be cut at the end of the work day. While the OnLive CEO did not give exact numbers, a former employee revealed to Engadget that "at least 50%" (according to an update, this may be as high as 90%) are no longer with the company. To add insult to injury, Engadget reports that "no severance will be offered and stock holdings are essentially worth nothing." The Joystiq article notes that the company employed 150-200 people.

What do you think, gamers? Have you used OnLive, or do you currently have a subscription? If so, what do you think about the idea of streaming games? Sound off in the comments section below!

2 Comments

Shin Gallon said:

Latency and lack of mods would keep me from ever using this. Mods are a big part of why I'm primarily a PC gamer, without that (and I don't see how it'd even be possible with this system) I'm not biting.
Plus for online gaming, lag between your PC and the server is already enough of an issue, imaging compounding that with this (try playing a game online with 100-200 ping, it's almost impossible).
I think I'll pass.

Simon said:

I had an Onlive console. Think I used it twice. The games were way overpriced and most of them had a "pay monthly to play this title" label to it. Shot themselves in the foot in my opinion. Digital content, in theory, should be cheaper. Seeing as there is no packaging, no stores, no sales assistants etc. That was the original intention, until companies got greedy.

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