Update: OnLive has finally issued an official statement regarding the supposed closure. They've confirmed that a new company now holds ownership.
OnLive may not be shutting down, per se, but the service could be bought out by a currently unknown third party.
According to new details that have arisen since the initial report, roughly 50 percent of the OnLive staff lost their jobs today, while remaining employees have received offer letters from the unnamed company. Multiple sources are claiming that employees have been spotted leaving OnLive, carrying moving boxes out of the building.
Though sudden, the news doesn't come as a great surprise. When executive Brian Jaquet insisted the company was not closing down, we speculated whether OnLive would instead be bought out by a third party, similar to competitor Gaikai. High operating costs were cited as a possible reason for OnLive's uncertain situation; former OnLive employees are further stunned to learn that they will not be receiving severance, and stock holdings are practically worthless.
Other reports are claiming that OnLive has filed for ABC, or Assignment for the Benefit of Creditors, an alternative to bankruptcy in the state of California. CEO Steve Perlmen has stated that while the company would no longer exist in its current state, a portion of the staff would be moved to the new company created from what's left of OnLive.