OnLive Acquires OnLive

techfun89 writes with an update on OnLive shutting down. From the article: "The restructured OnLive has issued an press release and FAQ to attempt to clear up any rumors and misinformation on the companies recent changes. OnLive is emphasizing that the streaming game service will go on uninterrupted and the 'Newly formed company' will continue to use the OnLive name. The press release also outlines the Assignment for the Benefit of Creditors (ABC) process OnLive used to settle debts and that an affiliate of Lauder Partners, a technology investment firm, was the new OnLive's first investor. The firm talked about the necessity of laying off its staff, stating that 'neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction,' and confirming that nearly half of the previous staff had been offered positions at the new company. The new firm mentions that this acquisition holds hope for the future 'of transforming the OnLive vision into reality.' This effectively means that OnLive was essentially bought out by OnLive, or rather, more specifically, one of their original investors in the company who backed the startup back in 2009."

Comments

heh

[Anonymous Coward]

Xzibit's head just blew up

Re:heh

[Anonymous Coward]

You're a racist.

Re:heh

[Anonymous Coward]

Thank you for showing us two kinds of ignorance with one post. Idiot.

Re:heh

[crafty.munchkin]

No, race doesn't come into it - whilst Xzibit claims to be a musician, the drivel he produces is insulting to anyone with any form of taste in actual music.

we're fucked

[MickyTheIdiot]

just like we said. Corporate bastards can do anything the fuck they want.

Re:we're fucked

[Anonymous Coward]

Yep - that's why you are lucky to have a job, bitch. You are just a peon.

Re:we're fucked

[rhsanborn]

I've put together a plausible scenario based upon the really vaguely written press release. I have no inside knowledge of the situation. If you know more, please correct me.

It sounds like an original investor held shares in OnLive(1). He lost all of his original shares of OnLive(1) just like everyone else. Rather than pump more of his own money into OnLive(1) and remain saddled with debt and overhead, he chose, along with others, to put the company through the bankruptcy process. Remember, he paid his own money to help start and run the company. He has no obligation to continue to support it personally.

He then used his own money to found OnLive(2). He used his own money in OnLive(2) to purchase the latent assets left in OnLive(1) and then proceeded to offer jobs to employees from OnLive(1).

So, it doesn't sound like all the investors in OnLive(1) divested the employees, kept their own shares and started over after screwing over the staff. It sounds like investor(s) bootstrapped a whole other company with a whole bunch more of their own money and bought the assets of the shell of the original company.

Re:we're fucked

[six025]

... a plausible scenario ...

I think you meant to say this.

Re:we're fucked

[whoever57]

He then used his own money to found OnLive(2). He used his own money in OnLive(2) to purchase the latent assets left in OnLive(1) and then proceeded to offer jobs to employees from OnLive(1).

Purchase? From whom? Not the shareholders of OnLive(1) -- they get nothing. Perhaps the creditors of OnLive(1)?

Does anyone know how much OnLive(2) paid for the assets? Did OnLive(2) pay a reasonable price?

Re:we're fucked

[Anonymous Coward]

Yes, from the creditors. ABC means "assignment for benefit of creditors".

Re:we're fucked

[nedlohs]

As usual, the shareholders will get whatever is left after the debtors get paid. Which will very likely be nothing since the company was bust. That is how it is supposed to work (unless you are an investment banker in which case you get a government bailout instead).

I'm sure there'll be law suits filed if they didn't pay a reasonable price (and probably if they did anyway) or if the transaction wasn't sufficiently at arms length.

Re:we're fucked

[Sir_Sri]

Depends how much they actually had in debt too. They might have wound up *before* they had unmanageable debt, but just very low income, or they might be completely screwing nearly all of their creditors out of their investment.

Re:we're fucked

[gl4ss]

it sounds like they had arranged the buyer beforehand, that way it's easy to say that they didn't get as good a deal for the assets as possible.

but for example htc just wrote down 40 million they put into the firm this year! and the onlive douche said last year that onlive was profitable, on forbes.

Re:we're fucked

[Anonymous Coward]

You can be profitable and still be bankrupt. In 2008 one of the local law firms went bankrupt, they were profitable, but they didn't have the necessary cash flow to service their debt and were forced to go into liquidation. Something like that could have happened here where the firm was technically profitable or barely profitable and now can't service the debt.

Re:we're fucked

[Anonymous Coward]

So basically you've just backed up what he says. The corporations get to discharge all their debt by just going bankrupt and buying their previous assets at pennies on the dollar. Yeah, totally fair.

Re:we're fucked

[Anonymous Coward]

Exactly. If you've ever been part of a venture-backed firm, you'll know that the VCs make you do unnatural acts for their investment, because they are convinced they know the market better than you. I'd be willing to bet Lauder saw the contractual and operational knots the other partners had put OnLive in, realized it couldn't be successful with that band of yahoos dictating the company's direction, and was willing to put money in ONLY if they could restart the firm with a clean slate.

I'll be surprised if they bring any other firms in for a long while.

Re:we're fucked

[gl4ss]

You can be profitable and still be bankrupt. In 2008 one of the local law firms went bankrupt, they were profitable, but they didn't have the necessary cash flow to service their debt and were forced to go into liquidation. Something like that could have happened here where the firm was technically profitable or barely profitable and now can't service the debt.

that doesn't really sound like what happened because then you could emerge from the bankrupcy protection unscathed. if onlive truly was profitable and went bankrupt then it was done by management on purpose to screw over investors(to enable them to move the assets in one piece to the new entity).

Sounds Like a Shell Game

[sanman2]

Sounds like some loophole method of getting out of your debts

Re:Sounds Like a Shell Game

[guttentag]

Sounds like some loophole method of getting out of your debts

Exactly. From TFA:

Unfortunately, neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction, but almost half of OnLive’s staff were given employment offers by the new company at their current salaries immediately upon the transfer, and the non-hired staff will be given offers to do consulting in return for options in the new company.

So basically, "you're fired. Now, you can come back to work for us with no pay, just stock options that will be worth absolutely nothing when we do this again."

Like all shareholders, neither Steve [Perlman] nor any of his companies received any stock in the new company or compensation in this transaction at all. Steve is receiving no compensation whatsoever and most execs are receiving reduced compensation to allow the company to hire as many employees as possible within the current budget.

Right. Any time a CEO works for "no compensation whatsoever," it means they have an agreement in place for a ton of shares or options down the road. So, in effect, he makes it look like he got wiped out like everyone else, when in fact his compensation has just been swept under the rug/shell for safe keeping.

Re:Sounds Like a Shell Game

[rhsanborn]

It sounds like losing your ass, and then doubling down and pumping a bunch more money in to buy up the assets after bankruptcy, which is really risky. It assumes no one else would swoop in and get into a bidding war to try to offer creditors a better deal and you get nothing with the money you spent so much time putting together.

Re:Sounds Like a Shell Game

[Luckyo]

Not in the current financial climate. Banks are really tight with loans right now, and getting sums like this quickly is not easy without financing. If the guy had funds prepared, he essentially had the deal in the pocket.

Re:Sounds Like a Shell Game

[Nationless]

I can't wait for the lawsuit where they sue the new OnLive for copyright breach and take them(selves) to court.

Re:Sounds Like a Shell Game

[wh1pp3t]

Sounds like some loophole method of getting out of your debts

GM did it in 2010 and appears to be ready to do it again soon.

Re:Sounds Like a Shell Game

[c0lo]

Sounds like some loophole method of getting out of your debts

Not quite. My understanding: after putting their money down (and loosing them with the bankruptcy), one (Lauder Partners) of the original investors decided to throw more money.
They want a better control on how these extra money are going to be used, but they have little or no control on how much of their original investment are going to recovered (they have no control over the "Assignment for the Benefit of Creditors" process).

Re:Sounds Like a Shell Game

[Sarten-X]

Sounds like some loophole method of getting out of your debts

Exactly.

Not quite. It does probably let them get out of long-term contracts and service agreements, and wipes the slate clean for future expenses. Assets that were previously locked in can now be dumped. While there may be some debt that is escaped, I doubt it'd be worth the financial damage from trying to rebuild what has to be sold off to cover those debts.

