OnLive Sold To OnLive And Nothing Will Change
techcrunch.com
techcrunch.com
For me, the key phrase in this article is the first one: "Faced with a dire financial situation...". The nature of working for a startup where you trade current income for potentially huge future income implies a level of risk. Looking at the breathless press coverage, it's easy to imagine that most startups are a raging success. The truth is that most will be in a "dire financial situation" and have no choice but to perform some juggling if there's any chance that they'll stay in business.
It's quite possible that the owners were deliberately trying to screw the employees, but more likely is that it's a desperate move by desperate management who are trying to salvage their dream.
I can't find any descriptions of the cause of the crap finances, especially with millions of subscribers. A likely scenario seems possible: their financiers/vcs decided they didn't like the direction the company was taking/unhappy with growth and called in their loans and forced everyone out.
Everyone, except the vcs, takes a haircut.
(Was there a more straightforward reason?)
"There's no way to exactly estimate how many servers we'd need. So we literally bought thousands of them, and all the equipment and networks to go with it," Perlman told employees. Those servers, he said, came with lengthy contracts -- contracts that tied OnLive's capital up in maintaining servers that few (if any) users were actually using. "If you've got 8,000 servers and 1,600 users, how could we ever get to cash flow positive, right?"
-- http://www.joystiq.com/2012/08/18/documenting-the-death-of-o...
(How do the GPU clusters even work? And, at $2 it seems way more expensive.)
Cluster GPU Quadruple Extra Large Instance
22 GB of memory
33.5 EC2 Compute Units (2 x Intel Xeon X5570, quad-core “Nehalem” architecture)
2 x NVIDIA Tesla “Fermi” M2050 GPUs
1690 GB of instance storage
64-bit platform
I/O Performance: Very High (10 Gigabit Ethernet)
EBS-Optimized Available: No*
API name: cg1.4xlargeThe other big thing is that GPUs have very limited scheduling (i.e. no pre-emptive multitasking), so it's virtually impossible to virtualize into multiple VMs efficiently. So when you get a GPU machine you end up with isolated hardware which doesn't share the same economics as other Amazon solutions. As GPGPU become more popular, this should, however, improve.
I also question the need for one VM per client. There's a very small set of inputs (input devices from the client) and a lot of static output (rendered frame). Why not share the same VM for a set of games that share the same GPU?
2. Worst case, at the very least you sell your excess capacity as cloud computing resources so your servers aren't sitting there doing absolutely nothing.
I've said it from the very first beginning (and got flamed for it), but IMO the business case for cloud gaming is simply very weak. If there is one at all. It requires highly specialized data centers everywhere around the world to work, and to cover the expenses you need to charge people as much or more as they would have to simply buy the hardware and games directly, and have a better game experience.
Hardware is getting cheaper and more powerful all the time, so you have to wonder why anyone should be surprised building data centers everywhere in the hope that people will pay to use them to play games, is not a very solid way to make money.
The worse alternative would have been to not restructure and just shut down the company leaving everyone without stock options, jobs and probably without severance either.
In any event, OnLive might as well just shut down anyway. It has completely poisoned its name and nobody worth a damn would go work there after this stunt. And it's far too ambitious a project to have any chance to thrive with B-level engineering talent working on it.
I'd be camping out to take them up on that offer!
I really wonder how you can face your fired employes and tell them that all their stocks are gone but that they can do some consulting do get those back.
The old OnLive was poison.
Gee techcrunch, I wonder who started those rumors?
What is the name of this assignee? They seem very motivated to not state that piece of information, or how much he was paid by the OnLive Mk II company for these assets.
"An affiliate of Lauder Partners was the first investor in the newly-structured company..."
http://www.lauderpartners.com/
Edit: Ah, I just realized that isn't exactly the answer to your question, but may be relevant at least...
Active Video Networks has for years been trying to do the same thing on Cable Set Top Boxes what Onlive has been doing with Games to PCs. Which is basically move all the processing to the cloud with low end thin clients in the home. In the TV Case they'd push interactive apps (via an MPEG frame over your cable infrastructure) to your cable box and basically you could get a whole interactive TV system on crappy old cable boxes.
Looks like Gary Lauder (who's the main guy at Lauder Partners) is doubling down on this strategy.
> We start cutting corners and being a bit more conservative, and then finally Sony comes to our rescue. But when they look into how our business is being run, they see it's a mess, and pass. We're basically left screwed, but then Steve approaches Microsoft and begs them to take us. They see we're on the verge of bankruptcy and tell him they only want the top-earners and "brains" behind the operation (the 1%) and that they'll pass if he doesn't "trim the fat." So that's exactly what he does.