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OnLive, the most prominent game streaming company is no more. The Company has apparently been experiencing financial difficulties, and had to lay off about half of its staff. People left the company with boxes late on Friday. The company says that its assets have been purchased by a “newly formed company with substantial funding”.

The news came as a shock to the web industry as OnLive was seen has the natural evolution of video games, and many were expecting high end game consoles to to be eventually replaced by cheap boxes connected to the network. That explains the recent noise about Ouya, a $99 Android console, which has raised 6 million of dollars in funding.

The demise of OnLive is a stark reminder that the video game streaming business is an extremely challenging one, and that it is still experimental. That said, OnLive deserves some credit for pushing this as far as they did. So what happened? (more…)

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