The other important detail is that it means the original company has effectively gone bankrupt. Everyone who contributed money to the original OnLive project (by buying stock) has lost their investment. That's where the money for debts came from.

So basically, "you're fired. Now, you can come back to work for us with no pay, just stock options that will be worth absolutely nothing when we do this again."

More like "Your employer has gone bankrupt, and the company that bought it doesn't want to pay for you all, but they want you to stay involved and stay in the loop for whenever they do hire again"

Right. Any time a CEO works for "no compensation whatsoever," it means they have an agreement in place for a ton of shares or options down the road. So, in effect, he makes it look like he got wiped out like everyone else, when in fact his compensation has just been swept under the rug/shell for safe keeping.

Stock options are compensation. In effect, he's still working toward the goal of having OnLive functional and eventually even profitable, but this time without the expense of his own salary. Perlman has a long history of chasing crazy ideas, so I think it's perfectly reasonable that he treats this company as a hobby... great if he can make money off of it, but pretty fun if it just works.

Re:Sounds Like a Shell Game

[ToastedRhino]

Sounds like some loophole method of getting out of your debts

Exactly. From TFA:

Unfortunately, neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction, but almost half of OnLive’s staff were given employment offers by the new company at their current salaries immediately upon the transfer, and the non-hired staff will be given offers to do consulting in return for options in the new company.

So basically, "you're fired. Now, you can come back to work for us with no pay, just stock options that will be worth absolutely nothing when we do this again."

Like all shareholders, neither Steve [Perlman] nor any of his companies received any stock in the new company or compensation in this transaction at all. Steve is receiving no compensation whatsoever and most execs are receiving reduced compensation to allow the company to hire as many employees as possible within the current budget.

Right. Any time a CEO works for "no compensation whatsoever," it means they have an agreement in place for a ton of shares or options down the road. So, in effect, he makes it look like he got wiped out like everyone else, when in fact his compensation has just been swept under the rug/shell for safe keeping.

I'm confused. First, when they say half of the employees will be invited back as consultants, compensated in options, you say that those will be worthless and imply that options are therefore shitty compensation. Then, when discussing the CEO you say that if he has received options that will be sweeping his compensation under the rug, implying the options will be worth something and the CEO will get rich off of them. Sounds really, really contradictory to me, and yet somehow is modded Insightful. What am I missing?

That being said, there are most definitely some shady dealings going on here.

Re:Sounds Like a Shell Game

[gl4ss]

well, it's options to the _new_ onlive. this time it's legit! /s

Re:Sounds Like a Shell Game

[Anonymous Coward]

I can't wait for the lawsuit where they sue the new OnLive for copyright breach and take them(selves) to court.

Actually I think that has happened once. I can't remember what company it was but there were 2 divisions within the same multinational who got pissed at each other and sued.

It was like Sony Music suing Sony Electronics (this isn't the actual case, just a visualisation of what happened). The judge thought it was a joke and forced them into mediation instead.

Re:Sounds Like a Shell Game

[Surt]

Well, I don't know if it applies here, but CEOs and peons are typically compensated in different classes of shares, which results in the CEO having some protections in the next bankruptcy that don't apply to the peon's shares.

Re:Sounds Like a Shell Game

[DuncUK]

Should keep the cross-examination simple: "I can't handle the truth!"

Re:Sounds Like a Shell Game

[tolan-b]

Pretty sure it was Sony Music and Sony Computer Entertainment. Quick google didn't throw anything up though.

Re:Sounds Like a Shell Game

[VisceralLogic]

Sounds like some loophole method of getting out of your debts

Exactly. From TFA:

Unfortunately, neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction, but almost half of OnLive’s staff were given employment offers by the new company at their current salaries immediately upon the transfer, and the non-hired staff will be given offers to do consulting in return for options in the new company.

So basically, "you're fired. Now, you can come back to work for us with no pay, just stock options that will be worth absolutely nothing when we do this again."

Like all shareholders, neither Steve [Perlman] nor any of his companies received any stock in the new company or compensation in this transaction at all. Steve is receiving no compensation whatsoever and most execs are receiving reduced compensation to allow the company to hire as many employees as possible within the current budget.

Right. Any time a CEO works for "no compensation whatsoever," it means they have an agreement in place for a ton of shares or options down the road. So, in effect, he makes it look like he got wiped out like everyone else, when in fact his compensation has just been swept under the rug/shell for safe keeping.

So, paying other people with options is bad because they're worthless, and paying himself with options is bad because he's enriching himself? Make up your mind, are they worth lots or little?

Re:Sounds Like a Shell Game

[Anonymous Coward]

Don't worry, as one of the original investors (probably one of the largest) they will probably end up with the largest slice of the recovered funds (ie the money they paid in to OnLive2 goes right back to them as a proportion of their original investment in OnLive1)

So if they are 50% of the debtors, they get 50% of their money back that they just paid for OnLive1.

Sounds like a great deal if you can get it.

Re:Sounds Like a Shell Game

[c0lo]

Don't worry, as one of the original investors (probably one of the largest) they will probably end up with the largest slice of the recovered funds (ie the money they paid in to OnLive2 goes right back to them as a proportion of their original investment in OnLive1)

So if they are 50% of the debtors, they get 50% of their money back that they just paid for OnLive1.

Sounds like a great deal if you can get it.

Only if the "Assignment for the Benefit of Creditors" specifies the funds recovered from the liquidation is to be paid in the descending order of the credited amount (like in "pay the biggest creditors first, bad luck for smaller creditors if there are insufficient funds") and not proportional with the original credit/investment. Which would be very unusual.

Uh...

[p0p0]

"confirming that nearly have of the previous staff"
Uhh.... what. That's not nearly close enough to "half" and "halve" would just make my mind cry.

should be: nearly *half* of the previous staff

[Anonymous Coward]

I make plenty of typos in my own posts so I do understand, but I get annoyed with typos that obscure the meaning of the author's intent.

BTW that typo was carried over from TFA.

Ondead?

[aapold]

What if the dead onlive were to try a pac-man defense against the living onlive?

OnLive buys OnLive

[kiwimate]

Gee, and I haven't heard of either one of them :-(

Dick move to invalidate staff stock option awards

[Anonymous Coward]

This just really pisses me off.

Screwed Early Employees

[Anonymous Coward]

The ONLY reason to do this is to screw over the other early investors and employees who had options in the company.

Yet another reason why a minority stake (including options) in a private company is worthless. Dont work for options people, you should always assume that they are totally worthless, because they can be made worthless by things like this.

Re:Screwed Early Employees

[Anonymous Coward]

"Yet another reason why a minority stake (including options) in a private company is worthless."

No its not. Just don't get involved with dishonest people. Sure, sometimes you'll judge wrong, but really *plenty* of businesses are private and have satisfied minority partners.

Ok, let's see you died in the wool capitalists

[rsilvergun]

This looks to me like classic example of a fundamental problem with free market capitalism. All perfectly legal too. So come on: defend this. Seriously. Not trolling. I'm dying to know why it is that we should tolerate this sort of thing.

Stuff like this is why countries have laws against firing people, btw.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

"Dyed in the wool"

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Because, you communist pig, at least some jobs are better than none.

Re:Ok, let's see you died in the wool capitalists

[0123456]

This looks to me like classic example of a fundamental problem with free market capitalism.

What exactly is this supposed to have to do with 'free market capitalism'?

Hint: corporations are government creations.

Re:Ok, let's see you died in the wool capitalists

[russotto]

This looks to me like classic example of a fundamental problem with free market capitalism. All perfectly legal too. So come on: defend this. Seriously. Not trolling. I'm dying to know why it is that we should tolerate this sort of thing.

Would you care to spell out exactly what the problem is, or do you just want to rage incoherently?

Re:Ok, let's see you died in the wool capitalists

[Luckyo]

I do believe this is one of the biggest red herrings I've seen in slashdot comments this year. It really assumes anyone reading this is incredibly ignorant of reality to buy it.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Wait, so you'd rather see the company go bankrupt and everyone lose their jobs than have only half of them lose their jobs by using corporate bankruptcy laws to keep them in business?

