News first emerged yesterday evening UK time, with games developer Brian Fargo revealing on Twitter that OnLive was sacking its entire staff and closing down operations. Although OnLive initially refused to comment, it became clear that the service was indeed struggling, with a statement released to the press in the early hours confirming the change of ownership.

The statement reads:

“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.

We apologize [sic] that we were unable to comment on this transaction until it completed, and were limited to reporting on news related to OnLive's businesses. Now that the transaction is complete, we are able to make this statement.”

In practice this means that OnLive will continue, although how successful it will be after a night of claim and counter claim between laid off employees and management remains to be seen. With Sony buying rival Gaikai in July, it seems OnLive’s promising first few years are now in tatters.

Via The Verge and TechCrunch

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