For cloud gaming company, OnLive, the phrase “rumours of our death” could not have been more apt, as it seemed that the company, once touted as heralding the future of gaming, was facing its own demise.

The company aimed to host numerous titles on its servers and stream them on demand to a variety of devices, setting the stage for cloud gaming.

Late last week, OnLive was certainly the scene of a dramatic, and confusing change.

Reports swirled that the company was filing for a form of bankruptcy amid total staff layoffs. The latter, according to TechCrunch, was apparently done as an exercise in reducing the company’s liability by slashing its employee equity. Indeed, tweets by the likes of game designer Brian Fargo confirmed the rumour, relating one of OnLive’s previous employees who stated:

“I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone else's was included. A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service.”   

Some fall, others rise

Indeed, a subsequent report by Kotaku added that the company was filing for an alternative to bankruptcy known as Assignment for the Benefit of Creditors.

While the actual impact on OnLive and the gaming revolution it promised may not be as dire as first indicated, the company has confirmed that in name, OnLive is no more. Instead, it has been taken over by an as yet undisclosed entity. In a statement to The Verge, OnLive finally clarified its situation, stating that “the assets of OnLive, Inc. have been acquired into a newly-formed company.”

This is apparently being backed by substantial funding, with the new company “continuing  to operate the OnLive Game and Desktop services, as well as supporting all of OnLive's apps and devices, as well as game, productivity and enterprise partnerships.”

Silver linings

The statement continued that the new company would hire a large percentage of OnLive, Inc.'s staff across all departments, while pursuing plans to “continue to hire substantially more people, including additional OnLive employees.”

It added that, all previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services.

Management further apologised for being unable to comment on the transaction until it completed, explaining that they were limited to reporting on news related to OnLive's businesses.

To the point

More interestingly, the drama highlighted how quickly the sands may shift under even the most promising of start-ups. No less notable is the apparent number, and accuracy, of leaks that were being disclosed, about the mass layoffs and the bankruptcy alternatives, even as OnLive’s management were remaining silent.

Nonetheless, it seems that, at the present moment, while OnLive as a company may be no more, its services – and the promise of delivering a cloud gaming solution, will continue.