Re:Ok, let's see you died in the wool capitalists

[Luckyo]

Uncontrolled free market causes power focus into the hands of few powerful at the expense of many powerless. In this case, the manoeuvre allowed a big investor to essentially throw all small investors out of the company with minimal additional investment. If he had to play it fair and prop the company financially in return for additional relative share in the company, smaller investors would have gotten to keep at least a portion of their investment.

It's a pretty good example of how uncontrolled free market capitalism works on basic level, and why big publicly traded companies tend to include rules that deny or resist such manipulation to gain trust (and money) from small and medium sized investors (i.e. limit free market capitalism with regulation).

Re:Ok, let's see you died in the wool capitalists

[rsilvergun]

Corporations are an abuse of the government by the wealthy. I think the phrase is along the lines of "Privatize the profits and Socialize the losses". Our last round of bail outs exemplifies this sentiment.

Re:Ok, let's see you died in the wool capitalists

[ScentCone]

Yes, that's exactly what he'd prefer. Because he doesn't want to see investors (who lost their entire investment in round one) come back and double-down as a sign of how much they think the business can still succeed. He doesn't want half of those people to lose their jobs, he wants all of those people to lose their jobs - because he wants them to become dependent on the state, instead.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

I don't know about 571051, but my problem is that OnLive gets to run up debt then legally die while transfering it's consciousness and desired parts into a new body that, while sharing the name, parts, and purpose, gets to drop obligations. When we reach the point of being able to do comparable things with human biology, will that be a right held by human people as well? I hope to hear about about how the new OnLive owns the debt (perhaps structured) along with the IP. I expect I won't hear anything with the reality being that they just get away with it.

Re:Ok, let's see you died in the wool capitalists

[russotto]

Uncontrolled free market causes power focus into the hands of few powerful at the expense of many powerless. In this case, the manoeuvre allowed a big investor to essentially throw all small investors out of the company with minimal additional investment.

The company was insolvent. The investors were losing everything no matter what happened. It's not like the company was making money and he managed to screw the small equity holders out of it.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

yea cause its such a good solid product that has done nothing but prove its worth, what really happened is half the people lost their jobs, the investors got squished out, debt was erased and someone bought the assets for dirt cheap based on a loophole, out of everyone involved only one made out good.

Then in another 2-3 years the whole thing will go belly up again cause its a shit idea that only exists to loop its histroy

Re:Ok, let's see you died in the wool capitalists

[c0lo]

This looks to me like classic example of a fundamental problem with free market capitalism. All perfectly legal too. So come on: defend this. Seriously. Not trolling. I'm dying to know why it is that we should tolerate this sort of thing.

Because the investors decided to throw more money into the game (the original investment is lost in the bankruptcy).
It's like somebody says: "Well, I liked the original software concept. They failed in the implementation throwing in a lot of feature creep... it's gone/lost/bankrupt/whatever, I lost something myself. Let's fork, clean the garbage and give a new try"

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

You're forgetting the small investors and the debtors. They, along with the employees, are screwed. If the other investors had so few shares that this was accepted, though, it means they were playing with big fishes so it's not surprising they got eaten.

Re:Ok, let's see you died in the wool capitalists

[mstrcat]

I'm not sure if I can defend it, but it actually happens quite frequently to start-ups that burn through investment monies before they become profitable. Essentially a group of people invest money...we'll say A-D in this case.. At some time after investment, company X is still not profitable and have spent all the invested capital and none of the investors want to put new money in. If no one is interested in the business, it just dies. All the workers get fired, any debts get settled in court, and all the investors loose 100% of their investment. In many cases however, one or more of the investors will say, "I'll buy the company for Y dollars, assume the debts, hire some of the staff, ect.". Sometimes Y is very low, so all the remaining investors get nearly completely wiped out, all the stock is worthless. I think of it like a poker game where everyone else folded. Surprisingly the staff at the new company isn't typically all that upset about loosing their stock options. They've known for a while their company wasn't making any money and the options were worthless anyway.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Sure we will! Only when you backup your mind, commit suicide to reduce your debts, then be reloaded into your fresh clone body.... they'll put you in jail for 2+ years for the criminal offence of committing suicide :)

Maybe by then it'll be the death penalty though :)

Re:Ok, let's see you died in the wool capitalists

[Surt]

Could you maybe attack it first? I don't see what's wrong. A company that was out of money restructured, letting go half the staff. That's what happens when the money runs out. One of the original investors decided to double-down, but only put in additional funds for a reduced operation.

What did you want to have happen?

Re:Ok, let's see you died in the wool capitalists

[kamapuaa]

Empirical results? The best economies are capitalist. The more capitalist an economy becomes, the stronger it becomes.

Maybe in the future a better form of economy will come about, it's difficult to imagine.

In this specific case, a company that was doing poorly and about to go out of business, was able to quickly & easily re-structure itself and stay in business.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

"Stuff like this is why countries have laws against firing people, btw."

The company was bankrupt, there is no way to get out of this without fireing people. If this is abuse, the issue is that rather then put in new investments to the old company and pay out their debts, they abuse the bankruptcy system and form the exact same company in order to avoid paying debts. It should be possible for anyone they ow to sue the new OnLive to collect their debt with the very reasonable argument that it's the same company and therefore should get the debt along side the assets.

Re:Ok, let's see you died in the wool capitalists

[Luckyo]

You're missing the point. Investor wanted to prop the company regardless. But with this, he was allowed to prop the company while terminating ownership of all other owners.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

It can't be defended, this is what you call a blemish on an otherwise well functioning system. The premise of your comment, that capitalism is flawed, misses a rather important footnote - it's the best "flawed" system out there. Oh wait, I'm sure the Euro-zone quazi-socialist system is far superior to capitalism. Ask Spain how that 25% unemployment rate is working out for them...

Re:Ok, let's see you died in the wool capitalists

[bluefoxlucid]

Empirical results? The best economies are capitalist. The more capitalist an economy becomes, the stronger it becomes.

The more capitalist an economy becomes, the weaker it becomes. Unless it's already socialist as hell, then it becomes stronger.

It would be more capitalist to gut all our government regulations, consumer protection laws, anti-trust laws, etc .. let the free market figure it out. Purified capitalism carries no such thing as business for the common good. There is actually a government regulated business class by which you register your business to provide a public benefit, such as Good Will collecting items that would typically be destroyed and thus reduce the wealth present in the economy and selling them at very low prices such that low-income individuals can buy i.e. clothes--this business operation is a money-making cash cow, yet it is extremely beneficial to the public.

In a purified capitalist system, the entire market control is capital. Money. Profit. Lying, cheating, conning people, as long as you don't break the framework laws--which start getting close to anarchy, as business operations can only be covered as far as anything else, you shouldn't even need a permit to operate a business (no incorporation). Fraud is a difficult concept in capitalism: in theory, market forces would drive people toward a product that works as advertised, so why do we need to protect consumers against fraud....

The end result is corporatism, where megacorporations buy up everything and become effective government. CACI supplies the US Military with privately trained troops in Iraq--yes, there are private contracted soldiers, which means there are corporations in America with their own military forces. Imagine the buying frenzy to control all private sector military, police, private security contract, etc. All the guards, cops, and soldiers are controlled by Walt Disney Co.

Sometimes, the government just has to set down the rules and make sure these people play fair. They need--or at least it's beneficial--to nudge the market a little--not cripplingly so, but a little. In my state, the government charges businesses $400 for 1MWh of produced/consumed power. A business has a $400 obligation; however by generating 1MWh of solar power, they can escape this obligation. I have a solar water heater that generates above 5MWh of energy per year (couple it to a radiative heating system boiler via a plate heat exchanger). For each MWh up to 5MWh, I get 1 Solar Renewable Energy Credit.

