OnLive streaming game service shutting down, sells assets to Sony

Cloud gaming company OnLive, an early pioneer in streaming video games over the internet, will shut down its game service later this month, the company said today. Sony is acquiring "important parts of OnLive," according to an announcement, resulting in a discontinuation of the game service.

OnLive's game service will come to an end April 30. After that date, all accounts will be closed and all user data will be deleted, the company said. In a support FAQ, OnLive says no further subscription fees will be charged for the game service. The company will not offer refunds for Steam games purchased with the intent of playing them via OnLive and will only offer refunds for OnLive gaming hardware if it was purchased on or after Feb. 1, 2015.

Like OnLive Game Service, the company's Desktop Service — a remote Windows Server desktop environment — and SL Go — the service that streamed Second Life to iPad, Android tablets and PCs — will also come to an end on April 30.

"Following the termination of the company's services and related products, OnLive will engage in an orderly wind-down of the company and cease operations," the company said in a statement.

OnLive launched its cloud gaming service in 2010, originally with a monthly subscription plan. The company dropped that subscription fee a few months after it launched. OnLive also launched its dedicated microconsole and controller in 2010. The company was hit with mass layoffs and filed for a form of bankruptcy in 2012. The company restructured, and its assets were purchased by a newly formed company, OL2 Inc., that year.

"Overcoming the perception of being dead has been one of the unanticipated challenges"

"Although the new company continued all of OnLive's services from that moment forward without interruption, the public perception was that OnLive was gone," the company said in a blog post today. "That misconception continues well into 2015. In fact many of the recent articles that mention OnLive refer to it as 'defunct' or something similar. Overcoming the perception of being dead has been one of the unanticipated challenges of the turnaround."

OnLive said that perception and cooling interest in cloud-based gaming impacted both the company and the technology's value.

"In 2012, Sony bought Gaikai for $380M, and we felt that we were worth at least as much," OnLive said, "but we did not anticipate the 'hype cycle' running its course and the resultant disillusionment and skepticism of cloud gaming that ensued."

Sony Computer Entertainment officially launched its own cloud-based gaming service, PlayStation Now, earlier this year. The service streams PlayStation 3 games to a variety of platforms for a monthly fee.

"We are happy that Sony is validating the innovations of OnLive by purchasing our IP and selected assets, and are immensely proud of the work that has been done by the talented team at OnLive, and we thank them for their amazing work," OnLive said. "We are also grateful to our customers, game publishers, distribution partners and many other partners who have helped make this a reality over the years. We look forward to a bright future for cloud gaming at Sony."