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Once Valued at $1.8B, OnLive Was Sold For Only $5M
gabebear writes with details of what happened to OnLive back in August: "In a firesale, OnLive, which was once valued at $1.8bn, was sold for practically nothing. Workers are mostly losing their jobs and stock options and investors are having to write off their investment."
More details.
Surprise? There is none.
OMG you know what this means?! They FINALLY realized that you can't stream 60FPS video streams of 1920x1080 over the internet!
They may have even discovered that gamers don't tolerate an internet connection level of input delay in their games! And that serious gamers want to own their own gear! And that gamers do other things than games on their computer so they own a faster computer anyway! And that rendering a 1920x1080 video stream locally also takes a fast computer!
Perhaps subby was trying to make a comparison to another over-valued corp. Aka, Facebook?
I wonder how much the state of our network connectivity had with their failure.
More and more providers roll out BW caps, over sell their network BW, and raise their prices for the higher tiers.
I once valued my microwave at $1,100,000 but ended selling it for $20 on Craigslist. There was disappointment all around.
As well, I once had an idea for a jetpack that I valued at $20 billion AUS dollars ("billion" with a "b"). Unfortunately I sold that idea for a pint of Fosters to work colleague.
Wearing pants should always be optional.
... news at 11.
Once over-hyped at $28 billion, Facebook sold today for $523 and a case of beer.
What political party do you join when you don't like Bible-thumpers *or* hippies?
Sad, I didn't even know they had sold. I used OnLive's service for a few months and enjoyed it. Only quit due to changes in my personal budget. I wonder if the "spectate" mode is what took them down, where people could watch others play for free? Looks like Twitch has filled that spot.
i remember when onlive first came out i dumped my xbox and all my games in the garbage to join up. i mean gaming in the cloud is so much better than doing from a hard drive
i know you end up paying more than owning physical games, but its da cloud. its the future and so much cooler
More at 11.
So where did the value come from. Facebook was worth gagillion dollars, but was offered for less than 100 billion and is now worth around 40 billion. Like so many people on this site, who believe a product is worth what it cost of what the seller believes it is worh, market realities are a harsh mistress.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
They'd only get a case of beer from me. Really cheep beer at that.
Ew, PHP.
Depends on the brand of beer. I am not sure I would bid anything over Pabst Blue Ribbon.
Eh. I tried OnLive to see how well they accomplished what they did. Latency wasn't the main concern, but then I have a reasonable connection (~25Mbps) and may be geographically near one of their data centers. The main problems are more the following:
In the end this always seems to fail at a financial level: if it's cheap enough per-player that a $10/mo fee can cover licensing, hardware, and utility, then it's probably cheap enough the user is going to have his or her own device (e.g., a smartphone). If not, then it's not going to work anyway.
And it's not a matter of volume. Nintendo, Sony, and MS have volume on their consoles, and they still sell for $200+, often at a loss, and the only maintenance cost is warranty support. Making up for this on licensing isn't an option for OnLive, since they don't make any games. There are no exclusives.
The only way this might work (financially, at least) is a subsidized hardware console with a reasonable contracted subscription fee, and first-party game support as well as third-party exclusives. Gamestop might be trying this, but it's unclear if they're actually funding games or just providing a similar service.
Don't think of it as a flame---it's more like an argument that does 3d6 fire damage
I remember once seeing Activision's CEO praising OnLive and its concept.
Figures that HE would love the notion of games being completely out of control of the player. That's the first step in turning games into a pay-per-view service where you play the first hour for 10 dollars--I mean 9.99--and then 4.99 for each additional hour.
Unless you want the bonus content. Then it goes up by 1 dollar per hour. Oh, and if you want to play with double the health, that's just an extra 50 cents per hour! Ammo clips are 25 cents each, too.
The Internet King? I wonder if he could provide faster nudity.
I beta-tested OnLive a long time ago, and by the third day it was back in the box, ready to be shipped back. It took a long time to pre-buffer a game. The game prices were too high. The resolution wasn't that great, and it didn't have most of the games I actually wanted to play. A company with an existing revenue stream could get into this market and support the initial losses with their other products. Valve/Steam could do this. Valve already has an existing profitable business model (digital distribution of games on PC/Mac). They're branching out into distribution of apps. They already offer Steam on TV. But I just don't see the draw yet. A decent, $500 PC can run most games on acceptable settings. A gaming console is only $300 and there are tons of games available.
