UPDATE (12:28pm PST): OnLive has flatly denied the charges in a statement to Joystiq, “We don’t respond to rumors, but of course not.”
UPDATE (12:40pm PST): Brian Jaquet, Director of Corporate Communications for OnLive, has issued a less specific statement to Mashable emphasizing the stability of the service, but making no mention of the layoffs, ”no comment on the news other than to say, the OnLive service is not shutting down.”
UPDATE (2:05pm PST): In between conflicting rumors of bankruptcy and/or total layoffs, OnLive’s Brian Jaquet has recently issued another statement – this time to Forbes – to emphasize that “We are not going out of business”.
UPDATE (3:10pm PST): First hand accounts have come in from both Engadget and Game Politics, both confirming the fateful 10am meeting and an undisclosed amount of laid off personnel (the former estimates at least 50%). Allegedly, no severance is being offered to the employees whose key cards will be deactivated in little under one hour (at press time). According to both sources, the move was made in reaction to the company being purchased up by an undisclosed third party.
A report out of Mashable claims that the entirety of OnLive’s staff was laid off this morning as part of an All Hands Meeting at 10am PDT today. The company behind the first prolific cloud-based game streaming service looks to be transitioning into a new entity, and may be rehiring staff as part of the process.
Interplay founder and Wasteland 2 developer Brian Fargo had first taken to Twitter this morning to claim receipt of an email (reportedly also received by Polygon) confirming the closure of OnLive’s current business model by the end of the day, with a “new company” being formed down the road. Most recently, the company announced a partnership with the Android-powered Ouya console following its success on Kickstarter.