OnLive narrowly avoided folding over the weekend
Californian cloud computing service OnLive narrowly escaped bankruptcy over the weekend (August 18th-19th) after finding a new owner in one of its existing investors, but was forced to initiate a massive round of redundancies.
The company filed for a type of restructuring known as an ‘Assignment for the Benefit of Creditors’, then sold off all of its assets (including its technology, intellectual property and server farms) to the newly-restructured company, now owned by existing investor Lauder Partners.
However, this process appears to have precluded the possibility of transferring existing staff or existing shares – which means that some stock-owning workers found themselves in the doubly distasteful dilemma of losing both employment and equity.
The new owner – Lauder Partners – has re-hired over half of OnLive’s existing staff, and the beleaguered gaming company will keep its old name and continue operations as before, promising that customers should see no interruption to service.
OnLive is believed to have over 2.5mn subscribers and an active userbase over 1.5mn, but has not released any indication on how many of these are using the service at any one time.
The company managed to tie up a number of important partnerships at this year’s E3 show in Las Vegas last June, including with smart TV manufacturer LG, leading Giles Cottle, Principal Analyst at Informa Telecoms & Media (publisher of IP&TV News) to predict that games consoles’ dominance of premium gaming on the TV could soon be over.
Meanwhile, a recent report from IHS Screen Digest predicts that worldwide consumer spending on video games on connected TVs will grow rapidly from US$ 88mn in 2012 to US$ 1.6bn in 2016, driven by a combination of the exploding adoption of Internet-enabled TV devices, the rising availability of free-to-access games, and the dismantling of market hurdles.
