Twist! - OnLive Bought, Gets 'Substantial Funding'

Things were looking pretty grim for OnLive earlier, but now they're just looking... confusing. The service found itself looking at a seriously stormy forecast (with a strong chance of bankruptcy - something not generally followed by a rainbow - figurative or otherwise), with reports of lay-offs flying out of the woodwork at an alarming rate. OnLive, meanwhile, coped by adamantly refusing to comment - only making the whole situation look even more dire. Apparently, though, things aren't quite as bad as they originally seemed. OnLive's taken a big hit, but it's not down for the count. The cloud gaming pioneer's been purchased, and it plans to hire and re-hire "a large percentage" of former staff members.

Here's the OnLive's statement on the matter, as received by VentureBeat.

"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 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."

So basically, it sounds like OnLive was up to its eyeballs in financial quicksand until some unnamed benefactor yanked them out at the 11th hour. Elsewhere, however, things don't sound quite as rosy as the fallen Cloud Lord is making them out to be. Joystiq, for instance, has heard tell that OnLive let go of "at least 50 percent" of its staff. If true, that means it's got a lot of rehiring to do.

For now, though, there's not much else to say - mostly because no one's really talking. Hopefully we'll find out more soon, seeing as transactions involving billion-dollar companies tend not to stay quiet for too terribly long. As for cloud gaming in general, meanwhile, I'm not actually very worried. OnLive got too big for its own good, while more forward-thinking companies like Gaikai stayed flexible and - if things keep to their current course - may well end up driving the next console generation. So cloud's here to stay, but only time will tell if one of its first big standard-bearers will be backing it up.