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OnLive assets sold for $4.8 million

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Streaming game service OnLive had some pretty rough times over the summer, but it looks like the company's narrow evasion of bankruptcy was even more razor-thin than suspected. The Verge reports that OnLive's assets were sold off to investor Gary Lauder for just $4.8 million in August.

For reference, news emerged in July that Sony purchased competitor Gaikai for $380 million. Why would OnLive's management let the whole kit and kaboodle go for so little? The company reportedly had $18.7 million in debt, and outside analysts found the company would be worth more as one purchase than being sold off piecemeal in auctions.

OnLive laid off half of its employees in August, with founder Steve Perlman exiting the company after the financial maneuver to resell the assets to Lauder and maintain the service. Its creditors could still try to force bankruptcy for the company if they believe it was worth more than the $4.8 million sticker price.

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8 comments

  • db1331 - October 10, 2012 10:44 a.m.

    I could have saved these dudes SO MUCH MONEY. This was doomed to fail from the start. Who was their targeting demographic? People who wanted to play PC games but didn't want a PC in the house? I laughed my ass off when OnLive was first announced, and this is precisely why.
  • ddg4005 - October 10, 2012 1:05 p.m.

    I have to agree. I never saw this as a good idea and I'm surprised so many people did.
  • Balaska - October 10, 2012 10:54 a.m.

    In a world of bandwidth caps and grey areas in the law over the ownership of digital goods, streaming games was an idea realised too early.
  • Scuffles - October 10, 2012 10:56 a.m.

    I think it might have panned out back in the day of all you can eat bandwidth. Really if not for the looming threat of tiered internet pricing this could have been a thing. Unless a cable company buys this up and bundles it .... I'm not seeing the potential for a huge success.
  • jackthemenace - October 10, 2012 11:55 a.m.

    It's a bit of a shame really. This sounded like such an amazing idea, but I could tell from the start it wasn't going to be everything they said it was- and if it was, it wasn't going to last long. Still, hopefully other companies learn from it, and manage to work out how to do it more efficiently in the future.
  • spankyj25 - October 10, 2012 6:05 p.m.

    I think this is being reported incorrectly, actually. If you read any of the news about OnLive (which is still VERY MUCH in business, btw. I just bought Sleeping Dogs on OnLive.), you can see that they used a legal loophole to remain in business. They didn't "sell off" the company, per se. Basically, they wanted Gary Lauder (among others) to invest. He wasn't going to invest because of all of the debt that the company had. Perlman found a way to use this legal loophole to keep the company alive. Unfortunately, this loophole had specific details about how the company was sold off. All of the employees had to be liquidated. Many of them have been hired back on, and many others have "freelance" consulting jobs with the company. On paper, the company was straight-up sold to Lauder. The fact is that he made the investment and took over the company, but not for it's actual worth. Perlman stayed on as CEO until he realized that people thought it was in poor taste, and creditors looked to hang the company. After all, he has plenty of other business that he can focus on. OnLive is Perlman's baby. He did everything that he could to see it succeed. In the end, what he had to do was let it go. I keep reading articles about how OnLive "failed", or how it was "doomed from the start". I'm a big gamer, and I have been a member of OnLive since it's inception. I use it just as often as I use my other consoles. It hasn't failed at all. Yes, there have been bumps in the road. It hasn't gotten the support they had hoped for, and the required infrastructure for such a service is VERY costly. The continual innovation is likely what hurt the service more than anything. It's available on Android. It's available on the new Vizio Costar streaming device. You can play AAA games on nearly any Windows or Mac computer that has a broadband connection regardless of graphics hardware (linux too, via a Wine mod). The OnLive game console is a great little machine, too. I LOVE their controller. I think that it combines the best parts of the 360 and PS3 controllers. If I could make it work with both of those consoles, I would use it exclusively! All of these innovations cost money. I realize that I am going on a bit of a rant, here. I don't think that I'm some type of fanboy. I just love video games, just like most of us here. I really hate to see this one console in particular pushed aside when it really has a lot of value, in my opinion. They have a decent library of games, and have enjoyed pretty decent support from many great publishers, over the years. I worry that stories like this one will hurt OnLive's ability to maintain those relationships because everyone seems to think that the service has failed. I own all current consoles. I will buy the next gen, too. However, the beauty of OnLive is that I already OWN their "next gen". When Assassin's Creed 4, or Sleeping Dogs 2, or Darksiders 3 come to the next gen, OnLive will be able to play them. No upgrading your video card. No new console. With a base price, per game, starting ten bucks less than the other consoles' versions. I just hate that people are missing out, I guess. They have a great little indie setup (I was playing FTL 8 months ago!)and their pay service (known as PlayPack Membership) is only $9.99 USD per month, and you get a great library of games! The service is totally free, otherwise. Well, I will get down off my soap box. I'll only ask that you give OnLive a chance. I think there's room in the market for them. I'll go back to playing Dirt 3 on my HTC Evo 3D, now. Thanks for letting me share.
  • saya-MON - October 17, 2012 11:40 a.m.

    I wish I had $4.8 million.

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