HTC loses $40m in OnLive 'restructuring'

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
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.

Topics: Cloud

About

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't be paying many bills. His early journalistic career was spent in general news, working behind the scenes for BBC radio and on-air as a newsreader for independent stations. David's main focus is on communications, of both... Full Bio

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