I can sell that credit; currently there's enough in the market to push prices down to $195 per SREC, so businesses will pay me about $1000/year for owning and operating my solar water heater. This arrangement is the government's way of using market forces to push solar energy--every MWh my water heater generates is that much less gas burned, just like using 1MWh of solar power rather than electricity from the gas turbine plant. This situation leaves it up to producers and consumers to decide what's best for them and how to pay for it--it encourages the production of more solar power plants (although if you consume 1MWh Solar Energy it's solar and you don't need to pay $400), it encourages businesses to lower their energy usage, it encourages businesses to install any offsetting technology (PV, solar hot water, etc--a lot of businesses install PV to lower their obligation AND SELL THE SREC THEY GENERATE FROM IT), it even encourages consumers to install solar power options like PV arrays or solar water heaters. The market decides exactly what to do with that, how to fluctuate prices, and which direction to take; the burden is small and can be ignored, but will fill with the way the market decides is best without the government getting its hands dirty and trying to micromanage this shit.

This situation also gives an edge to companies like Capstone Turbine, who sell roof-mounted gas turbines for winter heating. Capstone Turbine gas

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

This is actually desirable.

If the folks running onLive had to have a bullet proof business plan they would never have been able to go into business and we would never know that the service was even possible at this point. Sure it sucks for the investors, but they should have known how risky a business with such a novel service would be as an investment.

Even if they did go into liquidation others would at least be able to learn from the mistakes and try again.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

If you lend your money to a business, and it can't keep it's side of the deal and repay it when due, then what should happen?

If you don't want to just extend the debt for some more time, there are two honest options - ask the owner to sell everything a business has, from patents to chairs, and get money to pay at least something back; or ask the owner to give you these assets in lieu of payment, expecting that the 'running company' would be worth more than whatever can be sold.

The first one is liquidation, the second one is the Onlive case.

In any case the owners (holders of shares or share options) rightfully don't deserve anything - they have took X dollars and turned them into less than X dollars, so their shares in the venture, their 'sweat equity' has a negative value. The actual business idea needs even more money to bring any profits - so if there are no investors, then the business is completely worthless, but if someone is ready to invest and wait - then it's worth something to them.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Onlive isn't privatizing the profits/socializing the losses, you #Occupy buffoon. Everyone (workers, investors, creditors) who invested in the original OnLive lost. Someone decided to buy the remaining assets once the company went into receivership, free of the encumbrances of their original contracts. Contracts that had tied them up with 8000 co-hosted servers with 3-5 year hosting terms, and bleeding them dry when they were still trying to break 2000 concurrent users. Not to mention a whole host of staff who probably shouldn't have been hired previously if the company wasn't on the right trajectory originally (which is also why they ran out of cash).

This is a lot like when Circuit City went out of business, and someone bought their name and built an ecommerce firm around it. Except here they're buying the name, infrastructure, and expertise.

You can go back to your drum circle now, hippie.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

It's not big investors vs small investors, its debt vs equity.

The rules are simple - debt is paid first; may be secured with specific assets & gets a fixed return; equity has value of whatever assets remain after debt is paid, but has an unlimited upside *if* the venture is successul.

If you want to be an owner (i.e., have stock or options), then you get the risk of owning something worthless such as Onlive. If you want to lend money - you too can loose much or everything, but the lender fairly deserves more protection than the owners - since owners 1) controlled what company was doing, and if they failed, then it's their fault; 2) get the rewards of risks if they gamble and succeed.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

He had shopped the firm around for another round of investment for 6 months, up to and including putting millions of his own in as bridge loans.

No one except this one investor was willing to go forward, and the main reason was they'd tied themselves up in so many contractual knots the business couldn't be a going concern. It was dead. The announcement would have been a standard "we're out of cash, everyone pack up" discussion. The only reason you're torqued is one of the original investors bought off on Ron's idea but needed to find a way to free the firm of its poorly negotiated contracts.

Re:Ok, let's see you died in the wool capitalists

[noh8rz7]

Ok, here we go. It's clear that Steve Perlman has a dream/vision that server-hosted games/desktop/whatever is a revolutionary idea, and he's just on the cusp of making it a reality. He thought he could make it work before (onlive has been in business for two years or so?) but obviously it didn't work and his company was on the brink of shutting down. But he obviously still believes in his dream and doesn't want to give up. So he does this convoluted thing that throws away lots of past investment and is bad for his staff, but it is a way to keep the dream alive. Steve Perlman. I'll be successful no matter what he does. If not onlive, then he would be successful elsewhere. The fact that he so intensely believes in the potential of his streaming service is awesome. C'mon, what's the big difference? Go bankrupt and everybody is laid off and loses equity, or play this shell game where every body is laid off and loses equity, but the service still continues? Disclosure: i'mm an avid onlive user.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Even if they did go into liquidation others would at least be able to learn from the mistakes

Highlighted the key word for you. What pisses everyone off isn't that "others" came in and rescued the company, it's that the principals of the company essentially orchestrated a no-bid buyout of itself in order to erase their own mistakes.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

If you lend your money to a business, and it can't keep it's side of the deal and repay it when due, then what should happen?

Go bankrupt, sell itself (and/or its assets) at auction to the highest bidder.

The onlive case is the left hand slipping the right hand $5, then the right hand telling me all they've got is $5 and that was the best they can do and that should cover my million dollar loan.

Re:Ok, let's see you died in the wool capitalists

[Qzukk]

free of the encumbrances of their original contracts

So when I decide my mortgage is too much of an "encumberance" I should just buy the house from myself at pennies on the dollar, give the bank pennies, then go on my merry way?

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Sure. Except, that you'd be buying it from the bank at pennies on the dollar. Good luck convincing them to do that. The reason that they need convincing is that the house and the land that they've allowed you to rent-to-own still has value. In the case of a busted tech startup, the value left over was only deemed worthy of pennies on the dollar.

Re:Ok, let's see you died in the wool capitalists

[noh8rz7]

Also, laws against firing people? Who has those? I the us, absent a specific contract, all work is at-will - employee can leave at any time, and they can be dismissed at any time. If you're fired because you suck, that's a bigger deal because you don't qualify for unemployment benefits. There R laws in place to regulate this kind of firing, and employees can follow up with wrongful termination suits.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

Sell it to your wife at 20% of the cost, and then declare bankruptcy and can no longer service the original loan.

You give every cent to your name and every asset you own to the bank (the clothes on your back - and the 20% your wife paid you) to your creditors. Whatever is left goes to your employees (kids), and then you are debt free!, you then get "rehired" by your wife (lets you move back in after kicking you out for 10 seconds), and offer the kids the opportunity to rehire them, but this time for stock options and no pocket money (because you can't afford that its why you went bankrupt in the first place!).

Don't you see, this is perfectly reasonable! And its better these kids have *some* kind of housing instead of none!
(the excuse that this is a perfectly reasonable business practice, because it ends up with some jobs instead of none).
The problem, is the bank gets screwed out of 80% of their money, whilst the guy doing the screwing retains all of that value (effectively for free).

What should happen, that is best for jobs and *everything*. Is your company goes into bankruptcy. A real auction happens, where you get true market value for *everything*. And then the guy who actually paid for the shit gets to decide who stays and who goes and what to do with the value, and it is HIM that employs people. And the creditors of the old business get to have that money back to also create jobs.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

You capitalistic moron; it is better that the guys willing to invest money in startups get their rightful value out again, so they can invest in another startup and create jobs.

This system makes it harder to get investment money because this story and others makes it sound like you just get screwed.

Short term: 50% of the jobs still exist!
Long term: We can't get investors anymore for some reason! 0 jobs.

You hyper-capitalist wankers NEVER look at the long game. It's all just first order effects and now now now me me me.

Re:Ok, let's see you died in the wool capitalists

[Anonymous Coward]

What he wants, is the true value of the assets to be attained at auction.

Those assets to go back to the investors, so they investors can reinvest that money in more, new, and more profitable investments (PSST; that means more jobs!).

Yes, the guys working at the current place lose their job. its because it DOESN'T MAKE MONEY. Why let people drop their debts and keep running a company THAT MAKES NO MONEY. Let the investors get whatever they can out (from a valid auction!) and go and invest money elsewhere!

