Update: OnLive Transitions Into New Company

Streaming service OnLive has been sold, though exactly how many people lost their jobs remains a mystery.

Game developer Brian Fargo has just announced via Twitter that “OnLive is closed as of today.” According to Fargo, he received an email from employees of the streaming service, which stated that the service would be shutting its doors later today, with all of its current employees losing their jobs.

“I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist,” Fargo reiterated in a series of tweets. “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.”

There’s no word yet on what this new company will be, and how this will affect the recently announced partnership with Ouya. OnLive has yet to confirm the rumors.

We’ll have more updates as they become available.

Source: Twitter

Update: In a statement, OnLive Director of Corporate Communications Brian Jaquet denied that the service was shutting down: “We don’t respond to rumors, but of course not. 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.”

Jaquet did not comment on the rumor that OnLive staffers had been laid off.

Source: Joystiq

Update 2: OnLive has responded to the flurry of rumors involving massive lay-offs, bankruptcy, and the closure of its services in an official statement. Here is that following statement in full:

We can now confirm that the assets of OnLive, Inc. have been acquired into a newly-formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive’s apps and devices, as well as game, productivity and enterprise partnerships. The new company is hiring a large percentage of OnLive, Inc.’s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees. All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services.

While we’re not commenting on additional details, the reports have been way overstated, perhaps because we were unable to respond to initial enquiries until the transaction completed. The management team is intact, the company has substantial funding and we have all our current businesses to run.

While these comments seem to offer at least some explanation as to what’s going on with the service itself, it’s still unclear how many employees have been terminated in the shuffle, a number that’s been reported as upwards of 50% by both an Engadget source.