Perlman's "ego" key to decline of OnLive - report

Former employees describe cloud gaming company's struggles, and the role of its "genius" founder and CEO

A new report on the once ascendant cloud gaming service OnLive has placed responsibility for its struggles on founder Steve Perlman's "ego".

The Verge spoke to a number of the company's former employees, who describe in detail its decline following its widely discussed debut at San Francisco GDC in 2009.

The sources claim that, prior to its recent transition, OnLive never had more than 1600 concurrent users worldwide, with thousands of servers unused at any given time. The figures released by the company were 2.5 million users and 1.5 million MAUs, but they included anyone who had signed up for a free account or used their account in the last 12 months.

More importantly, very few of those people actually paid any money, taking advantage of the service's free game demos instead. Even a game like Homefront, one of OnLive's apparent success stories, sold in "the low thousands", and its PlayPack subscription service had only 12,000 subscribers.

"We had single-digit income a lot of days after launch," one former employee said.

While OnLive was arguably ahead of its time, with connectivity issues a constant problem in expanding its user-base and convincing publishers to sign deals, many employees have claimed that founder and CEO Steve Perlman sabotaged some potentially vital deals.

According to The Verge, Mass Effect 2 and Dragon Age: Origins were ready for the service's US launch. However, when the news that rival cloud gaming service Gaikai had signed a deal with EA arrived at the OnLive booth at E3 2010, Perlman was enraged - "He went ballistic. We had to slam the conference room shut and crank up the music so people wouldn't hear him."

Despite Gaikai only hosting demos of EA games, Perlman asked for exclusivity; when it was refused, he ordered that all EA games be pulled from the service. After that, any games hosted by Gaikai were off limits, even those that had already been prepared and tested for OnLive: deals for The Witcher 2, Bulletstorm and Ubisoft's games all fell apart.

The problems at OnLive became apparent earlier this month, when the company laid off its entire staff on grounds of bankruptcy. The company's IP and assets were then acquired by Gary Lauder, one of its investors, and OnLive returned as a new company. Initially, it seemed that Perlman would stay on as CEO, but he was replaced shortly after by the OnLive's head of operations, Charlie Jablonski.

The new OnLive claims that half of its former workforce has been re-employed, but The Verge claims that the actual number is closer to 60, with many of them on 30-day contracts. The sources also claimed that key departments have completely disappeared, including the team responsible for preparing new games for the service.

Related stories

OnLive shutting down, Sony snaps up patents

Service will end on April 30, latest subscriptions to be refunded

By Rachel Weber

OnLive expands to Benelux territories

"A highly active and well-connected gaming audience"

By Rachel Weber

Latest comments (8)

gi biz ;, 5 years ago
Incredible. All of this has happened and I still have to see any of those two services working on my machines. Those 1600 users must be the lucky ones for which the website behaved nicely.
0Sign inorRegisterto rate and reply
Nicholas Pantazis Senior Editor, VGChartz Ltd5 years ago
Agreed Michele. I almost never used Onlive, despite everything on the service being free for me through my press account. It just... didn't work. So much lag, such poor visuals. I was constantly frustrated when playing it.
0Sign inorRegisterto rate and reply
Kevin Patterson musician 5 years ago
I wanted to love Onlive but the actual game experience was lacking due to the visuals and laggy controls. Gaikai for some reason had better visuals and lag, but launching the game from a browser I didn't like as much.

I was impressed with it's interface, and the ability to watch others play games. The interesting thing is that while the arena was a neat idea, most players seem to hate being watched. I would join someones game and within 10 to 15 minutes they would quit, pause, or turn off the sharing feature (im guessing, the game would just end). Adding the ability to cheer was nice, but the jeer or thumbs down ability was not a good idea. I would log into to a game, and there were always more jeers than cheers, and who wants to be judged by how you play a single player game? I enjoyed the IPad app, watching games on it was a neat feature.
I liked the game clip idea too.

I myself felt a bit weird when someone would join my game. I think if they made the game watching anonymous, took out the jeering, it would be better. The lack of games on the service was a huge disappointment, per the article im surprised that Perlman would allow ego to interfere with business.
0Sign inorRegisterto rate and reply
Show all comments (8)
Adam Campbell Game Production Manager, Azoomee5 years ago
Maybe so and I could have assumed just as much. However, OnLive wouldn't exist without him. I guess the reshuffle of power at the top was quite important to give the company a decent chance going forward. Ambition is a wonderful thing but over ambition can be a killer and obviously was for the 'previous' OnLive.
0Sign inorRegisterto rate and reply
Alfonso Sexto Lead Tester, Ubisoft Germany5 years ago
In the company where I was previously working (Won't say the name) we had one of those guys that guided himself exclusively by personal factors, just like this guy.

By cold and cruel experience I can tell you how a single person can destroy the morale of 5 amazing testing teams.

People like him only hurt other workers, hope I won't meet him in the future...
0Sign inorRegisterto rate and reply
Peter Dwyer Games Designer/Developer 5 years ago

Yes it's certainly the egos that end up costing companies the millions in losses or the good staff to leave in disgust. I've been in one of those companies too and it's not pleasant. Luckily I was merely contracting and could left by simply refusing to renew my rolling contract at the end of the initial three months. I also didn't need to lie about my reasons for leaving and bluntly explained that the egos and office politics was going to bring the place down around their ears. I was proved right some 6 months later when the company in question shuttered it's doors.

It's not a happy thing to have happen.
0Sign inorRegisterto rate and reply
Fran Mulhern , Recruit3D5 years ago
An ego in video games? Haven't heard that one before!
0Sign inorRegisterto rate and reply
Bernard Parker Studying game design, Full Sail University5 years ago
The service is brilliant! that said, perhaps Perlman should stick to development and leave management and PR to people with...common sense.
0Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.