Kara Swisher

Recent Posts by Kara Swisher

Boxes and a Bar: OnLive Employees Pack Up After Cloud Gaming Company Obfuscates About Fate (Photos)

According to multiple reports I have received, some employees of OnLive have been walking out of their Palo Alto, Calif. offices over the last few hours laden with boxes.

And some, no surprise, are headed to a nearby bar — The Patio — presumably to drown their sorrows.

The departures from the online cloud-gaming service came after a meeting this morning in which its top execs told staff that it would be letting almost the entire staff go, but without a lot of explanation of what that meant.

While founder and CEO Steve Perlman runs a number of other digital efforts — via his own Rearden Labs — at its Silicon Valley HQ, sources said only fraction of staffers will be left to keep the servers running until a resolution for the assets is found. Kotaku reported that OnLive would be filing an “alternative to bankruptcy called an Assignment for the Benefit of Creditors, or ABC, in the state of California.”

It is not clear who actually owns the pricey technology and patents for OnLive, which has raised $56 million in funding from investors such as Maverick Capital, Time Warner and HTC. HTC, the Taiwanese telecom giant, invested $40 million of the total in early 2011.

That’s a lot of dough, so it is not clear what has happened or if Perlman is poised to sell off the entity.

Sony recently bought one of OnLive’s rivals in the space — Gaikai — for $380 million to turbocharge its cloud-gaming service efforts.

One thing is entirely clear: While egregiously denying it was doing so, the gaming and virtual desktop software start-up is effectively shutting down OnLive as it has been previously run.

Earlier today, an OnLive spokesperson denied the obvious situation.

“We don’t respond to rumors, but the service is not shutting down,” OnLive said, while also bizarrely flacking their games.

Last week, I heard a rumor of just this thing happening and asked a spokesperson last Friday via email: “I hear via very good sources it is closing down or cutting back.”

This was the disingenuous response: “The latest rumors have been around acquisitions — this is a new one! Not the case, but officially we never comment on rumors.”

No need for comment, as you can see from the photo above and also here that was just sent to me.

OnLive launched in 2010 as a Web portal for streaming games, which it demoed here, from the D: All Things Digital conference in 2010.

As Lauren Goode wrote earlier: “In addition to its cloud-based gaming platform, which runs on PCs, tablets and now Google TV products, OnLive also offers [Microsoft] Office-based, virtual desktop software for [Apple] iPads and [Google] Android tablets, which got the Palo-Alto-based start up in some hot water with Microsoft earlier this year.”

Mashable first reported on the possible layoffs earlier. Let’s upgrade that to actual.


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