OnLive sold assets, but will continue its services

Streaming gaming service OnLive has been on fire since yesterday. People were tweeting it was going down within the day, and that it was in a very bad financial situation, filing for bankruptcy.

Gamespot asked whether the company was shutting down entirely, and a representative answered “We don’t respond to rumors, but of course not.” Then, the rep went on to say that Vizio Co-Stars streaming media players that have OnLive built in are just now rolling out to customers, and the company is in the middle of a three-week indie game giveaway promotion.

Mashable then had reports that OnLive laid off its entire staff, with the company transitioning to a new phase, in which phase a high number of the staff could potentially be rehired. A report claimed that the new look OnLive received could be driven by intellectual property, and the numerous patents on cloud-based gaming.

Brian Fargo, kickstarted Wasteland 2′s developer and founder of Inxile, posted on Twitter that he had received an e-mail from an employee of OnLive, saying everyone had be laid off and the end of the day would not find the company existing. However, he later tweeted that he had a recall request on the same e-mail.

Later, an OnLive spokesperson confirmed to VentureBeat that the company’s assets were sold to another company, but assured the users they wouldn’t suffer from any service interuption or product rollouts, and the company plans to rehire a large percentage of its former employees.

We also remind you that Ouya was confirmed to have OnLive integrated, and if the company goes under, Kickstarter funders might be in an uproar. What’s your opinion on this?