Rumour: OnLive Will Be Shut Down By The End Of The Day

[Update] The rumour surrounding OnLive’s closure has been officially rebutted and appears to be incorrect. However, the same dismissal can not yet be made of the layoffs which, if anything, are looking all the more likely.

OnLive, the cloud-based game streaming service that went from an almost universally doubted dream to an impressive reality, is now rumoured to be closing down. Every member of staff have apparently been let go, and there are tweets and emails circulating to that effect.

Whilst no official confirmation concerning the closure of the service has surfaced, Brian Fargo of inXile Enterainment – who  many will know from the Wasteland 2 kickstarter – has taken to Twitter to reveal some details about emails that he has recieved about the suspension of the service:

“Their employees are sending out emails that #OnLive will be closed by the end of the day.”

In addition to this, he has now Tweeted the contents of the email he received:

“I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone else’s was included. A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service.”

There are no official signs that the service has stopped, and OnLive‘s director of corporate communications has refuted this claim when approached by Joystiq stating that: “We don’t respond to rumors, but of course not.”

However, the service coming to an end and the staff being may redundant may be two entirely different things, and no official comment has been made regarding the redundancies apart from the reiteration that “the OnLive service is not shutting down.”

This avoidance, when combined with both Mashable and GameFront claiming that reliable sources have confirmed that all but a few of those in upper management have been let go since 10AM Pacific Time this morning, seems to suggest that whilst the service hasn’t been cancelled the staff have indeed been struck off.