OnLive, one of the more promising video game startups in the industry, is shutting down after receiving an offer it could not refuse from Sony.
The US company, which offered gamers a groundbreaking new way to play games over the inter web, said yesterday that it’s selling its patents to Sony. OnLive’s service will be shut down after April 30.
Selling the patents means that no one else can copy the same idea and cause Sony a potential headache again.
OnLive wrote in a statement: “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.”.
Sony confirmed the deal and implied that it would be using the technology for its gamers.
OnLIve was founded more than a decade ago by Apple and Microsoft alum Steve Perlman, OnLive was built to offer customers a way to play visually sophisticated video games without having to own expensive computing hardware.
The way it worked was through a technology called “cloud gaming,” where gaming programs would run on powerful computers in a server, and the images would be broadcast over the Internet to a gamer playing on a tablet or computer, much in the same way Netflix streams videos to television sets.
OnLive struggled and in 2010, it went into bankruptcy, during which OnLive laid off much of its staff and effectively sold itself to investor Lauder Partners. The company relaunched, offering streaming technology for gamers who used Valve’s Steam online store, but otherwise it appeared to scale back its ambitions.
In 2012, OnLive had .75 million active users, some of whom paid $9.99 per month to access its game library of 250 titles on devices ranging from TVs and PCs to smartphones and tablets. OnLive also at one point sold access to newer titles outright at prices similar to retail.
OnLive wasn’t the only company offering streaming technology. Sony built a streaming service for its PlayStation family of gaming devices using technology it bought in 2012 from a company called Gaikai for $380 million. The PlayStation Now streaming service, as it’s now known, launched in January.
Sony faces similar problems to OnLive: cost and lack of interest from gamers. PlayStation Now allows for the streaming of only about 100 older games. The company has also priced its service higher than OnLive’s, at $20 a month or $45 for three months. Sony has declined to say how many gamers have signed up for its service.
Sony said its continued investment “is yet another proof point that demonstrates our commitment to changing the way gamers experience the world of PlayStation.”