I can see something like a hardware add-on that does game streaming, but both Sony and Microsoft (XBLA) offer game and video downloads. So I'm not quite sure where a dedicated game-streaming device will fit in (and be profitable). If I wanted to spend $50 on a game, I'd get it for PC or a console and have a much better experience.
I don't think the market for something like this will happen until most of the US has affordable, reliable, and reasonably fast (10 mbit+) internet. And when it does happen, I think it's going to be a side-market by an already-profitable company.
I was told that I could listen to the radio at a reasonable volume from nine to eleven...
OnLive had a pile of debt and a pile of employees with a pile of stock options.
The "bankruptcy" invalidates all those stock options and means that half the employees can be sacked. Many of those may not be needed because they worked on things like early stage development which is no longer needed.
But guess what? The new company that "buys" the assets of the old company then basically becomes identical to the old company, except that you have suddenly sacked a lot of people, and the remaining employees including the CEO gets 2X the stock options they used to have.
What's interesting is that the creditors and investors of the old company were happy with it being sold at only $5m. It wouldn't surprise me if the investors in the new company are identical to the investors in the old company.
I'd go as high as Old Style, maybe Schlitz .
With Onlive's ridiculous pricing, are people actually surprised? The last time I took a look at Onlive they were "selling" games at about the same price as retail. Why would I want to pay retail price for something I am essentially renting from a new and untested company while having no recourse when they go under?
Depends on the brand of beer. I am not sure I would bid anything over Pabst Blue Ribbon.
Pffft, that would only appeal to hipsters - And everyone knows they all still use MySpace for the irony-cred.
Their service won't be viable for at least 10 more years. So it's not worth anything.
It refused to run on my ~1.5 megabit connection. So the only place I tried it was on my tablet at a restaurant for a few minutes.
I could see it being ok for casual games, but anything requring precise timing would be very annoying.
I'm certain the company that bought them will be able to easily turn them around, like Myspace, AOL, Prodigy and that search engine named after chocolate milk.
Many companies have their day in the sun. Remember that Apple.
It took this long for them to go belly up. I was also surprised that the "pay to play LAN games by the hour" store by me took two years to go out of business.
About a month ago we had a similar article, and it turned out that they were just going bankrupt so that they could start anew with less stockholders.
Is this for real this time? or is this just a duplicate article?
Troll is not a replacement for I disagree.
OnLive? That telephone-like service for old folks? Good riddance, in times of digital Sat-Navs.
Wow, Zuckerberg's getting bitter.
if I had one, of course.
-badford
All these useless overpriced IT companies will go the way of the dodo.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
A lot of people (particularly I'm discussing western political leaders, but not just them) state as a matter of blind faith that markets are effective allocators of capital
OnLive to me is another DotCom Crash Co, it just happened rather later: We all know the basic story, they said they could deliver high fidelity gaming as a service, thus freeing users from the capital investment of the console and turning a sales market into a services market
Most of us scoffed, pointing out things we understand about residential internet connecticvity, the devastating efffect of lag upon gaming, and the implausibility of the system in general. Institutional investors looked at what the company said, thought ' turning a sales market into a services / rental market is a good thing, it means higher long-run revenues' and poured money into it.
I have limited sympathy - they invested badly. Only real benefit was to the coders who had jobs there for a few years. But I do think the idea that investors will run to invest in markets they patently dont understand doesnt speak well for the efficiency of the capital markets.
I have been a user for about 10 years. This ends Feb 2014. The site's been ruined. I'm off. Dice, FU
Digg just sold for $500K. Also tanked or tanking: Tribe, Salon, Myspace... Tribe and Digg started to tank after they did a "Web 2.0" site redesign which users hated.
With "social", just because you have "clicks" doesn't mean you make money.
that the value of a company is bullshit compared to the reality of what a company is actually worth. This is why the world's economy is in the tank, because there is a huge disconnect from the fantasy numbers that get thrown around and the stocks traded on compared to the real value of a company.
I haven't thought of anything clever to put here, but then again most of you haven't either.
Obvious and ignorant comment is obvious and ignorant.
Yes, yours was. But normally I'd be a little nicer and just point out that yours is self-contradicting.
