Last Friday, one of gamings more interesting on-demand programs declared a special kind of bankruptcy.
OnLive, a pioneer in cloud gaming, filed for an Assignment for the Benefit of Creditors (ABC). This form essentially says the original company is no longer able to pay its debts and is then handed over to a third party owner until the company can find buyer for their assets, which remain intact long enough to find said buyer. Though it isn’t exactly like declaring bankruptcy ABC still pretty much states, “We’re broke and we can’t pay you.” It’s just now handled by someone else.
Much of this collapse occurred due to the company’s recent expansion to its services. While this slew new upgrades and bonuses grew, the customer base did not.
Thankfully, with the company recently finding a buyer, gamers will not be a part of the company’s collapse. Purchases will remain intact and will still be able to play them. All other OnLive services, devices, apps and partnerships are also expected to continue without any interruption from the switch of company owners.
Ex-employees will have an opportunity to be re-hired and take stock in the “new” company. The company’s press release stated half of OnLive’s former employees would be hired into the new company, receiving the same salaries and positions. But, like most transitions in ownership not all can return or be spared from job loss. In a recent Joystiq article on the subject, Steve Perlman made this very clear:
“Here’s the tough part, and this is the thing I’m very sorry to say: it’s just not possible for one individual in a startup – whether it’s that old startup or this new startup – to bring in this many people into a company,” Perlman said. Without giving numbers, Perlman said that, in the new company, “the people that come on board are the essential people, as needed, to go and accomplish that goal of getting this thing to cash-flow positive.”
The old OnLive, those being the old employees and owners are now gone. With a new owner and a mix of old and new employees the company’s future is foggy to say the least. The company still has to deal with its small user base. They also were able to allow those with a weak PC to play some today’s great games. If they can make more contracts and get more good games they may have a fighting chance.
Unless they can find some way to bring in more players the company will finally meet with a definite end. Let’s hope that doesn’t happen and lose this innovative video game program, especially to those who lack a strong PC to play these games.
Sources:
OnLive Press Release August 20, 2012
