Cloud-based gaming service OnLive is bankrupt and "no longer exists" as a business, but has been acquired by a wealthy business man who intends to form a new company to continue operations.
"I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone else's was included," said an email sent to employees, reports CVG.
It explained that a new company is being established to take over.
"A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service."
CEO Steve Perlman revealed to Joystiq that high operating costs ultimately lead to the company's demise.
"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," he said.
The service is likely to continue, as it is believed to have been bought by one venture capitalist, but his exact identity has not been revealed to the public.
All staff were let go on Friday, but a select few will be rehired as part of a new company that plans to keep OnLive operational, at least in the short term.
By Ben Salter