I miss the days. The days when...
When you purchased a game it actually belonged to you. You could trade it, sell it, put it in the closet and play it again 20 years later, you let a friend borrow it, you could throw it away and you could do whatever you wanted with it because it actually belonged to you. I miss actually owning what I pay for instead of still paying for it but essentially just leasing it for a undetermined amount of time.
When you could play a game without a internet connection. Or you could just put in any game you owned and play it without having to download it.
When DRM wasnt fucking causing the real paying customers more hassle than the people who stole the games. I remember when the customer was considered important and treated like they were via the products they purchased. Customers didnt get nearly as many buggy, incomplete and cookie cutter type of games awhile back as they do now. Now its easier to play your games if youre a thief, you dont have to pay outrageous prices for a game that is probablly going to be another "me too" game or just complete garbage and you dont have devs/pubs telling you that you should buy their games and follow their ever restricting rules while they give you headaches and bad customer service.
When you didnt have a code to activate in your game online so you could play the damn thing.
When developers started pimping DLC for their games announcing new content to be purchased and downloaded before the actual game came out the DLC is for. Or when developers didnt carve out pieces of their games to sell you later or hold back ideas for DLC. When developers released a game and putting as much effort into making it a good experince as possible and instead of DLC you got a real expansion with enough content to qualify as a whole new game.
Those were the days but atleast onlives failure is a definite win for the gamers. One less restrictive, expensive digital avenue down the drain and we have one less figurehead on the side of a pure digital access for our games.
I am primarily a mac user, and this was the way I was able to play certain games that didn't get ported over, like Arkham Asylum and such. And they looked a heck of a lot ebtter than if I'd just run them in a VM or something like that. I had occasional bandwidth issues, but that was generally down to my ISP in any case. Frankly, I thought they were the bee's knees, and I'm sorry to see they seem to be going the way of the dodo. It's still a good idea, to my mind. Maybe just needs a little tweaking to make it a viable proposition.
Principle investor somehow manages to buy all pooled assets of the company to brush everyone who invested anything in the company thus far and runs off with their work at a mere additional cost to itself of pennies on the T-bill.
I know most of us have given up on the idea of a game that we own that we can actually resell or lend to a friend, but I try to only buy games that have physical discs and aren't locked to my account. I *do* make exceptions for games that I feel are priced appropriately for me to give that up. Indie and steam sales do often bring the cost to the point where I can be okay with a play it and throw it away mentality.
I am usually a very patient gamer player titles that are years old, but I did make an exception to all of my rules for Borderlands 2. I felt the sheer enjoyment and entertainment from the first one was worth paying the GMG pre-order amount ($40) for the 2nd game. So far it's met my expectations.
I have a big feeling the whole "cloud" bubble is about to burst. It's just not a sustainable business model, similar to the DotCom burst in the early 2000's
Personally, if I can't own my games, as in having a physical media to install the game from (and DRM free), then it's not worth my money. Less cloud, more down to earth.
Pfffft, Myspace? That HTTP-using sellout?
Real hipsters switched back to personal gopher sites a while ago. Soooooo vintage.
that OnLive is OnDead?
Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
So when you are talking latency for something like interactive video, you have to take in to account the amount of time it takes to transfer a frame on top of the round trip packet time. So this means to keep latency down you need to set your stream to less than the bandwidth you are going to require, significantly less.
Onlive used a 1mbps stream. That is not at all enough to do quality 720p video, never mind when you are trying to do it at 60fps as they were. Just not enough bits for all the data you want. So you are going to get artifacting and all that jazz. Of course this is on top of the inherent quality loss that video compression these days does like chroma subsampling and so on.
There's just no way to make it work well, unless everyone has much faster connections, and even then there'll still be interface lag from the latency.
That aside there's the problem that never mind consoles, it is cheap to upgrade your computer. If you've a reasonably modern computer for about $100 you can drop in a pretty good discrete GPU and all of a sudden the thing is good at playing games. That is the only thing most new systems lack, CPUs are all kinds of powerful, it is hard to get something without 4GB of RAM, they just don't have dedicated GPUs.
For that matter, the integrated Intel GPUs are getting pretty good. Games are officially supporting the Intel HD 3000 and 4000 series GPUs. No, you can't crank things up but they run surprisingly well. I've messed with it on my laptop which has switchable graphics.
