Rumours Abound That OnLive May File For Bankruptcy

Gosh, this is a little out of the blue. Kotaku are reporting tonight that cloud gaming pioneers OnLive are about to declare bankruptcy. This comes from someone they say is a source inside the company, despite OnLive's PR denying the rumour. OnLive is of course a service that allows you to stream games directly onto most web-enabled devices, letting you play tech-needy games on the most basic laptop or smart phone. It's hard to imagine how this won't be the future of at least console gaming. But maybe the world isn't ready just yet.

Kotaku's source told them it was no secret that things were tough amongst OnLive employees, and this morning their CEO informed staff that they would be filing for "ABC bankruptcy". This will apparently protect them from creditors. He then told them that OnLive would no longer be employing anyone, but some would go on to work at whatever company rises from their ashes. OnLive won't respond directly to these claims, but says they're not closing.

People were first made aware that something might be up when Brian Fargo tweeted that he'd received an email saying that the company was closing. An email the sender seemed to wish they hadn't sent. But when Joystiq spoke to OnLive they were curtly told, "We don't respond to rumours, but of course not". They then went on to plug to both K and J that something called VIZIO Co-Stars had been released today.

So who knows. One version of the story can't be quite true. Could it be that something called OnLive will carry on if the former company closes? Or is this a disgruntled employee trying to cause trouble? How should we know - we're only part-time ballerinas.