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[Update: OnLive service to continue with “no expected interruption”] Cloud gaming service OnLive shuts down “today”, claims Brian Fargo


Update: While OnLive the company is clearly very much in flux, OnLive the service will continue with “no expected interruption”. In an official emailed statement, a spokesperson confirmed that OnLive had been become part of a newly-formed company backed by mystery “substantial funding”. This new entity will hire back a “large percentage” of staff laid off today, and will continue to support OnLive Game and Desktop services, so there’s no cause for worry there. What we’ve witnessed in the last few hours is business sleight of hand on a large scale, and we’re yet to see the trick’s prestige; what we can do is take small comfort from the fact that, on the wee end user side of things, nothing is set to change. Phew?

Things have taken a turn for the unexpected and the very unwelcome. Promising cloud gaming platform OnLive will shut down “by the end of the day today”, according to inXile head Brian Fargo.

Fargo reports that OnLive’s employees have informed him and other developers via email that the company will be closed today. While a new company will be apparently beformed from its ashes, its form is yet to be revealed and all current staff will allegedlylose their jobs.

Fargo quotes from the email on Twitter as follows:

“I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone was included. A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service.

“It has been an absolute pleasure working with you and I’m sure our path withcross again (sic).”

It’s a sad day when a forward-thinking company goes under without warning, especially after OnLive’s apparently successful UK launch. There’s no official confirmation from OnLive as yet, but we’ll have more as it comes.