Onlive Assets Transferred to New Company, Not Shutting Down Services

Despite a brief period of rumor, speculation and corporate subtlety surrounding a business transaction, cloud game streaming company Onlive will not be going under due to bankruptcy as initially believed, and has not been purchased outright by another company.

Onlive has, however, had its assets moved to the ownership of another company, one that has remained nameless throughout the course of these events. This transfer was reportedly some state-level bankruptcy safety measure that acts as an alternative to simply sinking the company where it stood.

The following statement was released to Kotaku this weekend and alerts customers that their paid-for services will continue unabated:

“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.”

Associated with these rumors of closure were the claims of Onlive employees outside of their corporate office leaving with boxes of belongings in tow, believed to be fired en  masse. From our understanding of the situation, based on tweets from inXile’s Brian Fargo and IDG’s Martyn Williams, employees were confirmed to have been physically leaving the company in groups.

While no real numbers have been confirmed by Onlive (or the new owner), “at least 50 percent” were let go from the company, according to Engadget.

We’ve reached out to Onlive for more information on the matter, but it appears (based on the company’s above statement) that the majority (if not all) of those previously fired employees could be handed their jobs back.

As for the current status of those employees in question, we’ve learned from Joystiq’s discussion with an anonymous (but confirmed) employee of the company that all laid-off folks will keep their benefits packages until August ends, with the option to sign up with COBRA at the beginning of next month. Also, they may be rewarded in company stock — a funny reward, seeing as how the company is not (yet, at least) publicly traded. Finally, ex-employees did receive a “termination package” which awards them a check for their final week of work, as well as any unpaid part-time off pay.

However, if you’re a worried Onlive customer, it appears you shouldn’t be, as apparently all Onlive-related services will continue in the future. Seeing as how the company just  narrowly dodged bankruptcy, though, here’s to hoping they can keep their head above water going forward.

If they do fall into any more trouble, we’ll let you know.

[via Joystiq, Kotaku, Brian Fargo & Martyn Williams]