HTC to take $40 million loss due to OnLive changes

The fallout from the changes at the OnLive streaming PC game service continue to be felt. After rumors of a shutdown hit on Friday, the company sent out a brief statement saying that it had been acquired by an unnamed company and that the service would continue with no interruptions.

Now it looks like at least one company is going to lose quite a bit of money from the changes at OnLive. PCWorld.com reports that smartphone maker HTC, which had made a $40 million investment in OnLive in February 2011, revealed in a stock regulation filing today that it would lose that investment. HTC said that the loss was due to OnLive's "lack of operating cash and an inability to raise new capital."

Meanwhile, OnLive itself sent out a statement of its own late on Sunday. Joystiq reports that the mysterious person who has saved OnLive from a complete shutdown is venture capitalist Gary Lauder of Lauder Partners. The company also said that "almost half" of OnLive's previous employees are being hired by the new company, which will still use the OnLive name.

The statement also said that OnLive has 1.5 million "active" subscribers. However, the company has not commented on rumors that it only had an average of 1,800 concurrent users for the service.

Source: PCWorld.com | Image via OnLive

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17 Comments

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OnLive was a really good technology.. but the video compression and (minor) latency killed the gaming aspect, while the restriction on game ownership killed the service.

It would've had a much bigger user base if it was free.. or allowed cross platform gaming. I'd have subscribed for a while if I could've played 360/PS3/Wii games with it.

Bandwidth caps mean that no matter how "awesome" their service is, I'll never use it. Priority goes to netflix and pandora

the same will happen with OUYA console ... Cloud Gaming will only be possible for Giga networks and fully implemented IPv6 on system's.

Fayker said,
the same will happen with OUYA console ... Cloud Gaming will only be possible for Giga networks and fully implemented IPv6 on system's.

OnLive worked **surprisingly** well. Not perfect, but an AMAZING start.

It's a good idea, but perhaps ahead of its time. The current broadband infrastructure for most countries is poor at best. Then there's bandwidth shaping and net inneutrality by ISP's to deal with. I can't see a service like OnLive working at the moment, but maybe I'm wrong

Glad it has been saved! I love Onlive and think its a great idea, looks like a major restructure is required to make things profitable though.

Any idea on how much the company was purchased for? My bet it was a bargain and the assets were probably worth more than what was paid!

Yea it is a good idea and I'm glad it was saved. Sounds like it needs alot of management cleanup though.

I like the service but only use it for free demos, it needs ALOT more games and better image quality streaming options. The games need to look like real PC games and not low res console games. Most games actually look alot worse then the 360 versions when being played.

But.... It's such a good idea, it's where the future of gaming is headed!! What the deuce happened here??!!

este said,
But.... It's such a good idea, it's where the future of gaming is headed!! What the deuce happened here??!!

about 50 similar services spawned in recent years
besides its BS that it play good in multiplayer games, Settlers maybe. FPS/3rd person action, no

ahhell said,
Crooked management happened...that and hardly anyone used the service. (1800 concurrent users speaks volumes.)

Crooked management? Where? It came down to a choice of let the entire company go bust, the service goes down, and everyone gets fired - or form a new company, hire back as many employees as possible and keep the service going. It was the right call in the situation, they just need to try and stay afloat now.

1.5 million active subscribers, at around £6.99 a month is still over £10mil income a month - unfortunately there's a lot of expenses to run a service like this, and they're still not making a profit.

And to be fair on them they tried a lot tactics to get people to join the service - giving out free games, free TV Consoles, etc, and even expanded into other markets like offering streaming Windows & Office clients on iPad's to try and stay afloat. They've tried their damnest, but they've not yet got the market penetration they were hoping for and running such a service is still extremely expensive. Then again, they've done remarkable well for a startup to even get this far.

Edited by ~Johnny, Aug 20 2012, 4:46pm :

Shadowzz said,

about 50 similar services spawned in recent years
besides its BS that it play good in multiplayer games, Settlers maybe. FPS/3rd person action, no

It actually worked really well. One of the most popular games on the service was Homefront. While it was great when it worked 99% of the time, that 1% of lag means that you were ****ed.

Homefront was the most popular game on the service??? LOL!
That game sucked so hard, no wonder the service didnt do well.

este said,
Homefront was the most popular game on the service??? LOL!
That game sucked so hard, no wonder the service didnt do well.

It was popular because it was one of the few large scale multiplayer shooters included in the £6.99 a month subscription. Some of the most active Homefront servers right now are infact the OnLive servers