Just a quick update to my article on Cloud Gaming which can be seen here.
It has been reported by Engadget that OnLive is cutting up to 90% of its workforce after being forced to file for a Assignment for the Benefit of Creditors due to expanding its business without the necessary rise in customers (Economics 101: Laws of Supply and Demand seems to have been forgotten here!). Those losing their jobs are out by 4pm local time today after being informed in a meeting at 10am this morning. if its not bad enough to come to work to find out you and almost everyone else is being let go, they won't even receive any severance pay due to the legal state of the company, as they have entered a state allowing it to shake off millions in debt (including $40 million investment by HTC).
At $5 million a month to run the service and with the average concurrent user number for the service at 1,100 to 1,500, peaking at around 1,800 on a given day it is highly expensive with not anywhere enough users to cover the costs.
In a final bizarre twist Know Your Mobile reports that the company has been sold to its self (Technically a new start up company but owned by them) in an attempt to avoid bankruptcy and maintain supply to the end users, all be it with no investment and half the staff but most of the others to be rehired as consultants.
This is obviously a sad day for Cloud Gaming and completely a step in the wrong direction, but is a shining example of the old adage "Don't run before you learn to walk!" and why basic economics needs to be taught to businesses as they seem to have forgotten.
Links:
http://hardlyachannel.blogspot.co.uk/2012/08/the-future-is-looking-cloudy-but-this.html
http://www.engadget.com/2012/08/17/source-onlive-undergoing-acquisition-in-wake-of-dire-financials/
http://www.onlive.co.uk/
http://www.knowyourmobile.com/blog/1547381/onlive_sold_and_restructured_but_remains_onlive.html
Nosh, Signing Out.
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