
Assets of Palo Alto gaming company OnLive were sold off for just $4.8 million - newman314
http://www.mercurynews.com/business/ci_21735364/onlive-assets-palo-alto-gaming-company-were-sold-4-million
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phil
Just hate to see this part:

 _OnLive was a frequent customer or Prolific Oven Bakery in Palo Alto, said
Regina Chan, daughter of the owner of the local chain. By the time the company
went through its insolvency in August, it owed the bakery $2,000, which
represented about a month's worth of Onlive's orders, she said._

~~~
ChuckMcM
I would have disliked it more if it was the original owners, once Ms. Chan
bought it the quality of the cakes suffered, especially in the Saratoga store.
It went from being my 'go to' place for a delicious chocolate on chocolate
cake to 'I've not been there for like 3 years now.'

~~~
phil
Come on - your local bakery (even if it's a chain, even if you don't like it
as much as you used to) is a low-margin enterprise. Getting screwed out of
thousands of dollars is tough on places like that.

Plus that was just the example. If they were net-30 on the break room food,
it's a safe bet a bunch of freelancers and other local businesses also had
losses.

~~~
ChuckMcM
This particular bakery was pretty legendary for a long time in the bay area.

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YokoZar
"In a statement, the new OnLive said its predecessor's basic problem was not
its business model but that it simply hadn't raised enough cash for its
business to take off."

How do you tell when a startup is just desperate for cash and when they
actually mean something like this?

~~~
sounds
Came to comment on this specifically. OnLive was doing "cloud gaming" as in
pre-render frames in the cloud and stream them to the device. It has the
initial wow, but the devil is in the details, and OnLive had to solve them all
at once:

1\. Data caps are now the norm. A service that streams video 100% of the time
is swimming upstream. OnLive would also need to recoup the significant costs
of an uplink capable of serving all its customers full-HD streams. Typically a
video service heavily uses a CDN (think Akamai) to only upload a few streams
and then have the CDN push those out to edge servers. OnLive needed enough
bandwidth to be its own CDN. And cellular data is an even thornier problem in
terms of reliable throughput AND latency, which both have a direct effect on
OnLive's service.

2\. Game Studios are famously protective of their high-value assets. OnLive
needed to convince some AAA studios to do a new release of their titles on its
service. Engineering the games to work well with OnLive isn't the only problem
here: it would be easier to be wholly acquired by a big studio than to
convince anyone in the industry to do a deal that fit OnLive's marketing. Game
studios want to see big up-front profits on opening day. OnLive's marketing
was more along the lines of a trickle of profits over a longer term.

(Yes, they had some titles, but they needed bigger ones.)

3\. The OnLive marketing about enabling some amazing capability (like cinema-
quality graphics or breakthroughs in AI) swims upstream against what the
"cloud" is supposed to offer. An OnLive session for one customer takes several
machines, while the "cloud" basically makes money by stacking idle VMs so it's
many customers to a machine. The only way OnLive would make money is if
everybody rented the AAA title and nobody played it.

There is some really interesting tech in that space, but those are some basic
problems with what OnLive was trying to do.

~~~
jeffool
>(Yes, they had some titles, but they needed bigger ones.)

The tragedy here is, they had bigger titles. At the last minute before launch,
they pulled all EA titles from their service. When rival Gaikai got the rights
to offer demos for EA games (not to actually sell them,) CEO Steve Perlman
went batshit-crazy irate and pulled the plug. From then, even games that had
been confirmed or greenlighted were pulled if Gaikai got them first.

I recommend anyone who's interested in what went wrong read this story from
The Verge:

<http://www.theverge.com/2012/8/28/3274739/onlive-report>

~~~
jacquesm
If you leave the battlefield to your competitor that's not really a winning
strategy.

How is GaiKai doing now that OnLive has folded? Are they headed towards
running out of cash as well at some point or are they doing better?

~~~
jeffool
They were bought by Sony a bit back, actually.

And OnLive folded, and sold themselves to a newly created company named
OnLive. So, it's still there. And I think still has a lot of potential under
the right person. (With enough money.)

I still half-expect Steam to eventually offer streaming of games players
already own for a small monthly fee. I'd expect them to make gangbusters if
they did.

