OnLive’s New Status Quo Revealed
In the wake of the surprise news of cloud-streaming gaming company OnLive’s sudden death and immediate resurrection, the company has issued a press release to explain the new status quo. According to the new iteration of the company, which is also called OnLive, “an affiliate of Lauder Partners was the first investor in the newly-structured company.” Lauder Partners, it seems, is an investment firm that tends to work in the tech sector, making this particular venture a pretty perfect fit.
The company restructured under an “Assignment for the Benefit of Creditors,” at which point the company’s assets and technology were sold to the new version of the company. However, this meant that all stock and shares owned in the previous incarnation of the company were rendered completely worthless—meaning if any of the (now laid off) employees of OnLive had been given shares as compensation for work done for the company, they’re more or less S.O.L. That goes for basically everyone who held shares, including former investors and executives.
However, the press release notes that nearly half of the former employees were offered positions with the new company at their current pay rates, while the rest of the staff were offered to work as consultants “in return for options in the new company.” My interpretation (and therefore, as a disclaimer, this is very much speculation on my part) of that last bit is that they’ll likely keep working on the same projects and in the same capacity that they were before, but on a freelance basis—meaning no benefits, and probably a cut in pay. The release also says that many of the non-hired employees will, in fact, be offered new positions in the company as time goes on.
The press release goes on to claim that its subscribers—which it pegs at over 2.5 million, with over 1.5 million being active—will experience no change in service nor any interruptions.
Now, the only question that really remains is why—why has any of this gone down? What’s the reason for all this hoopla? The press release does little to explain the situation, saying only that the company’s board of directors were “faced with difficult financial decisions for OnLive.” As the days and weeks go on, don’t be surprised as more details shake out of this mess. Our condolences go out to anyone who’s lost a job in this most recent story of game industry implosion.