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OnLive Sheds Details on Implosion
Promises They'll Continue to Operate As Normal
by Karl Bode 12:35PM Monday Aug 20 2012
Last Friday we noted that broadband streaming game service OnLive mysteriously and suddenly fired all of their employees with no notice or severance package. Significant additional detail has surfaced since then, with the company announcing that OnLive and all assets have been acquired by a newly formed company, with VC firm Lauder Partners being the new company's"first investor." About half of the fired employees will be hired back, with some additional employees brought in on a consultant basis.

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In explaining the rather shady-sounding transformation, the company says they've decided to restructure under an "Assignment for the Benefit of Creditors" arrangement that prohibited them from bringing OnLive shares or employees along for the ride. For whatever it's worth, the company insists that that OnLive will continue to function as it always has:
quote:
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.
While the company says they have roughly 1.5 million, it's thought that the company's active, consistent user base is only a fraction of that: somewhere in the range of 2,000 users. Here's a full FAQ from the company for those interested:
quote:
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.

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cpsycho

join:2008-06-03
HarperLand

What it looks like

To me seems like a restructure for sell off or bankruptcy. I feel sorry who bought their games through this service.

Thaler
Premium
join:2004-02-02
Los Angeles, CA
kudos:3

Re: What it looks like

Aww crap, all my free games! I want my money back!

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

The new investor

Gary Lauder, is the first investor in the newly created OnLive.
»www.ted.com/speakers/gary_lauder.html
»www.lauderpartners.com/

Gary Lauder is one of the heirs of the multi-billion dollar Estée Lauder perfume fortune. »www.ft.com/cms/s/2/0099049a-0d51···434gHA1m

Who: Gary Lauder (b 1962), William’s younger brother. Managing partner of Lauder Partners, a venture capital firm based in Silicon Valley.

Rise to power: the only one of Estée’s grandchildren not to work for the family company, Gary has a BA in International Relations from the University of Pennsylvania, a BS in Economics from Wharton and an MBA from Stanford Graduate School of Business.

Out of the office: Gary co-created Aspen Institute’s Socrates Society with Laura, his wife. The society aims to bring together emerging leaders from various professions “to explore contemporary issues”.


--
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n2jtx

join:2001-01-13
Glen Head, NY

Desktop

The Onlive Desktop application was still working on my iPad this weekend. Who knows if it will stay that way. I certainly would not put anything on it that I could not afford to lose.
--
I support the right to keep and arm bears.
25139889

join:2011-10-25
Toledo, OH

Re: Desktop

it still works. Nothing is going to change. HTC has already made comment that they still own part of OnLive. Karl just fails to mention these details to get more "viewers"

ctceo
Premium
join:2001-04-26
South Bend, IN

Re: Desktop

Uh Oh Karl, Looks like you have a conspiracist on your tail...
xenophon

join:2007-09-17

1 edit

Needs PayPal and/or Google Wallet

I've tried the demos and decided to buy one but it was too involved to setup billing for an impulse buy. I gave up. They would have me as a customer if supporting PayPal or GWallet.
25139889

join:2011-10-25
Toledo, OH

Re: Needs PayPal and/or Google Wallet

Why would they when they have to give either of those companies a chunk of their $$$ -- more than what they would if they went direct with their own merchant account. And who really trusts Google with their credit card processing or even PayPal at that matter.
xenophon

join:2007-09-17

Re: Needs PayPal and/or Google Wallet

How risk taking I must be for using pay services over the Net. Gasp. Yeah, I bypass many internet shopping places if they don't support either PayPal or GWallet. Both can be tied to American Express and they are pretty good handling false charges - which I haven't had to cancel yet.

RARPSL

join:1999-12-08
Suffern, NY
said by 25139889:

Why would they when they have to give either of those companies a chunk of their $$$ -- more than what they would if they went direct with their own merchant account.

That is the point. If you have a Merchant Account, you pay fees with it to the Merchant Account provider. You do the same with PayPal or Google Wallet (they have their own Merchant Account with their Bank and the Card Services). The choice is which charges you less fees. Note that the fees are based on the volume of charges as well as the size of the individual charges so PP and GW due to their larger volume can get better (ie: Lower) fees due to the merging of all their customer's charges than you can so they may be the better option. Of course, they are the only deal in town if you can not get your own MA (or do not have enough volume to get a viable rate).

cableties
Premium
join:2005-01-27

late to game...

OnLive, if say, came to market in 2008, then they might have been bought by one of the "big three" (Xbox, PS3, Wii).

However, without content, commitment and exposure (I never heard of them except Joystiq blog), it is really late.

IMHO, history (Atari's Jaquar, NEOGEO, ...) shows that even if your console is better (graphics, play, resources...), if the market is saturated and economically poor, a risk is it is on the down turn.

Look how rumored EA is shopping around...it's worth is finite. You can't bet on FPS forever. And until platforms change (recall PS3 is a 10yr plan, where Xbox is on 8th revision). And my gaming friends (which are a good reference) note that content seems to be "A" through "AAA" titles released for 3rd quarter (Oct-Dec). Note all "top" titles are Sept/Oct and Nov release for Christmas.

All cyclic...
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Splat
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

UnDead

So, when this company came out I was very skeptical. Tried using their service, but it was extremly delayed. My connection is 35/35 and I was not impressed. The only good thing for this service if you want to demo a game.

aaronwt
Premium
join:2004-11-07
Woodbridge, VA

Re: UnDead

said by brianiscool:

So, when this company came out I was very skeptical. Tried using their service, but it was extremly delayed. My connection is 35/35 and I was no impressed. The only good thing for this service if you want to demo a game.

Just the opposite for me. I tried it when I had the 35/35 service. I was surprised how responsive it was when playing a FPS on their service.
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

Re: UnDead

Also the visual quality was terrible. A lot of it looked blury compared to when you would run a normal game on your system.
25139889

join:2011-10-25
Toledo, OH
it doesn't matter how fast your connection is- they state you need to be near oen of their data centers with great pins to them.
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

Re: UnDead

Maybe in 10 years we will be able to defeat latency.

AVD
Respice, Adspice, Prospice
Premium
join:2003-02-06
Onion, NJ
kudos:1

Re: UnDead

said by brianiscool:

Maybe in 10 years we will be able to defeat latency.

C is constant
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--Standard disclaimers apply.--

kara

@comcast.net

shady dealing

sorry but the way they did that was shady dealing in my view of it. I not have anything they put out. Sorry for employees, glad some got job back but i be in fear of what they do next. If you treat employee like that customers should expect same.