~~~
avolcano
Not only were they bought by Sony, they were bought by Sony for _$380 million
dollars._

Shows what a difference a business model can have. They both had cloud gaming
technologies, but while OnLive wanted to sell it right to consumers, Gaikai
went for the publishers.

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huggah
To say nothing of the people! We've hired three just in my group alone. At
least some of their assets haven't lost value...

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sshirokov
I kind-of hope they make it as a service. As a pure consumer of their product,
I quite enjoyed it.

~~~
michaelbuckbee
I'm wondering if you could expand on that some? I had tried the product
several times and just consistently found it lacking (sluggish controls,
etc.).

~~~
sshirokov
Sure.

I got out of hardcore gaming, and quite enjoyed the idea of booting up a game
in a few seconds on my laptop, playing it for an hour and forgetting about it.

It worked very well for things like Borderlands and a few indie titles
(Madballs, The Ball).

I also owned the physical console, so the transition of "I want to play
Borderlands for an hour on my laptop immediately after finishing this work
thing" to "My day is over, let me pick up that same game on the TV" was
pleasant.

As far sluggish controls, on a connection that exceeded 10Mbps, the experience
was only slightly worse than a wireless controller on a console, and after a
few days of it being the only time I picked up a game I adjusted quite well.

I've since accepted that the service was aimed squarely at the market that my
situation happened to exactly occupy (high bandwidth, casual gaming, multiple
physical devices, just the right titles..), so your mileage may very well
vary.

~~~
michaelbuckbee
Thanks for taking the time to explain that some more. I'm in a similar spot
and _really_ was hopeful that OnLive would be awesome, but just for
connectivity reasons I think it was never sufficiently playable.

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ivanb
In modern gaming responsiveness is the prerequisite to everything. You can't
fight the laws of physics. Server-side only latency hiding just does not work:
there is always a noticeable delay between a key press and visual response.

In addition a decent gaming PC doesn't cost much these days and games on
mobile devices are as enjoyable as desktop and console ones. They will get
even cheaper and cooler with time.

There is no reason for existence of such a service.

~~~
andybak
Did you actually play OnLive? I've played FPS shooters on it for hours quite
happily.

~~~
ivanb
It is not available in my country, so no. Actually after your comment I've
read and watched several modern reviews of the service. Players don't seem to
be complaining about the latency so maybe it is really not that noticeable as
I thought it would be. Thus my initial point about the latency does not hold
much water.

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6ren
> OnLive's assignment came less than two months after Sony bought rival
> streaming game company Gaikai for some $380 million.

I heard about OnLive all the time, but never Gaikai. Was it big in Japan
perhaps?

According to jeffool, it seems Gaikai got EA demo rights, and OnLive then
self-imploded <http://news.ycombinator.com/item?id=4635405>

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codeonfire
That's not bad. What really does a software company have other than IP and a
few computers? Even considering this, IP is a risky asset which probably won't
create much cash flow on its own the way a piece of real estate would. The
real assets are in knowledge, but those can only be rented.

~~~
kamaal
I was talking to a person who had started a company and went toast. He bluntly
put it, what remains after a software shop shuts down are 'just files' on the
hard drive.

This is especially true when the company doesn't own any real estate at all.
After the shops shuts down, nearly everything gets sold for half price.

My chair at home costs 25K INR if I buy it in the showroom, I bought it from a
scrap shop for 2K INR, the guy in the scrap shop told me the chair came a
software shop which closed recently. That is how low things like
infrastructure get sold.

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gauravkumar552
I think this was the time when OnLive could have gone for "debt restructure"
and save the company for a few years. Either it would have been successful in
business or could get more payout.

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belthasar
I always wondered why they never made a service for the Wii. To me, it seemed
like the perfect device to test out whether console streaming has merit.

~~~
madaxe
They blew their budget on cupcakes.

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chadnickbok
I am so, so glad that I decided to apply at Gaikai and not OnLive... :'D

