Oh crikey. You may remember in August that online game streaming service, OnLive, was in a spot of bother. Stories of impending bankruptcy came on the heels of a company that had previously been valued at an extraordinary $1.8bn. The next day news came that despite lay-offs, a buyer had been found, and "substantial investment" was being put into the company to keep it going. But what's been revealed today, reported by the BBC, is that it was sold for only $4.8m. That would be 1/375 of its previous estimated value. Or 0.27%.
Two billion seems likely to have been a bit of a silly figure. The main rival to OnLive, Gaikai, was sold to Sony for a considerably smaller $380m this year. But still, you know, 80 times more than OnLive received.
This figure was discovered by Mercury News, who got hold of a letter detailing the deal, intended to be seen by creditors. It explains that the company was in at least $18.7m worth of debt, meaning that creditors will only receive 26 cents per dollar they're owed.
It seems things were getting pretty desperate, with OnLive ready to liquidate its assets, stopped at the last moment by the seemingly paltry offer from venture capitalist Gary Lauder. For just $4.8m he picked up, well, a big pile of debt, but the belief that the problem was a lack of initial investment. Which is, well, bold. So a company that likely won't be paying back its shareholders after the first flop, is now planning to borrow even more. I do not understand money.
So for now, at least, OnLive continues, and should hire back 50% of its former staff. However founder Steve Perlman has chosen not to stick around. Which still leaves the rather big question: is streamed gaming the future?
On some level it seems hard to imagine how it couldn't be. With fast enough internet tubes, it allows anyone to play a game at the very highest specs with the minimum of technology. It makes the need for upgrading systems or consoles defunct, while removing all possibility of piracy. It's the ultimate form of always-on DRM. And thus it also loses the faintest wisp of the concept of ownership that we may still have. So you can see why it's a confused mix of benefits and serious concerns. But all this aside, it's still hard to shake off the idea that it's just too early. The average internet just isn't good enough to use it usefully, and we're far too far at the wrong end of a console cycle for people to feel that necessary technology is out of their reach. If it's going to have its day, I'm sure it will still be a while away. How about you?