As such their only market is people with really old computers that can't be upgraded, or low end un-upgradable computers like netbooks. Neither are groups that are likely to drop a lot of coin on gaming. Oh, and of course they have to have good internet to use it.
It just isn't a sensible business model. To the extent we ever have "cloud gaming" it will be a case of hardware that renders locally and just downloads the binaries/assets in an on demand fashion from a data center. It solves all the interface lag, compression, etc problems and really hardware is cheap and getting cheaper.
I am a current OnLive user, and I'm quite happy with it. Most of the comments here seem to be beyond willfully ignorant. I had no idea OnLive was the new Microsoft on /.?
I agree that their pricing model is about as ignorant as the comments here though... I have never paid full price for any of their services. I "bought" Tropico, a game which would not run on my home computer, with a coupon for $1 and continue to enjoy going back and playing it from time to time. Civilization: Same story. Red Faction: Ditto, except I got it for free for a weekend, which was long enough for me to complete it.
Two issues:
1) Latency is still a problem. This idea that they'd ever be in local data centers all over the world is just stupid. That is expensive and difficult to do. The whole appeal of "cloud" type of stuff is you don't have to give a shit where you host. You pay someone like Amazon who has massive data centers in a couple locations to deal with your shit. So they'll always have interface latency problems.
2) In 10 years, it'll be an even harder sell over cheap hardware. What low end hardware can do keeps going up and up. 10 years ago integrated graphics were so bad they sucked for Windows itself, never mind games, and phones were monochrome character based deals. Now games officially support Integrated graphics as they are good enough and our phones run the Unreal Engine 3. Give that 10 more years and cheap hardware is going to be awful hard to compete with.
I hope this doesn't mean they're closing. I purchased an onlive console for my television. I purchased Dead Island, Kane & Lynch, FEAR 2, and FEAR 3. It works really well. The fact that I don't have to purchase an XBOX and physical disks was the selling point for me. Hopefully I'm not SOL...
For those of you who haven't tried it, it works really well if you've got decent internet connection speed. If you're a casual gamer (read: your life is not defined by frame rates and frag counts) it's a pretty great deal.
Onlive or something like it is the future of gaming (as opposed to optical disks and consoles), just like Netflix/Amazon streaming is the future of media and not DVD/bluerays. Perhaps the futures just not quite ready to get here yet.
Bought by the mythbusters cause they needed a few buildings to blow up.
DotCom 2.0 is now DotGone 2.0
I was inquiring w/Perlman for a friend that was about to interview there. He turned it around and tried to recruit me...(my friend did get
the job however... along with a couple of other past co-workers...)
I told him in email I was comfortable and did not want to risk a startup given I had a good paying stable job.
to quote the Blues Brothers:
"You'll never get Matt and Mr Fabulous outta them high paying gigs"
H.
The lag, oh god the lag. Once the server receives data (if you’re playing online) it has to then forward it to you, which then you respond to and forward it back to the server, which then forwards it to wherever you’re playing. You’re talking about a quadruple jump in latency. Double simply to respond. If you’re cruising along at 20ms that is a lot less noticeable, but chances are people aren’t. Basic input just to move your character is very noticeable.
Video quality.
Number one reason it was stillborn is bandwidth caps. Getting a 1080p experience you’re streaming every time you play a game (for some people 8 hours a day), that’ll eat your bandwidth cap in a few days. This is something no amount of technology will get around as it’s a fixed part of the market. Unless Onlive builds their own infrastructure, a-lah google, no amount of cash injection will fix this.
The best thing Onlive could’ve done was build a bunch of micro-datacenters instead of one big data center in TX or where ever it’s cheap. Pretty much one per state, so the games have low latencies to onlive, onlive lowers it’s bandwidth costs, and possibly even link onlive centers for extremely fast play. Of course they would’ve done this if they were smart. Possibly even rolling out a ‘extreme’ package to local gamers in the form of fiber lines bring latency down below 10ms for even online gaming.
Honestly though, the disconnect between when you push a button and when the screen reacts is huge. I personally would never want to play cloud gaming unless we’re talking about 1ms response time.
Minimal assets, no revenue stream to speak of. Legally dubious use of Microsoft software. "Yeah, we're worth $1.8bn!".
Yeah right...
I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.