OnLive Closing Down, Reborn as OnLive?

Rumors have been circulating most of the day that cloud gaming service OnLive was going into bankruptcy, but it appears the truth may indeed be stranger than fiction.

Through out the day there have been rumors that have ranged from all of the employees of OnLive being let go to the company going into bankruptcy protection. Up until now the company was very vague as to what was happening except to say that the gaming service was not shutting down.

The company has finally released a statement that still is somewhat vague, but does confirm that it has been purchased by a newly-formed company and will have “substantial funding.” It did confirm that some employees were let go, but it did not state how many people exactly were impacted.

OnLive says that its gaming service will continue to operate and that all announced projects, such as the one with OUYA, will continue as originally announced.

There are sure to be some more shake outs from this very suddenly announced deal, but for now it appears that if you use OnLive that you will ce able to continue doing so.