And if you reckon an Auction wouldn't get the same money out, why wouldn't the guy who just doubled down or whatever pay that same money in an auction? At least it gives others a chance to bid for the technology resulting in more money to run more businesses.

Fuck you free market loonies are retarded. This is not a free market outcome (where was the market transfer of these assets?), it's a fucking backroom deal designed to screw investors out of the profits from their investment! Why would they invest money in other businesses if they are just going to be screwed out by the next guy? Why would this be a good thing for the economy?

Re:Ok, let's see you died in the wool capitalists

[farble1670]

Surprisingly the staff at the new company isn't typically all that upset about loosing their stock options.

treating options as anything other than an unscratched lottery ticket is a mistake.

Spin

[Tubal-Cain]

...confirming that nearly half of the previous staff had been offered positions at the new company.

I guess that sounds better than "we fired more than half of our employees".

Re:Spin

[kat_skan]

...confirming that nearly half of the previous staff had been offered positions at the new company.

I guess that sounds better than "we fired more than half of our employees".

Which in turn sounds better than "we fucked over all of our employees."

Re:Spin

[Earache65]

If the CEO and all upper management were part of the fired half it would be easier news to hear.

OnLive is dead.

[drfreak]

Long Live OnLive!

Re:OnLive is dead.

[Anonymous Coward]

OnLive 2: The Search for More Money.

Re:OnLive is dead.

[Anonymous Coward]

In-game advertisements. Advertisements on top of advertisements. Tailored to all your inputs since they already read all controller input anyway.

Re:OnLive is dead.

[Anonymous Coward]

"You've pushed the left stick up! Enjoy Pixar's Up, available in stores now on Blu-Ray and DVD!"

Shrug Off Your Debts

[sanman2]

It's worth mentioning that Perlman's original company was called "Rearden Steel" (a la "Atlas Shrugged"), which was then re-named to Rearden Labs
(I know, because I applied to it for a job, once)

http://www.flesheatingzipper.com/gaming/2012/08/can-you-trust-onlive-now/

Re:Shrug Off Your Debts

[Anonymous Coward]

Stevie gets bonus points for not having to pay increased rates for unemployment insurance (read, debilitating anti-capitalist welfare for society's boat anchors who can't be bothered maintaining steady employment.)

Re:Shrug Off Your Debts

[fsterman]

OpenSecrets shows he donated the max amount to Maria Cantwell and Nancy Pelosi in 2011.

Re:Shrug Off Your Debts

[guttentag]

It's worth mentioning that Perlman's original company was called "Rearden Steel" (a la "Atlas Shrugged"), which was then re-named to Rearden Labs ...

Great, a sanctimonious Ayn Rand fanatic who probably thinks this sort of transaction is OK because his company is holding up society by being, as the press release claims, "the future of computing and entertainment." Really? The future of computing? Someone should tell this guy he misspelled "Steal."

only 'coz we're pussies

[sanman2]

Fine, so man up and go to one of those companies like Upstart, who'll bankroll you into your own DotCom

This is why we need more workers rights / unions

[Joe_Dragon]

This is why we need more workers rights / unions.

Just wait for walmart of others to pull the same crap.

But I like raging...

[rsilvergun]

when I see stories like this. Sorry, sorta hard not to do.

There's lots and lots of problems here, but the fundamental one is that the workers are at a marked disadvantage over the Capitalists. Those employees can't really do anything about any of this. OnLive wins, they lose. Even if they get a lawyer and go all class action they'll probably get nothing except a $5 off coupon for a 12 month subscription of OnLive.

I was just reading Wikipedia's articles on Voluntary Slavery and Wage Slavery. The point made by the Capitalists was you should have the right to sell yourself, the point made by the Socialists was that if you're in that position you're bargaining from such a weak stance that you don't really have any right's to begin with.

I guess my point is this: "Free Market" Capitalists argue that freedom will win out in the end. As near as I can tell this is either a hopelessly naive sentiment, willful ignorance, or a carefully calculated lie. I'm still waiting to be proved wrong. After all, it'd be nice to believe in the basic good of people and civilization. But I'm a cynical ole coot.

Re:But I like raging...

[c0lo]

There's lots and lots of problems here, but the fundamental one is that the workers are at a marked disadvantage over the Capitalists. Those employees can't really do anything about any of this. OnLive wins, they lose.

The original investors have also lost in the process.

I was just reading Wikipedia's articles on Voluntary Slavery and Wage Slavery.

It is usually called a mortgage. If your parents were not wealthy enough to give you a home (or tuition fees), you'll need to take a job. You'll need the same if you can't live without that shiny gadget (i...whatever-apple-is-pushing-now) or want to drive an SUV or ...

I guess my point is this: "Free Market" Capitalists argue that freedom will win out in the end.

Well, I think they may be actually right. Except that nobody is able to tell the cost of this victory.

Re:But I like raging...

[gl4ss]

they screwed over 3rd party investors too. BIG TIME. like htc which put 40 million dollars into them this year.

so far it seems it was done for managements and steve's benefit, so that they get to keep the assets but get to clear debts and other investors off from the table. it's ridiculous, how can the service go on without interruption - they got to transfer all beneficial and essential contracts while shedding everything they don't want ??

it would be interesting to see the numbers they used to get the investment... the ceo publicly claimed before numerous times that the service is profitable too, which most certainly seems like a lie now.

Re:But I like raging...

[Anonymous Coward]

Well, I think they may be actually right. Except that nobody is able to tell the cost of this victory.

History does not agree. History is full of tyrants and kings, of one group of people oppressing another group.

The whole reason we care about the "economy" is because there is finite resources, but infinite demand (even free market capitalism agrees with infinite demand - without it, they can't claim that there's always more opportunities for profit, for new businesses, for more capital investment). History has shown that people are not above trampling over freedoms in order to gain a bigger piece of the proverbial pie for themselves.

Given the conditions (finite resources, infinite demand), NO system, not even free market capitalism, will be able to catch up. No matter how much you grow the proverbial pie, some people will still want a bigger piece, and they will not always do it without stepping on other people's toes. Eventually, they will infringe on other people's freedoms to get it.

Freedom, in fact, is just another finite resource. We can only try our best to distribute and grow it, but there's never enough for everybody.

WTF is OnLive?

[Gothmolly]

Is it bad if I don't know what OnLive is? Is it worse that nothing other than "streaming game service" is the only piece of information in the submission?

Re:WTF is OnLive?

[Osgeld]

streaming game service is what it is, they run the boxes and buy games, then you rent time for a live stream to that box running the game.

Ill give you 3 guesses on how popular it was, and how good of an experience trying to play a video game via VNC is

Re:WTF is OnLive?

[SeaFox]

They run virtualized machines that do the actual processing of the games, then stream the video and audio output to your computer over the Internet. You play the game from what is literally a remote desktop session for a monthly fee and get access to a much larger library of games than if you bought all the titles and can play them on a much lower spec machine on your side since you don't have to actually run the game on your local PC.

Re:WTF is OnLive?

[Sir_Sri]

No, that's about it. They have been running a cloud gaming service where they run the game code on their servers, and stream the data to your computer in real time. They have a 'console' that's basically a cheap video player with a controller to connect to the service if you don't want to use a PC desktop client.

That's their entire business model. And it's not all that successful. There were only really two big outfits in this business gaikai and onlive, and both exist in an effort to get bought out by a big company, or at least did, until gaikai got bought by sony. There are some smaller other asian outfits as well, but that's about it. Pay a subscription fee, play games anywhere through an onlive client (with their box), without needing to buy gaming hardware.

I would think the big market for this will shortly be legacy games, I bet 10 000 PS2's would serve the entire PSN, and be 'good enough' for legacy gaming, same sort of thing with the original xbox, and if there is a major architecture change for the PS4/Xbox3 they could need literally millions of boxes as an online service. The other avenue of course is people on laptops who can't get decent parts for whatever reason.

In the really long term obviously most game services are going this direction, but I think they're too far ahead of the curve to make enough money to cling to life for another decade or so.

Re:WTF is OnLive?

[Onymous Coward]

It's okay if you don't know.

Just don't go on about how the service is great or awful if you haven't tried it.

That bugs me to no end.

