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OnLive reportedly hit with mass layoffs, company denies it's closing (update) | The Verge

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The Verge received an e-mail from a supposed employee confirming the staff layoffs and expressing uncertainty about the future of the service. "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," the e-mail reads, in part.

OnLive is one of a number of services that seeks to revolutionize game distribution by running games on high-end remote servers, taking in player input over the Internet and sending video and audio of the game back to the user. The company insists its proprietary technology makes the experience indistinguishable from playing on a local machine, but our tests found noticeable (though not unplayable) input and display lag when using the service.

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