Rumors are swirling that OnLive was shut down today after InXile Entertainment’s Brian Fargo tweeted that a friend of his inside the company said everyone had been let go. The tweet read: “Just received an email that OnLive is closed as of today!” and Fargo also recieved an email from the same OnLive employee stating:
“I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone else’s was included. A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service.”
This report was later supported by Mashable whose inside source stated:
“According to a source close to the situation, the company called an all hands meeting at 10am PDT, at which the entire staff was fired. Some staffers may be rehired as the company transitions to its next unknown iteration.”
However, just recently OnLive’s Director of Corporate Communications Brian Jaquet made a statement on the issue by stating: ”We don’t respond to rumors, but of course not.” Although when asked about whether the entire staff was being laid off all he would confirm is ”the OnLive service is not shutting down.” He did make a statement about OnLive services that are available right now:
“The exciting news is that the first VIZIO Co-Stars (Google TV stream players) with the OnLive app built-in have just arrived in customer homes, and our second of three ‘Indie Giveaway Weekends’ is going on now. OnLive users can get a free copy of the award-winning games Space Pirates and Zombies and SpaceChem.”
That is not a statement a company would make if their service was just about to be shut off. On the other hand not denying all those people had been laid off is also not a good sign. Now Kotaku is reporting that OnLive will be filing for bankruptcy in the very near future and that OnLive will be transitioned into a new company.
According to Kotaku’s sources that 10am meeting actually happened and that CEO Steve Perlman told everyone that OnLive would be “filing for ABC bankruptcy in the state of California”. In addition, according to the source Perlman also stated that OnLive would “cease to exist” and that no one would be employed by OnLive. Although some employees would be brought over to the new project, at least according to the report.
At this point the Kotaku report is still just a rumor, and I would take it with a grain of salt because they are not always right. But the only thing OnLive is disputing is that OnLive will not be closed, they have yet to deny that everyone has been laid off, and where there is smoke there is usually fire.
But if they have fired everyone and are going to file for bankruptcy we will probably find out in a matter of days. We will try to update this story as we get more information.