If it's available in your area, just try it out first, for free. Then rant either way.

Re:WTF is OnLive?

[atlasdropperofworlds]

If course all of these game run extremely well on just a $800 PC these days, which is just $300 more than, say your base $300 desktop. In addition, the game come in at 720p at best, and the encoding quality is crap and always will be because the encoding windows is a fraction of a second long. The result? A home gaming PC is better value.

Also, those who play games are often computer enthusiasts already, and like to build and upgrade their own systems as a hobby. It's no surprise that OnLive didn't get widespread adoption. Most people on iPads are happy with tower defense, puzzel games, and angry birds. Wrong market.

Re:WTF is OnLive?

[atlasdropperofworlds]

> In the really long term obviously most game services are going this direction, but I think they're too far ahead of the curve to make enough money to cling to life for another decade or so.

Steam? I have a 250 Mbit connection at home. I can pull down an entire steam game in about 5 min. When it's installed, I play it at 60 fps at 2560x1600.

Streaming a video of the game is never, ever going to be as good as rendering locally. Processing power is affordable and scales because it's easily distributed. Concentrating the processing power is more efficient for power but extremely expensive to scale because someone has to go buy a large number of gaming class machines, put them in a data center, attach additional encoding hardware, and then have a network with enough bandwidth to stream nearly raw video at resolutions up to 2560x1600 (and one day soon 4k). This is just not going to happen for a very very long time - likely much longer than a decade. Also, encoding a video of a game running is never going to be as good quality an experience as running it locally. Encoders need to look at several frames to do a good job. 3-6 frames isn't enough, and never will be. 300-600 frames works ok. More is better. Also, the enthusiast market for PCs will need to disappear, but it is, in fact, growing. It also happens to be the biggest, richest chunk of the gaming market - these guys make the whole gaming market larger than the music and movie market combined.

Re:WTF is OnLive?

[SeaFox]

If course all of these game run extremely well on just a $800 PC these days, which is just $300 more than, say your base $300 desktop.

$300 + $300 = $800. Okaaaay.
Also, to spin your statement another way, "a decent gaming station costs twice what a base PC does".

In addition, the game come in at 720p at best, and the encoding quality is crap and always will be because the encoding windows is a fraction of a second long. The result? A home gaming PC is better value.

Also, those who play games are often computer enthusiasts already, and like to build and upgrade their own systems as a hobby. It's no surprise that OnLive didn't get widespread adoption. Most people on iPads are happy with tower defense, puzzel games, and angry birds. Wrong market.

I never said it was a good deal for a service. Perhaps part of the idea here is that since it's a streaming service you don't have to be on your own PC at home. You can take it anywhere there's a PC with a decent Internet connection.

Re:WTF is OnLive?

[farble1670]

Steam? I have a 250 Mbit connection at home. I can pull down an entire steam game in about 5 min. When it's installed, I play it at 60 fps at 2560x1600.

and? you have an internet connection that's 20-40x faster than the average which makes your conclusions meaningless. bravo.

Re:WTF is OnLive?

[Sir_Sri]

I have a 250 Mbit connection at home. I can pull down an entire steam game in about 5 min. When it's installed, I play it at 60 fps at 2560x1600.

And? I have a 50 Mb/s connection and can play 60fps at 2560x1600, but my computer cost probably 2000 bucks for the gaming related parts (18 TB of storage isn't really a gaming problem but it's hard to factor that in/out, and my now 1TB of SSD space is about 10% game playing and 90% game making), and my internet is 100 bucks a month. If you only want to spent 15 bucks a month then onlive is much much much much much cheaper than either of our setups. Our setups aren't really a good comparison to normal people.

That, and my 50Mb/s connection puts me in the top 1% of households in canada, which was my entire point of the line that this isn't a great business plan right now.

You have to keep in mind the utilization on the distributed network. Sony could probably get away with having 15 million PS3's in a data centre and be able to serve all of the gaming traffic on the PSN, ever, even though there are something like 50 million PS3's in the wild.

The question of just how much bandwidth you need, and how much latency is tolerable is a tricky question. A very good FPS on the PS3 has a 100ms or so controller response time, a bad one 133ms. We spend a lot of time teaching parallel algorithms and game design to deal with these problems, because they are tricky to solve. But right now, to a physical server in Ireland (I'm in ontario canada) I have a latency of just over 150ms, now that's not an onlive server and it's a single data point, but you get the idea that this is not a completely impossible problem to solve, even with todays technology - that technology just isn't widely proliferated in the wild. You can compress the video stream, you can actually do some sophisticated fuzzing outside of the main field of view if you want to track eye movement (which isn't all that expensive), you can do frame differentially stuff to reduce bandwidth (A LOT), etc.

Even your steam example, have you used any unmodified games on gog.com? (I sadly don't have a list) but way back in like 2000 microsoft change how direct2D worked, and colours don't work properly on some applications, I know arcanum on gog.com has this problem but I'm not sure about others. Stuff like that, or an incompatibility with new versions of windows or the like and you can see steam looking to do something similar with the steam cloud. As I said, initially for legacy games especially this is a big market, you can't execute a PS2 game properly on most new PS3's, they're low resolution, lots of the games are latency tolerant etc.

Re:WTF is OnLive?

[atlasdropperofworlds]

> $300 + $300 = $800. Okaaaay.

Typo, obviously.

> Also, to spin your statement another way, "a decent gaming station costs twice what a base PC does".

No, it costs a few hundred more. The difference in the quality of GPU and possibly the power supply, that's it.

> I never said it was a good deal for a service. Perhaps part of the idea here is that since it's a streaming service you don't have to be on your own PC at home. You can take it anywhere there's a PC with a decent Internet connection.

Definitely an appeal, but not enough to overcome the crappiness of the service. Also, it seems gamer just don't care.

Re:WTF is OnLive?

[atlasdropperofworlds]

only 10x the base here in Canada. 50 Mbit is 2x the base. The average is 8Mbps according to youtube and speedtest.net.

But, end of the day, Onlive is failing. This isn't a surpise. Immediacy is not a priority for a gamer. Graphics are. Using his hand-built, powerful CPU/GPU system to the limit of it's capabilities is. We don't give a crap about being able to play Crysis on our iPad, or netbook. We don't mind downloads. We also have a lot of money (at least to spend on PC-related and gaming related stuff).

Re:WTF is OnLive?

[atlasdropperofworlds]

2560x1600 is GPU limited. Dual GTX 460s, for less than $300, will handle this at 60fps. A $2k PC is likely overkill in more than area. Granted, my PC is in that area, but it only has 3 TB of storage, and no SSDs (but a ton of RAM). PCs also have a lot of utility outside of gaming (video, photo, music storage, document editing, basic browsing and email on a large screen, etc.).

However, gamers are mainly PC enthusiasts. We are people who build the best PC for the money, or just build the best PC. We upgrade our GPUs as often as possible. We like to run benchmarks and see our scores. We even like to do things like add new coolers, buy cases with windows, add lights, fans, front panels, etc. There are 56 million of us and growing.

Also, it's many decades before video encoding can give us good latency and good quality. If you know anything about video encoding, you'll know that getting good quality requires either (a) high bitrates or (b) a large number of frames to encode with, with the tradeoff being (a) for (b). Also, real-time encoding takes a non trivial amount of processing power. These are reasons why OnLive will fail. Maybe, one day, when bitrates are high enough, or we get some incredible breakthrough in video encoding, we're not going to see a good OnLive style service. Besides, buying PCs and fancy encoding equipment (and keeping it up-to-date) and running a datacenter is very expensive - probably more than $15 per month. It seems they were selling at a loss and making it up on volume...

Re:WTF is OnLive?

[Sir_Sri]

Also, real-time encoding takes a non trivial amount of processing power.

Uh... what decade are you living in?

You have to be careful here, you're assuming you want to render a frame one way, compress it, then decompress it. That's certainly a viable solution, and you can do that real time with a half decent gpu easily enough, but you don't need to render the frame then compress it, you can render straight to a compressed format and output that.

and running a datacenter is very expensive - probably more than $15 per month

Well that would be why they aren't making enough money. Although for the sake of argument the difference between 15 bucks a month and 30 isn't significant to us, but would double their per user revenue.

