OnLive reportedly shutting down, new company forming in its wake (update: OnLive says 'of course not')

Well, here's a bit of a shocker. After a strong showing at E3 and partnerships with companies like OUYA, gaming service OnLive is reportedly closing down, with an entire staff layoff resulting. Polygon is reporting the story as relayed to the site by game developer Brian Fargo. We've reached out to the company and received a non-comment comment, "We don't respond to rumors and have no comment." Our OnLive contact also used opportunity to plug its Google TV tie-ins and few giveaways -- so, for the moment at least, things seem to be moving along as usual.

Update: Joystiq has reached out for comment as well, getting a similar, yet decidedly more blunt response: "We don't respond to rumors, but of course not." Blunt response or no, we're sure this isn't the last we'll be hearing about this one.

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OnLive reportedly shutting down, new company forming in its wake (update: OnLive says 'of course not') originally appeared on Engadget on Fri, 17 Aug 2012 15:14:00 EDT. Please see our terms for use of feeds.