OnLive saved by buyout after server bills kill service

Game streaming service OnLive was hit by a financial crisis caused in part by high server hosting bills that forced the company to sack most of its staff. A buyer has stepped in to buy the company at the last minute, although jobs are still likely to be lost.

Anyone wondering how OnLive can afford to run all those servers and high speed connections to serve up games over the net, here is your answer – they can’t. The high cost of running its data centre is one reason why OnLive management was forced to lay off most of its staff this week.

OnLive offer PC and console-quality games over the internet – the actual processing being done on OnLive’s servers, allowing the games to be played on less powerful devices like tablets and smart TVs. The technology has recently appeared on some Google TV devices.

Staff were surprised this week when management spelled out the financial difficulties they were experiencing and gave all non-critical employees their notice. OnLive was able to take advantage of Californian business laws that allow a company to continue trading under a new owner after an unnamed buyer stepped in. Sadly, it looks as though most of the staff will not be rehired, although some may serve in a consultancy role.

Where does this leave OnLive subscribers? The company say it is business as usual, but this must affect the rate of future sign ups. If things were this precarious before then it wouldn’t be surprising if people were a little wary about subscribing in the future. The effect all of this will have on srrvces like Google TV remains to be seen but it looks as though offering OnLive support may not be the bonus it once seemed.

(via MacWorld)

About author
Stuart Houghton has been writing about technology for over a decade and messing about with it since he was old enough to press buttons. Stu is the former UK Editor of Kotaku.com and specialises in tech writing for several UK publications. He is also part of the IT team for a major UK charity.

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