Onlive assets sold to venture capitalist for $4.8 million
updated 04:55 am EDT, Thu October 11, 2012
Cloud gaming company purchase days before liquidation
The assets of cloud gaming service OnLive were sold for under $5 million, following the public collapse and mass lay-off this summer. The Mercury News obtained a letter from the company managing the insolvency showing the offer of $4.8 million from venture capitalist Gary Lauder just days before liquidation was set to take place.
A statement from the new company said that the previous incarnation of OnLive suffered from a lack of funds raised for it to take off, and not its business model. “When planned financing didn't work out, the company was left with few options," the statement reads, "Transitioning through this unexpected event has not been easy, but it has left the company much healthier."
The new OnLive intended to keep on roughly half of the staff laid off in August, though the initial rehiring of former CEO and company founder Steve Perlman was short-lived, resigning two weeks after the insolvency. Other companies, such as Microsoft, attempted to recruit some of the former personnel, in an effort to counter Sony's acquisition of cloud gaming competitor Gaikai.
The letter mentions at least $18.7 million in outstanding debts, excluding fund owed for contractual obligations, which is significantly lower than the $30 to $40 million estimated to be owed. Creditors are set to receive at most about 26-percent of funds owed to them.
