Aug. 18 (Bloomberg) -- OnLive Inc., the online video-game company founded by Web pioneer Steve Perlman, sold its assets to a newly formed parent that will provide funding to keep the struggling service running.
OnLive’s management is intact, Jane Anderson, a spokeswoman for the Palo Alto, California-based company, said yesterday in an e-mail. She declined to identify the source of the funding or provide terms.
The new funds allow OnLive, an early entrant in the online video-game business, to keep afloat as it eliminates staff to lower costs. The company began service in 2009 after seven years of development, with investors including AT&T Inc.’s AT&T Media Holdings Inc., Time Warner Inc.’s Warner Bros., Autodesk Inc., and Maverick Capital Ltd. Its competitors include Gaikai, purchased by Sony Corp. this year for $380 million.
The new company “will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive’s apps and devices” and partnerships, Anderson said in a statement. “The new company is hiring a large percentage of OnLive Inc.’s staff across all departments” and will continue to hire, she said.
With OnLive, consumers pay $9.99 a month for online access to more than 200 games. Customers can also rent or purchase games through the website. The service doesn’t require a video-game console such as Sony’s PlayStation or Microsoft Corp.’s Xbox 360.
The website Gamesbeat, which reported the sale yesterday, said employees were seen leaving the company’s headquarters in the afternoon carrying out boxes with belongings.
Perlman, who is president and chief executive officer of OnLive, founded WebTV Networks, a device that provided Internet access through television sets, and sold it to Microsoft Corp. in 1997 for $425 million in stock and cash.
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