A wealth of new details about the sale of cloud gaming service OnLive have been emerged, including the fact that the company was bought for just $4.8 million.
OnLive announced its sale to venture capital group Lauder Partners earlier this year, but only now is the full extent of the company’s dire financial situation becoming apparent. OnLive reported financial difficulties as the reason for the sale and laid-off most of its employees just three days later. Given the potential value of OnLive’s cloud technology, some analysts suggested that the company may have been worth as much as $1.8 billion however it is now apparent that the company was sold for just a fraction of those estimates. By contrast, rival company Gaikai was sold to Sony for $380 million in July.
OnLive is an innovative cloud gaming service that allows users to play major videogames without the need for dedicated games console. For a subscription fee, users can stream videogames across the service’s cloud network to play on their pc, mac, tablet or mobile device. OnLive can also be used with televisions via a small ‘micro-console’. The service received support from a number of key game publishers and currently features over 200 games including recent hits like Darksiders II and Sleeping Dogs as many major title like Assassin’s Creed: Revelations, L.A. Noire and Batman: Arkham City. It was thought that this impressive technology could point to the way videogames are played in the future but in reality the service failed to become a significant hit. Though OnLive reported it had 1.5 million active users before the sale, recent figures seem to suggest the service may have only had 1,600 users at any one time.
As a result of the sale, OnLive workers have lost their stock in the company and founder Steve Pearlman departed the firm. It has also been revealed that before the sale the company was near-bankruptcy and owed about $18.8 million meaning shareholders including BT, HTC and Time Warner has effectively had to write off their stake in the company.
Despite this turmoil, many of OnLive’s former employees have been rehired by Lauder Partners and the service continues to operate as usual meaning subscribers to the service remain unaffected.