OnLive revealed today that the company's new owner is Lauder Partners, an investment firm with a keen interest in "various realms" of technology. In fact, Lauder was one of the companies that had invested in OnLive back in 2009.
While certain details like the exact value of the deal remain undisplosed, the new OnLive (they've kept the name) released an update regarding the remaining staff. Last week, rumors suggested that 50 percent of the OnLive staff were let go, and today, we're receiving confirmation that less than half of OnLive's employees were offered new jobs:
"Almost half of OnLive's staff were offered employment at their current salaries in the new company immediately upon the transfer, and the non-hired staff will be given offers to do consulting in return for options in the new company. Upon closing additional funding, the company plans to hire more staff, both former OnLive employees as well as new employees."
Additionally, OnLive CEO and founder Steve Perlman will not be receiving any compensation or stock in the Lauder deal. Most executives are receiving "reduced compensation" so that the company may hire more employees while operating within their current budget.
As previously promised, the OnLive service will continue despite all this, though the number of users potentially affected by OnLive's troubles may be fewer than you realize. Reports have suggested that the current user base might sit as low as 1,600. When speaking of OnLive's apparent failure, Perlman commented on scale being their Achilles heel.
Because it was impossible for OnLive to estimate how many servers they'd need, they ended up purchasing too many. Yet these servers had lengthy contracts attached, which left OnLive throwing money away on maintenance when there weren't all that many users actually using them.
"There's no way to exactly estimate how many servers we'd need. So we literally bought thousands of them, and all the equipment and networks to go with it. If you've got 8,000 servers and 1,600 users, how could we ever get to cash flow positive, right?"
So the employees who decide not to join the new OnLive will be offered "a very simple consulting arrangement. Former employees who were present during the transition will be offered stock options in the new startup venture, which may eventually pay off assuming the venture gains value. Any stock belonging to the original OnLive company are now worthless.
Perlman is accepting blame for all this, expressing his regret to employees during his speech on Friday:
"I'm the one that brought you here. I'm the one that ultimately made decisions. And I'm the one that ultimately takes responsibility. So I am sorry, and it didn't end up exactly as we'd hoped."