So Friday, while you were at work, or sleeping, or just out I don’t know, riding a roller coaster at some amusement park…. like I was. A news story with very little details containing “rumors” of a major cloud gaming service going bankrupt. Even today the stories and updates detailing what is happening with the company keep rolling out.
Friday morning reports started coming out that OnLive had entered “Assignment for the Benefit of Creditors” meaning that someone takes over the assets so that everyone gets paid off. Perlman(CEO) announced that the guy taking over is an accomplished venture captailist and thinks that cloud gaming is the future to everything. At the meeting there were very few details given in regards to the new owners. Only that until the company had a positive cash flow Only a few employees would be joining the new company. Perlman wen on to state that those consultants that helped with the transfer would be given stock options that if and when the company went public would be worth money. Until then, those stock options and the stock that they held in OnLive would be completely worthless.
So, Most of the employees had worthless stock, and no jobs going into the weekend. However the subscribers in the service would notice no interruption what so ever. As well as that OnLive was doing everything in its power to make sure that Gaikai did not get its hands on any of its property(Gaikai being the only major competitor).
That’s what it was friday. Saturday, this statement was released.
“OnLive, the pioneer of instant-action cloud computing, announced today that on August 17th all of its assets were acquired by a newly formed company that will continue to operate under the OnLive name. The OnLive® Game and Desktop Services, all OnLive Devices and Apps, as well as all OnLive partnerships, are expected to continue without interruption and all customer purchases will remain intact; users are not expected to notice any change whatsoever. OnLive’s current initiatives will continue as well, with major announcements of new products and services planned in the coming weeks and months. An affiliate of Lauder Partners was the first investor in the newly-structured company, holding the view that OnLive is the future of computing and entertainment, and a passion to see OnLive’s breakthrough technology continue to grow and evolve. The new company structure enables OnLive to do so.
OnLive, Inc.’s board of directors, faced with difficult financial decisions for OnLive, Inc., determined that the best course of action was a restructuring under an “Assignment for the Benefit of Creditors.” The assignee of the company’s assets then sold all of OnLive, Inc.’s assets (including its technology, intellectual property, etc.) to the new company. Unfortunately neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction, but almost half of OnLive’s staff were given employment offers by the new company at their current salaries 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.
The OnLive Service has been in operation 24/7 without interruption since its launch over two years ago, and is expected to continue to operate smoothly under the new company. All games, products and services remain available, and the company has new product and partnership announcements on the way.
OnLive’s breakthrough instant-action cloud computing technology has been in development for over a decade and, despite immense skepticism, OnLive successfully deployed this highly disruptive technology as a polished consumer offering with commercial-grade reliability across a vast range of devices, including TVs, tablets, phones, PCs and Macs, connected over almost any Internet connection, including wireless and cellular. Only a few major corporations have ever developed and deployed products and services across such a broad spectrum. OnLive is rare among startups in both the depth and scope of its offerings.
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.”
Along with this FAQ:
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.
So lets sum up this whirlwind happening…. OnLive is under new management, Half the staff is gone, The service is still the same. Rumors suck but have a way of being true. So Service will not be interrupted for those subscribers they have.
They in fact could improve. It sounds like the new owners are pushing this as the legitimate future of the gaming industry. If this guy can walk the walk that he is talking I may just subscribe. Not that Perlman didn’t take it seriously but from the sounds of it he just didn’t have the man power or the money to take this to the level that it needs to go to. What are your thoughts?
Think this is the first step in a downward spiral or is it the direction it needed to go? Let us know in the comments below!