Summary: OnLive's long-serving employees weren't the only ones to see their equity in the firm wiped out in its surprise rejigging - investor HTC also says it will have to book a $40m loss
HTC will have to book a $40m (£25m) loss due to its investment in the cloud gaming service OnLive, the Taiwanese handset-maker said on Monday.
Although it also has a sideline in hosted desktop delivery, OnLive is best-known for providing on-demand gaming through the cloud, allowing PC-quality games to be delivered to devices such as tablets and even smartphones.OnLive has a sideline in a hosted Windows desktop service for iPad and Android users. Image credit: OnLive
HTC bought into OnLive in February 2011, but now OnLive has applied for what it called 'asset restructuring', shortly after key competitor Gaikai got bought by Sony for $380m.
"Due to lack of operating cash and an inability to raise new capital, OnLive had completed asset restructuring over the weekend. HTC estimates that it will need to recognize a $40m [£25m] provision for this investment loss," an HTC statement read.
OnLive's restructuring has proven somewhat contentious, as it effectively destroyed the equity held in the company by long-serving employees and investors — including HTC.
The cloud gaming service was not the only iffy investment made by HTC in recent times. Last year it also ploughed $300m into the headphones outfit Beats Electronics, only to sell back half of that stake this July.