Trouble At OnLive

Lashat writes "News of trouble at cloud gaming provider OnLive is trickling out of various sources. According to Forbes, all employees received their walking papers today. Rumors of a shutdown, buyout, or re-formation as a new company are plentiful, but the company hasn't announced anything yet. The article quotes an email sent to InXile CEO Brain Fargo from an employee within the company: '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. It has been an absolute pleasure working with you and I'm sure our path with cross again.' OnLive's Director of Corporate Communications told Forbes, 'No, let me be clear. We are not going out of business.'" While the question of whether OnLive-as-an-entity will continue is still up in the air, an internal source confirmed to Gamasutra that OnLive's entire staff has been laid off, and OnLive employees were seen outside headquarters with 'moving boxes.' Kotaku says the company has filed for protection against creditors in California (not bankruptcy, but similar).

Comments

It's true

[Caerdwyn]

Ex-Onlive employee here (I left a couple of years ago). I've been hearing from my OnLive friends... yup. Big big layoff. Hire these people if you see 'em, folks, they're good workers who know their stuff and have a work ethic.

The tech works, and has been fine for almost three years now; I was doing all my gaming through OnLive when I worked there, and was about 50 miles form the data center. The trouble as I see it is the same that I saw back when I left: it ceased being a technology play when it worked well enough, and turned into a business development play. They needed to:

• sign the majority of the major publishers
• get them to release new titles simultaneously with physical retail
• convince the publishers to charge somewhat less than physical retail and
• form revenue-sharing-based transit agreements and peering deals with major ISPs to keep OnLive traffic out of the bandwidth caps

Unfortunately, none of the biz dev plays were driven to success.

Tech is easy. Business is hard. CUtting deals is hardest of all.

Still was going to have a real tough time

[Sycraft-fu]

They can crow all they like about tech, the fact of the matter is that latency, which will be interface latency with remote video rendering, and quality will always be problems. Onlive promised to offer "maximum quality" on any device. The idea that instead of a $2k gaming rig you could get that on a cheapie computer. Ok well that might have been cool. However instead you got a 1280x720 4:2:0 video stream that was heavily compressed. That meant low rez and a loss of fine detail. Hence really you were getting the kind of thing that a low end video card or even integrated video can offer, and of course those don't have latency and downtime issues.

When the day comes that everyone has high end internet connections, maybe it is more feasible. However when you are trying to compress to a 1 mbps stream, quality won't be so impressive compared to cheap systems and that makes it a hard sell.

Re:Still was going to have a real tough time

[Caerdwyn]

Where do I begin...

With OnLive, you could play Crysis at 30fps on medium settings at 720p on a Celeron-equipped netbook with an Intel GMA950. So no, you were not getting the kind of thing integrated video can offer.

Latency depends entirely upon the quality of the network link between you and the data center. OnLive was not intended for people in Yellowknife or Cheyenne or the Azores; it was for people in densely-populated well-wired urban areas in which they had data centers. That's a lot of people, but no, it's not everyone, nor is there any sort of requirement that it be for everyone. Part of the setup was a latency/bandwidth test that you were supposed to run before you signed up. And if your ISP oversubscribed your last-mile connection to the point where you couldn't use it between 7pm and 10pm... yeah, that's a problem, but it's not universal, and it's not anything OnLive could do anything about, any more than Ford is responsible for whether on not your street has potholes. I suggest beating your ISP over the head with a lead pipe in such cases.

Yes, there's a loss of single-pixel detail. It's not perfect, and there is no requirement that it be so (any more that there is a requirement that lossy audio be forbidden for sale). Expectations must be reasonable (as must expectation-setting).

OnLive's video was tuned for 4 to 6 mbps with less than 30ms of latency, with low packet loss (less than 1%). Under such circumstances, it did well. When network conditions deteriorated, it had some automatic fallbacks to keep the framerate above 30fps for as long as possible; it would remain at least usable down to 2.5mbps/5% loss, though it wasn't pretty under those conditions. It was far, far more than glorified RDP and VNC (it wasn't a video memory buffer; the hardware captured and processed the digital video stream from a DVI interface and the digital audio stream as taken from SPDIF outputs, and injected control with a virtual USB HID). It was good tech. Low latency was achieved by essentially running unbuffered and a couple of other things that I'm not sure whether I could talk about yet.

But as I mentioned earlier, the real failure was the inability to make the deals with third parties that would turn that tech into something worth paying for.

Was just a way to remove employee equity?

[Graemee]

It been reported that this move to fire the staff was just a way to remove the employee equity in the company, thus making the owners more of a share of the sale price. Steve Perlman may be a giant Scrooge. http://techcrunch.com/2012/08/17/source-onlive-found-a-buyer-cleaned-house-to-reduce-liability-prior-to-acquisition/

that is why we need unions in TECH

[Joe_Dragon]

that is why we need unions in TECH so employee don't get f* over.