OnLive’s financial crisis has been revealed to be far worse than previously believed, as Insolvency Services Group CEO Joel Weinberg announced that the cloud gaming company owed approximately $30 million to $40 million when it collapsed last week.
According to Weinberg, OnLive was in such “dire straits” that it was facing a complete shutdown after failing to find a buyer. As a result, ISG stepped in to keep OnLive from going into bankruptcy and has since sold off the company’s operating assets to Lauder Partners, LLC.
“It was a company that was in dire straits,” stated Weinberg. “It only had days to live in terms of cash flow and the like. Something had to be done immediately or there would have been a hard shutdown, which would have been a disaster.”
Now owned by Lauder, the new company will continue to operate as OnLive, but will do so with only about half of its original staff. Based on its current but incomplete evaluation of OnLive’s assets, Weinberg expects to pay creditors back only 5 to 10 cents per dollar owed. It is assumed that investors HTC and British Telecom, who were already considered likely to write off their investments, will now have even more reason to do so.
What’s your take on the entire OnLive situation? What do you think its impact will be on cloud gaming? Let us know in the comments section below.