OnLive Closes its Doors… Then Re-opens Them As OnLive

Within the realm of cloud gaming, OnLive has been around since the beginning. It might even be considered a “spearhead” by many for the technologies and goals it pushed forward. Despite that, the company hasn’t seen the success of some of its competitors – namely Gaikai – even though it’s been fed some hearty investments. This resulted in the company needing to take action, such as to restructure itself, in order to better tackle its near-future challenges.

With bankruptcy not a viable option, as assets would be lost, OnLive took advantage of what many are calling a loophole in the United States’ legal system and passed along 100% of its assets to a proxy (or assignee), who then sold them back to a newly formed company operating under the same name of OnLive. This is akin to a company starting out brand-new but already having a viable business in place.

Unfortunately, because of this move OnLive’s previous stock has been rendered worthless. Yes, that means that investors are now at a loss, including HTC which invested a staggering $40m into the company just last year. In addition, this move prevented anyone aside from management from being transferred over to the new company, but so far about half of the company’s previous employees have been re-hired. Those not re-hired will have the ability to buy stock at a later date.

How OnLive’s move here is entirely legal, I’m not sure, but it is going to leave its previous investors rightfully angered. At the same time, it seems unlikely that OnLive will ever see any new investors – because who in their right mind would? Well, kicking things off, it does seem there was one interested investor; Lauder Partners. The terms of that investment are not known, but it’s likely that it comes nowhere close to previous investments the company has seen.

I admit that at first, I liked what OnLive was doing, but after this move, the company is impossible to respect.