The video game streaming company has been purchased by VC group Lauder Partners, LLC – helmed by tech investor Gary Lauder. A new company has been created that will make use of OnLive technology. The asset acquisition is described as a “heartbreaking transition for everyone involved with OnLive,” the service itself will continue, with the company reporting that users will notice no interruption in OnLive’s service. In fact, consumers are “not expected to notice any change whatsoever.”
This is in contrast to earlier reports that OnLive will be shutting down its doors as the internet rumor mill continued to crank away at the company’s supposed demise. According to sources familiar with the matter, half of OnLive’s staff was laid off since Friday. OnLive CEO Steve Perlman was in the process of finding a buyer for the company who would be interested in purchasing all the intellectual property of OnLive but would keep the doors open to its services. Part of finalizing the sale included a massive staff reduction as a result of trying to reduce the company’s liability. This included reducing the compensation of the company’s executives as well.
After further reports from a variety of media outlets and sources, the plan is to keep OnLive up and running.
Earlier today, the company released a FAQ for OnLive customers who are currently subscribed to the service:
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.
With Perlman yet to have a title or contract with the new OnLive, Lauder will continue to keep Perlman as the CEO, according to an email. ”Since there is no one more committed to the company than Steve, I’m not too worried,” said Lauder. “It is my hope that he will be the CEO going forward.”
OnLive’s game service streams console and PC games over the Internet and was founded in 2003. Its games can be played on PCs, smartphones, tablets and televisions. It also offers an iPad app that lets users access a Windows PC desktop from their mobile device.
The high-profile company’s former investors included AT&T, HTC, Autodesk, Warner Brothers and Maverick Capital.
Via »OnLive Blog