OnLive rumored to be shutting down ... or not? [Update]

The first company that launched a true streaming PC game service may be closing its doors. New, but still unconfirmed, reports claim that the company fired all of its staff earlier today.

Mashable reports, via unnamed sources, that some of OnLive's staff could be hired back as the company makes a transition to some other kind of organization. The same report blames the firings today on the hands of OnLive's CEO Steve Perlman, whom the employees said refused to sell off the company, even though he had the chance to do so "many times."

Launched in June 2010 in the US, OnLive secured deals with a number of major PC game publishers to stream their games to PCs and Macs, and it also sold a small hardware set-top box to add TV support. The service launched in the UK in September 2011. In December, OnLive launched iPad and Android tablet support for its service. In January it launched OnLive Desktop, which allowed users to use a version of Microsoft Office on the iPad.

It is currently unknown if OnLive subscribers will be able to get refunds. It's also unknown how OnLive users who purchased full games from the service will be able to play those games if OnLive is indeed shutting down. OnLive had a total of over 300 games available for streaming.

Update: Joystiq has heard from OnLive's head of communications who says that the service is not shutting down but would not confirm if the company had experienced layoffs today.

Update 2: Engadget now is reporting that OnLive has fired 50 percent of its staff, with no severance, and that the remaining team members have received offers to join a new company that will reportedly be buying OnLive.

Update 3: Joystiq has now received a statement from OnLive claiming that the company has been acquired by another, currently unnamed, group, and that all OnLive's services will continue to be operated.

Source: Mashable

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"According to Kotaku, Onlive had an all-hands meeting this morning and announced that the company was filing for bankruptcy. A new company would be formed from the ashes and some some employees would be rehired by the new entity in order to continue operations. "

This would be rather shocking, since Ouya just announced a partnership with OnLive just a few weeks ago..

That said, their system never appealed to me, and I wouldn't be shocked if it wasn't successful.

Good. OnLive sucks. They double charged me for their service one month and then ban me when I logged in using a different IP saying I was sharing my account.