Sony Is Buying OnLive’s 140 Cloud Gaming Patents And Other Tech, OnLive To Close April 30

A final coda to the opera that has been OnLive — the cloud gaming company that was once estimated to be worth $1.8 billion but, saddled with debt, went through a dramatic round of layoffs before a surprise sale for $4.8 million. Sony Computer Entertainment is now buying various assets of the company, including 140 U.S. and international patents for cloud gaming services. Meanwhile, Onlive itself will be closing its operations on April 30. As of today, the company is not renewing any subscriptions.

Specifically, OnLive says that the OnLive Game Service, OnLive Desktop and SL Go (Second Life) will all be available until April 30. But, “After today’s date, no further subscription renewals will be charged for any of these services. Users whose subscriptions renewed on or after March 28 will be refunded,” the company writes in a statement. “Following the termination of the company’s services and related products, OnLive will engage in an orderly wind-down of the company and cease operations.” It’s not mentioned but it sounds like CloudLift Enterprise is also included in this closure.

At one time, OnLive’s patent portfolio alone was estimated to be worth hundreds of millions of dollars, although it’s anyone’s guess whether the company was able to achieve that price because terms of the deal with Sony are not being disclosed.

Nevertheless, it comes at a time when Sony itself is reeling from its own gaming misfortunes. This positions it as a “formidable” IP holder, Sony says, which seems to point to both its ambitions to push ahead in its own gaming development via PlayStation, but potentially also to go after those who it feels infringe on its tech.

“These strategic purchases open up great opportunities for our gamers, and gives Sony a formidable patent portfolio in cloud gaming. It is yet another proof point that demonstrates our commitment to changing the way gamers experience the world of PlayStation,” said Philip Rosenberg, VP, Global Business Development of SCE and SVP Business Development and Publisher Relations of SCEA, in a statement.

A spokesperson for OnLive would not comment on how many users will be affected. In 2012, the company was estimated to have 1.2 million registered users, although no more than 1,600 were playing at any given time.

OnLive itself, meanwhile, currently has 80 employees. It’s not clear whether they will have jobs or not at the end of this month. “Sony has a number of positions for which they would like to recruit OnLive employees, but no decisions have been made yet,” the spokesperson says.

OnLive was a trailblazer in the world of online, cloud-based gaming and it courted big, strategic investors in its mission to take this mainstream. Investors once included Warner Bros, carriers like AT&T and BT, Autodesk, and HTC.

But, as tech history has proven time and again, sometimes being the first mover is not as lucrative as being the third or fourth. In the case of cloud gaming, many others piled into the space offering an approach to accessing games more sticky than OnLive’s subscription model.

Between competing against other, larger incumbents and smaller fleet-of-foot startups eschewing larger screens in the living room in favor of smartphones, OnLive was stuck between a rock and a hard place. The company had worked to rekindle its business in the wake of the sale with new deals to optimise AAA games for new devices. However, today’s news points to some of that effort perhaps failing to meet expectations.