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OnLive's Woes Caused By One Man's Ego

It seems a company with a great premise and fantastic ideas can truly be laid low by a single person. That's the case of OnLive, the darling game streaming service which we reported on earlier was dissolved and its assets purchased by Lauder Partners. It seems that this could have been avoided had the ego of CEO Steve Perlman been kept in check. During the 2009 Game Developer's Conference in San Francisco, Perlman started screaming at Gaikai CEO David Perry, who came by to see his competitor. When Onlive launched on June 17th 2010, Gaikai announced a deal with Electronic Arts - and a multi-year one to boot. Now, EA had already been on board with OnLive with Mass Effect 2 and Dragon Age: Origins ready to launch, but Perlman's reaction to the Gaikai deal and his demands for EA exclusivity caused problems. EA ended up denying him exclusivity, so he pulled all their games from the service at the last minute. Add to this the fact that any game which ended up on Gaikai had its plug pulled from OnLive even after testing, compatibility etc you can see why the company was hemorrhaging $5 million a month with a user base of just 1600 subscribers.

It gets worse however, as The Witcher 2 was slated to make an appearance via OnLive, but with Gaikai receiving it first it was pulled. Then the same thing happened with Bulletstorm. OnLive got the game, but Gaikai had a web demo, so again the game was pulled. Then, add in the fact that Perlman had supposedly scared off Valve with a broad pitch, when Valve had just wanted to test it out since things were looking a bit dicey. Then, we have Ubisoft who refused to drop demos from Gaikai resulting in Perlman threatening to end their business relationship. Even talks with Bethesda failed because OnLive wasn't willing, or more likely unable, to pay a fee to offset onboard costs of their titles. Without some give and take and the ability to play nice with competitors OnLive was losing access to many AAA titles. With the above issues of attracting and keeping game developers and publishers onboard, along with the alienation of his own staff, Perlman and OnLive were in trouble. One ex-staff member said, "He would tell people they were stupid in front of the entire office". Then of course, there is the fact that Perlman wanted to control almost every aspect of the company right down to press releases. Once you add up all these problems it eventually became a problem far too big to solve. In the end, the poster child for streaming games isn't the tech darling it once was and with its failure, it could be a very long time before companies are willing to re-invest. In the meantime it remains to be seen how the company will do without Steve Perlman at the helm. Further coverage and information can be found at the source below.

The question is what happens now. The new OnLive says it hired nearly half the staff back and intends to continue the business as if nothing happens, but employees dispute that, stating that only around 60 employees got rehired, and a number of them only on 30-day contracts. Sources tell us that critical departments got scuttled, including the teams responsible for onboarding new games. It seemed like the company brought on a skeleton crew to keep the ship running while it preps the company for a sale. Then, something strange occurred. Employees convinced the new owner, Lauder Partners, to let Steve Perlman go and put employee-friendly former head of operations Charlie Jablonski in charge.

The Verge

Posted by | Thu, Aug 30, 2012 - 11:39 AM

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