If you haven't actually tried onlive or the like you should, most of them work reasonably well if you have a low latency connection, this isn't some 'oh they aren't going to be viable', no they're viable already if you're in the range of people who have decent connections to their servers, but that group has the hardware they need already.

Re:WTF is OnLive?

[atlasdropperofworlds]

> Uh... what decade are you living in?

I live and work on video encoding in the current decade. Quality is achieved by doing exhaustive macroblock searches, object detections, SSIM-like quality metric comparisons of the output (which requires you to decode what you just encoded). It's non-trivial. In fact, we still don't have anywhere near the compute power to get the most out of something like H.264 in real time. Offline encodes can spend a week on a 1 hour video, and do quite a reasonable job.

All that is moot, however, if you only have a few frames to work with, like in gaming situations.

> If you haven't actually tried onlive or the like you should

I certainly have tried it, more than once. The encode quality was crap. The latency was always noticeable, even though I had 30ms or so to their server. The maximum resolution I could use was 720p, and the latency was unbearable, as you'd expect due to the encoding process. The overall experience was crap compared to my gaming rig as well as my laptop. OnLive was a failure waiting to happen.

Phonenix Company

[Freaky Spook]

This sounds like the definition of the Phoenix Company http://en.wikipedia.org/wiki/Phoenix_company

I have gone through something similar with a previous employer. It didn't end well at all.

Re:Phonenix Company

[Anonymous Coward]

That happens in the Netherlands with kitchen stores. People have to pre-pay their kitchen, and when the store has enough people who payed for their kitchen upfront they file for bankrupsy, then restart with almost the same name in the same building with the same inventory. And they do this year after year after year.

Fools and their jobs...

[Anonymous Coward]

They *offered* 50% of their former employees their jobs back. I'd like to know how many actually take them up on this.

Personally, I think you'd have to be a complete fool to work for these jokers again.

Re:Fools and their jobs...

[Anonymous Coward]

Nevermind how many of them would be benedict arnolding their former compatriots.

Doesn't seem like something that'd be good to do for when they're looking for that replacement job in a few months/years, and their established buddies mention to the hiring manager that they stayed at an insolvent company twice :)

good money after bad

[bloodhawk]

sounds like one of the original investors in throwing good money after bad. Face it the concept is not a good one with to many downsides and too small a niche market to ever be able to do much more than break even if it's lucky.

Re:This is why we need more workers rights / union

[Sarten-X]

Right! That way the company becomes a toxic burden of debt for investors, and after the first attempt goes bankrupt, everyone can lose their jobs because nobody wants to pick up the pieces.

Don't use their service

[Anonymous Coward]

If you want to stop this kind of thing, then do not use their service and spread the word. No users means no company with evil owners such as these jokers.

That's not what's happening here

[rsilvergun]

I've watched videogame companies bailed out by the owners. The president of Sega did it. He put up his fortune to keep the company afloat and lost most of it. That's not what's happening here. What's happening here is that a bunch of people were promised valuable stock options in exchange for a lower salary than they would normally command. They were then systematically cheated out of that using blatant and dishonest legal tactics. They've been defrauded in practice, just not legally. AOL did this too, and we all railed against them.

RANT MODE ON

And @$#! am I fed up with conservatards using the threat of job loses to keep us at each others throats. Better let the Job Creators do what they want or they'll take EVERYTHING away. It's there's after all. Mitt $#F#!@ Romney built it all with his own two hands. Him and John Galt. Jesus, what the hell is wrong with us? When did we become such a bunch of fsckin' cowards that we let these yahoo's push us around?

RANT MODE OFF

Re:That's not what's happening here

[Ambassador Kosh]

All systems are eventually replaced with a better system. Capitalism won't last forever. I don't know what the new system will be or when it will get here but geeze I hope it comes soon. I am hoping for something like the venus project but who knows what it will be. It is not like we have had capitalism for very long or that any of these systems last for very long. Our technology ends up at odds with our economic system and destabilizes it and we create a new economic system capable of working under the new technological reality.

Whatever the new system is I hope it does better by a greater number than our current system. I don't think any of the prior systems are viable paths forward so no I don't believe the next system will be communism etc.

Re:That's not what's happening here

[DNS-and-BIND]

The problem is that whatever system replaces capitalism will be much, much worse. Instead of "let's fix the system," we get libtards (your term reversed, how does that feel?) saying "let's burn down the system and implement socialism." Sorry, but you need a proven, workable system before touching the one system that's actually known to function.

And what's with the "Jesus" statement? Are you one of those Christ-tards? Isn't it fun to call people we disagree with "tards"? How do the differently-abled feel about that?

Re:That's not what's happening here

[Anonymous Coward]

Your proposed term for insulting liberals falls too close to "libertard", intended for insulting the libertarian branch of conservatives. I suggest liberaltard.

Re:That's not what's happening here

[Anonymous Coward]

you don't need a proven workable system before touching anything. He's just angry at folks saying, "let us screw over some people otherwise we'll screw over everybody." to be honest, that is a pretty crappy choice to be given. hence the "tard." if people stop trying to only enrich their own lives and instead enrich the lives of everybody, then yeah, we might be better off. but until one side stops saying, "let us take more money" and the other side stops saying, "let us give everybody money" no one will get anywhere.

Re:That's not what's happening here

[Xest]

Socialism and capitalism aren't mutually exclusive. As for whether socialism works, well, I'd say Germany is a good example that it does, but the EU in general is mostly socialist and economically larger than the US whilst having lower average levels of crime, better measures of personal happiness, higher levels of adult numeracy and literacy, longer life expectancy, lower infant mortality rates, greater political respect globally, and so forth.

Unless of course you're doing as many right-wing Americans do and confusing socialism with communism as is often the case with the American right in which case you're correct, communism has never really been shown to work.

I don't think anyone whether from America or not complaining about US style-capitalism is suggesting a massive lurch from the fairly far right to the complete opposite on the far left that is communism, they're probably just saying that America has taken capitalism a little too far to the point that it's detrimental not just to the country, but to it's citizens as well, and that a healthy injection of socialism as countries like those in Europe have would probably improve things.

Certainly the answer for America is absolutely not to lurch even more to the right, because at that point it's really entering the realm of fascism. I know the left-right scale is fairly imperfect, but it does illustrate the relative position of these ideologies quite well. Effectively from left to right you have Communism, then Socialism, then Capitalism, then Fascism. A healthy balance of the middle two is best, too far into either one is unhealthy and moving into communism or fascism is just catastrophic. This isn't to say European nations always get it right, far from it - Greece went too far with it's socialism for example relative to the amount of money it had available as a nation, much as America has gone too far with it's capitalism to the detriment of many of it's citizens being left unable too meaningfully contribute to and participate enjoyably in society.

The thing is, when put objectively, the vast majority of Americans even seem to agree that capitalism has pushed inequality in the US much too far, and would actually prefer a more socialist society:

http://www.bbc.co.uk/news/business-19284017

But of course, what people say in an objective study, and what they vote for in a more emotion filled ballot box, are two different things.

Re:That's not what's happening here

[Anonymous Coward]

The point of promising stock options is that you are a part owner and are motivated to make the company succeed. The company didn't succeed, it went down in flames - so you got what was promised, you're a rightful part-owner of the company you built - too bad you built a worthless (literally - $0 worth) company.
.

Re:That's not what's happening here

[Anonymous Coward]

Um, he did prop up the business. For the previous quarter they'd been running on bridge loans from his own pocket while Ron was trying to drum up another round.

Re:That's not what's happening here

[Anonymous Coward]

As for whether socialism works, well, I'd say Germany is a good example that it does...

It worked for a bit, except for all the mass graves from nationalized socialism...

Re:That's not what's happening here

[Xest]

Right, and the problem there was nationalism rather than socialism, and the Nazis weren't particularly socialist anyway. The US has far more nationalism nowadays and that's a major part the problem.

