Over the weekend, a story broke around the game streaming application OnLive. The company was reported to have gone bust, with all of its staff laid off and plenty of uncertainty about where its customers would be left. Now it seems as though things have moved swiftly and customers will, hopefully, be largely unaffected.
OnLive’s board of directors filed for an Assignment for the Benefit of Creditors at the weekend. This essentially devalued all shares and dissolved the company. Apparently, almost half the staff were re-hired, on their previous salaries, by a new company formed by the former management of OnLive. Those not offered jobs were offered consultancy roles and stock options with the new company. The former CEO and founder of OnLive, Steve Perlman, was not given any compensation or awarded any stock in the new company.
The new company has acquired all of OnLive’s assets and patents, as well as retaining the name. The company has issued a statement to say that all of its existing partnerships and services will continue without interruption. In short, existing customers shouldn’t notice any changes whatsoever to the service.
MrSpeedyGonzales
I hope onlive does well, the biggest downside that the company has is that it’s just slightly before it’s time. Internet speeds just aren’t high enough in the majority of the country.
3shirts
No I think their pricing was the problem. They should be offering a subscription which give you unlimited games including new releases.
If you wanted to use it for new titles you were paying retail price for them.
cc_star
Problem is, publishers don’t let many of the best new releases go on OnLive, presumably worried about it cannibalising sales or that if OnLive succeeds it will do to gaming what iTunes did to the music market and effectively be their only route to that market and they’ll be beholden to their demands in future.
Including it in a sub means far less money which is why its generally back catalogue
Sympozium
yeah, I’d want that too. I would never buy any new releases from it. Way too risky but the sub is nice and how you can play most games for a hour trial.
bunimomike
In such a consumer-based world you’re right. OnLive does not look as good as “local” games which means that even if it does reduce the potential cost of such things, we’re still won over by the visuals time and time again.
Also, pretty shitty news about the tactics used if they’re doing the whole switcherooney move with the directors then filing for bankruptcy.
cc_star
HTC were a $40m investor in OnLive, they’ve lost that in the new structure, which seems to be little more than a scam to avoid paying what they owe, gaining ability to lay staff off without remuneration and to be able start again debt free… Probably a tempting company to buy now, especially if their patents hold up well.
Peter Chapman
It seems like that’s the purpose of most bankruptcy filings though – to dodge paying full debts to creditors and to shift assets so they’re not lost. It does seem odd that they’re allowed to carry on with all patents and the name though, shouldn’t there have been an auction or something?
Kris Lipscombe
Create new company, sell assets to new company for nominal fee (£1 or whatever), then file for bankruptcy. Just have to do it in the right order. Does seem dodgy though.
YOURMUMANDME
@halbpro,
Literally took the words out of my mouth.
This happens all the time. The company that I was eventually made redundant by did this 4 times in the space of 3 years. The owner would just name someone else as director, have the previous one take a bankruptcy hit and shuffle roles around the company. We had ldt added, then marketing ltd, then marketing uk ltd and finally ‘the’ added at the start.
It’s ridiculous. Ultimately the government don’t want unemployment hikes and like productive taxes but surely they’re smart enough to know a dead horse….
TSBonyman
Since this news broke i’ve also read that Steve Perlman has acquired a fundamental cloud-gaming patent and plans to sue the crap out of Gaikai … let’s hope Sony haven’t bought themselves more trouble.. :/
BrendanCalls
That is some properly shady business tactics there. I’m a fan of OnLive and am keen to see it succeed but that has tainted it a bit for me actually
An-dz
I dont know how they get away with that kind of thing