It feels like not that long ago the OnLive service was on the brink of something truly revolutionary, bringing cloud-based gaming to the masses. Major console developers were sweeping up services like Gaikai, and OnLive was slowly being factored into the launches of some highly anticipated retail releases.

Now, though, it appears the company has fallen from grace, and may in fact by on its last gasp. Just yesterday it was reported that OnLive fired at least half of its staff without the hope of a severance package.

Apparently high costs of keeping OnLive afloat were too much to bear, and therefore they had to ostensibly “gut” the company. Thankfully OnLive was purchased shortly after its massive lay-off and will be able to continue operating.

The nature of the purchase, however, is unclear, but apparently the new owners of the cloud-based gaming service not only hope to bring all of those laid off employees back into the fold, but they plan to hire more people. Along with trying to bring more employees into the fold and retaining those previously employed with OnLive, the company stated that their management team “remains intact.”

While OnLive was largely considered to be a technological experiment, the usefulness of said tool was hard to overlook. Granting gamers the ability to play on the go is something that many different publishers have attempted to emulate — Sony and Nintendo more overtly offer such a service with their Vita and 3DS, respectively — but that console experience isn’t all that easy to offer over an internet connection.

There is a place for OnLive, but it might not be in its current form, especially considering it came to some dire straits before being pulled from the rubble. Like Gaikai, if a major publisher were to purchase the service — and who’s to say that hasn’t already happened — that might give casual gamers cause to become interested in the company.

Have you ever used the OnLive service? Why do you think it reached such a breaking point? What does the company need to be successful?

Source: Joystiq, Engadget

tags: OnLive