HTC out $40 Million it can’t afford to lose thanks to OnLive

HTC was once a leading manufacturer in the smartphone world. You could hardly go anywhere without seeing a HTC device in someones hands who needed to be connected beyond a flip phone. I know I personally owned a T-Mobile Wing, Dash, G1 and myTouch. It sure didn’t take long for Samsung to step in and take over in a big way. It is no secret the HTC has been struggling for a while now. They still make beautiful and well constructed devices, but they just can’t seem to grab the attention of the world enough to start putting major bucks in their pockets.

Now we have some more bad news for HTC fans. Looks like they will be at a loss of $40 million thanks to OnLive and their issues. OnLive, which many of you know as the streaming video game service, offered up some bad news on Friday. Since the in-house costs out weighed incoming profits, it wasn’t able to keep going. At any given time they were only seeing around 2,000 years online using it a day. Those of you that use it, don’t fret, the service is still up and running. CEO Steve Perlman opted for what is known as  “assignment for benefit of creditors” or ABC. Which lets the service stay up and running until a new owner takes over. All employees essentially lost their jobs and all stocks were deemed worthless.

This isn’t the end though. There is a new owner lined up. While who it is wasn’t announced, Perlman said he was an “extraordinary, very accomplished and well-known VC.” A chunk of the employees will be getting their jobs back later, but only those that were essential in making the service work and operate.

So what happened that turned what seemed to be a phenomenal service to a flop? We don’t know the whole story. We know that OnLive planned for large numbers of users and build 8,000 services to handle the traffic. We know there is a huge selection of games available to play. If we had to speculate on why the populace hasn’t taken hold of the service we would say it has a lot to do with the devices. Not everyone has a supported device at their disposal, a Bluetooth or wire controller, or the time nor the money to pay to sit and play games. We think the new OUYA devices will make a pretty big impact, but as for right this minute, there isn’t much around that will play with out lag to our big screen TV’s. While the service is neat and all, why should I pay a few to play games when I can use Splashtop and stream a game off my PC to my TV for FREE after I buy the app?

What are your thoughts? Anyone out there dig a little deeper and wish to offer some insight? No matter the fate of OnLive, this $40 Million in investment loss for HTC sure isn’t good for them at all.

Source: Androidguys and Computerworld