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The Unraveling of OnLiveAn interesting read about how an interesting technology company could not make a profit. Note the theme we've discussed before -- completely fantastical ginned-up grossly inflated membership/customer numbers, designed to create a false sense of momentum and source of profit, and a giant pile of cash being burned through at an astronomical rate.
The problem was simple. OnLive never made any money, and it was burning through as much as $5 million a month. As Perlman himself explained during the fateful all-hands meeting, the company had deployed thousands of servers that were sitting unused, and only ever had 1,600 concurrent users of the service worldwide. Over the past week, OnLive has tried to distance itself from that 1,600 number, but every former employee we spoke to in a position to know told us that it was true. "We were so optimistic at launch, but the users never came," one long-time staffer said. "There were all these reasons why we were going to be an instant success, but it didn't succeed instantly." Even if the users had come, though, some employees dispute whether the service could scale: OnLive needed a physical machine for each concurrent player, and though Steve continually pressed the team to figure out a method to virtualize the load, the current model might have been untenable.. Officially, the company states it has 2.5 million users, and 1.5 million active users, but staffers tell us those numbers count every single person who ever signed up for a free account, or tried it in the last year. The other thing you need to understand is that many of those users never paid a dime. http://mobile.thever...274739/onlive-report |
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