OnLive Not Closing, Just Bankrupt and Laying Off Employees

When news broke this morning that cloud gaming service OnLive could be closing its doors, the collective world was shocked. How could a service that plays jittery versions of PC games be in jeopardy? They even had an E3 booth showing off how good Darksiders II ran on PC. Yet, employees seemed to hint at just that:

 “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 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.”

An inside source also that stated that CEO Steve Perlman told the staff that the company was filing for bankruptcy, and that no one would be employed by the current OnLive going forward. While there has been many reports from employees stating similar things, OnLive director of Corporate Communications, Brian Jaquet, has thankfully denied all the rumors:

“No, let me be clear. We are not going out of business.”

“We don’t respond to rumors, but of course not.”

“We can’t comment on rumors, but OnLive is just fine,”

I’m glad we got that all sorted out. We were worried for a minute there, but those detailed statements prove OnLive will be just fine. We’ll follow this brouhaha throughout the day and make sure to keep you posted.

[UPDATE] ComputerWorld is reporting that OnLive has been purchased by an unnamed company and will continue under new management. Employees have indeed been laid off, with some being rehired into the new company.