OnLive confirms acquisition by "newly-formed" company, service will continue

Update: Regarding the acquisition, OnLive has revealed the name of their new parent company. OnLive will be keeping its own name, however.

After an entire day of rumors, OnLive has finally issued an official statement regarding the company's status, confirming its acquisition by a new company.

Details regarding the layoffs are still scant, not surprisingly, but the fate of the company is now clear. In a press release just issued, OnLive stated that a "newly-formed company" now holds ownership over OnLive assets. Though we don't know what company this is, the official press release claims it is "backed by substantial funding."

Regarding the OnLive staff, a large chunk of the staff is supposedly being hired into the new company, with plans to hire more over time. OnLive's leadership, on the other hand, remains intact. There has been no official mention of employees who were let go.

As for the OnLive userbase, rest assured that the service will stay operational with continued support. Read on for the entire source:

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.

Rumors of OnLive's closure began this morning with inXile developer Brian Fargo received word from OnLive staff that they were being laid off. Following his Twitter posts, additional details -- including the now confirmed acquisition -- continued to emerge.