By Alexandra Burlacu | Aug 19, 2012 09:23 AM EDT
OnLive, the online cloud gaming startup founded by Web pioneer Steve Perlman to bring a console experience to mobile devices, laid off its entire staff on Friday, Aug. 17. The company acknowledged that its assets have been acquired "into a newly formed company" which will provide the necessary funding to keep the service running.
OnLive did not offer any details regarding the parent company that made the purchase, except to say that the firm is "backed by substantial funding." The new acquisition is rumored to be an intellectual property deal, for access to OnLive's patents.
According to a spokesperson for OnLive, the new company "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."
"All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services."
News of massive layoffs at OnLive first surfaced on Friday, Aug, 17, when game designer Brian Fargo tweeted that he "just received an email that OnLive is closed as of today." At first, OnLive declined to offer any comments except to say that it was not going out of business. Company representatives refused to address claims of massive layoffs, but various reports said OnLive employees were leaving the building carrying boxes with their belongings.
The company declined to detail exactly how many people it fired, but it said its "management team is intact." Though OnLive is firing people, "the new company is hiring a large percentage of OnLive Inc.'s staff across all departments and will continue to hire substantially more people, including additional OnLive employees," said Jane Anderson, a spokeswoman for the company.
"We apologize that we were unable to comment on this transaction until it completed, and were limited to reporting on news related to OnLive's business," added the company. According to a report from Mashable, citing an anonymous source, many employees blame the CEO for the failure of the company. OnLive's CEO refused to sell the company on several occasions, to various companies including HP.
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