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Cloud gaming service OnLive was sold back in August for just $4.8 million despite initial success. The service was estimated to be worth around $1.8bn when in it’s prime, only highlighting the steep decline the company experienced.
It was reported a few months back that british-based cloud gaming service OnLive had sold poorly as well as having a very limited user base. That report was promptly followed by the announcement that OnLIve had been sold to a venture capital group. It was revealed today by the BBC that OnLive owners, following an allegedly shaky deal agreement, sold the company for just $4.8 million, far below the estimated worth of the company. OnLive spent months touting their cloud gaming service, but steep digital prices and a lack of software choice led many to turn away from the company. Certainly OnLive offered a revolutionary method of retail delivery, but for many UK and US residents the concept was too far ahead, as many experienced problems streaming the games through their rarely perfect internet connections.
OnLive rival Gaikai was sold to Sony earlier this year for a far more impressive $380 million, a fact that not only underlines the failings of OnLive but also proves that cloud gaming is not a pipe-dream. While OnLive quickly collapsed, Gaikai has gone from strength to strength and built up a dedicated user base.
The poor deal for OnLive is perhaps most tragic when considering the employees who were struck off with little compensation. Stockholders have also received no compensation due to the poor sell-out price, the company was in an almost $20 million debt before the buyout even occurred.
So perhaps this is merely an example of bad business as opposed to a sign of the decline of cloud gaming. Regardless, it’s sad to see a young enterprising gaming business like this turn for the worst, here’s hoping this is an individual circumstance.