OnLive reportedly shutting down, but company denies rumor

Cloud-gaming service OnLive is cleaning house and shutting down, The Verge has heard from video-game developer Brian Fargo.

“I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist,” an anonymous OnLive employee wrote in an email that was forwarded to The Verge. “Unfortunately, my job and everyone else’s 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.”

In a statement to The Verge, OnLive’s director of corporate communications denied that the company was shutting down, saying “”we don’t respond to rumors, but of course not.”

Meanwhile, Mashable has been told that OnLive’s staff was laid off during an all-hands meeting this afternoon.

Update: OnLive revealed in a statement that its assets have been sold to another company.

We can now confirm that the assets of OnLive, Inc. have been acquired into a newly formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive’s apps and devices, as well as game, productivity and enterprise partnerships. The new company is hiring a large percentage of OnLive, Inc.’s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees. All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services. We apologize that we were unable to comment on this transaction until  it completed and were limited to reporting on news related to OnLive’s businesses. Now that the transaction is complete, we are able to make this statement.

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