Just as the Democratic People's Republic of Korea (DPRK) also known more commonly as North Korea isn't actually democratic. By your logic we could point out how democracy is flawed because North Korea has it in it's full name and is guilty of many atrocities, but obviously that makes no sense. What a country has in it's name, and what it actually practices are two completely distinct things.

Re:That's not what's happening here

[ScentCone]

In cases like that ... capitalism works despite socialism's drag on production and growth, and socialism only works because capitalism is there to be its beast of burden. Luckily for the socialists they haven't completely squashed the capitalists' drive to produce things.

Re:That's not what's happening here

[Xest]

Yet despite socialism's "drag" the socialist economies in Europe have a better economic output than the US combined, and Norway which is very socialist even has a higher GDP per capita, and this is despite the US having a massive advantage in these areas due to it being in the fortunate position of being able to dictate most world trade rules in place today.

So how does that figure into your equation? Why are people in socialist countries also more productive?

You obviously haven't really thought through your point, but let me explain why this is generally the case. The reasons are varied but fairly simple, that without a sensible social security blanket, such as socialised healthcare, you end up with people being taken out of the productive portion of the economy, people get sick and can't become productive again because of lack of suitable healthcare to do so. You also have greater access to education when it receives more state funding, and you have people with benefits able to get back on their feet more easily rather than completely falling into ruin and ending up a burden on the state, often resorting to crime etc.

This isn't to say socialism is all great, it does have it's disadvantages, it does mean less elite universities for the small fragment of the population that can afford it, it does mean let billionaires, etc. What it does do is help the average person though, it allows the average to be better educated, it allows the average to be happier, it allows the average to be healthier. It means more people a better off, more people are healthier, and more people are happier. It means you don't end up with parts of your country being basically third world, like parts of New Orleans, and Detroit.

So sure, the US system is great if you're one of the few fortunate enough to be born into, or even fewer lucky enough to make it into the elite, but for everyone else, including people like you, it's far worse, so you're a fool for defending it, one of the fools discussed here:

http://news.bbc.co.uk/1/hi/8474611.stm

But I'm sure you wont get this, your post was ignorant and short sighted, and with that kind of ignorance of different political systems it's unlikely that you'll be able to have a sensible and rational conversation on this. Still, hopefully you'll suprise me and be able to show at least some grasp of the different merits of socialism and capitalism rather than an outright clueless troll suggesting that socialism is never productive. You only have to look at the UK, which is one of the least socialist and most pro-capitalist states in Europe to see that more capitalism has far from helped us, as we're still a weaker economy than France and Germany, and despite 2 years of more capitalist oriented changes to our economy by the government, things have only gotten worse.

Not a loophole at all

[DragonWriter]

Sounds like some loophole method of getting out of your debts

Corporations on the one hand and bankruptcy on the other are specifically designed as tools to limit and eliminate, respectively, liabilities.

Its not a "loophole", its the whole designed purpose of the institutions.

And this, Ladies and Gentlemen ...

[ryan.onsrc]

... officially marks the point in time where we have *literally* heard everything. From this point forward, stuff just begins to repeat.

i worked for another Lauder company

[Surt]

Interestingly, we were doing something similar, back in 1990 (ICTV). We had computer gaming over remote hardware using cable return path for the display (cheap custom box for keyboard/mouse). We eventually figured out that this was a fundamentally impossible to win game because of the light speed latency issue. OnLive will figure it out too.

Re:i worked for another Lauder company

[guttentag]

Interestingly, we were doing something similar, back in 1990 (ICTV).

The real question is: 22 years later, are they still paying you in stock options instead of salary?

Re:i worked for another Lauder company

[Surt]

Nope. Oddly enough, they stopped paying me entirely when I left. I did earn a combination of salary and worthless stock options while I was there, though. My second try with stock options (Guidewire) turned out somewhat better.

Re:i worked for another Lauder company

[Anonymous Coward]

Heh... Latency and the total system bandwidth will be the killer here.

Lots of fools saying "it works". Yeah, it works. For relatively small numbers of users. Even with SD, while the consumer end can keep up, how many users do you think it'll be until it hits an OC-3's worth of bandwidth for a given region? Not many (Hint: An OC-3 handles 100 T1's worth of bandwidth. The SD version uses a T1's worth of bandwidth peak and you have to figure peak usage to guarantee this will work.)- and this doesn't get into the reality that not very many gamers would have access to an uncapped and unmetered bandwidth to be able to make it more than marginally viable for end users.

Then there's the problem of light-speed latency. It's a hard limit. Doing the tricks they do in the game, they can create the illusion of responsiveness, etc. because the code does lag compensation, etc. This? This can't really DO that.

The people using this are neophiles and are NOT thinking this thing through. Seriously.

Re:i worked for another Lauder company

[Anonymous Coward]

Options are typically only worth using as *sswipe. The company has to be publicly traded and the strike price needs to be below market value for them to be worth anything more.

Stock's not much better, really. It's only worth control aspects of the company if it's not publicly traded. 7+ million shares of controlling stock of a company not publicly traded and not doing business is worth exactly as much as the options in the situation above.

Re:i worked for another Lauder company

[Surt]

Exactly. And we worked all of this out more than a decade ago, back when games were less sensitive and lower resolution. And our solution used cable return, so we didn't have the bandwidth problem.

Re:i worked for another Lauder company

[Surt]

Yep, I got very lucky with Guidewire (well, to the extent that I knew the people involved were bound to be the 1%, I was wise to hitch my wagon to their star, but basically I got lucky).

Re:i worked for another Lauder company

[rar]

I can see the point others often bring up about OnLive being "impossible" based on the total cost of bandwidth. But how can the light speed latency make OnLive impossible? Whatever theoretical calculations you can come up with are trumped by me actually playing Batman Arkham Asylum on Onlive and not being disturbed by the lag.

Re:i worked for another Lauder company

[Surt]

They can absolutely make it work for a few users, on a few games that aren't lag sensitive. But you have to live within about 250 miles of an onlive datacenter (and that's as the wire travels, not as the crow flies).

Re:i worked for another Lauder company

[Anonymous Coward]

While latency might make things worse, remember controller input to action on screen latency on console systems (PS3, Xbox360) is closer to 200 ms. You could make an online service with less latency than that.

What is dead...

[Anonymous Coward]

What is dead may never die. Or just experience extreme latency issues not entirely solved via compression. Either version.

Great scam!

[Anonymous Coward]

Sounds like 3 card monte.

Oh the company is gone! Now its over here!
Find the company find the company find the company and win your debt back!
Come on everyones a winner! Step right up!

1. Keep all the execs that ran it into the iceberg

[Rogerborg]

2. Lose half the staff who keep it running.
3. Profit!

No, wait, not profit, the other thing: keep bailing and set sail for the next iceberg.

Not the only reason

[Sycraft-fu]

Screwing over the banks would be another one. If the company had loans of any kind this would get rid of them for less money than they are worth. Loan holders are among the first to get paid with whatever a dissolved company is worth, but that doesn't mean they get everything they are owed. So say Onlive had $5 million in loans, they go bankrupt and this buyout happens for $1 million. The banks then get, at most, $1 million for the loans and that is that.

Basically it lets them get out of all financial obligations. Creditors (including people with options) get what they get which may be nothing and that is it.

Re:Not the only reason

[gl4ss]

the fishy thing is that management arranged a sale of assets to a company represented by the old management.

doesn't make it seem like it's abc for benefit of creditors.. rather abc filing for the benefit of inner circle. the handler for the abc should have been a 3rd party entity weighing the assets value on it's own, not a guy who gives the assets back to the inner circle for a token amount of money.

Re:This is why we need more workers rights / union

[bloodhawk]

The company was basically bankrupt, what possible benefit could more workers rights or a union offer? apart from making what little is left to salvage undesirable to anyone?

Stationary

[Dr Modesto]

And they get to use the old stationary too.

Recursion Joke?

[Dareth]

What that a joke about recursion or a joke about recursion or a joke about recursion EXIT CONDITION
Emptying the stack left as an exercise for the reader.

Any word

[wisnoskij]

On any salary changes in rehired staff or what happened to share holders from the original company?