OnLive under new management, will continue service

"The assets of OnLive have been acquired into a newly-formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive's apps and devices, as well as game, productivity and enterprise partnerships," the company said in a statement.

"The new company is hiring a large percentage of OnLive, Inc.'s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees. All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services," it said.

A company spokeswoman declined to provide more information to a small group of reporters outside the company's Palo Alto headquarters.

News of changes at the company came first on Friday morning when Brian Fargo of InXile Entertainment tweeted "Their employees are sending out emails that OnLive will be closed by the end of the day."

The tweet was quickly spread across the web and no information from OnLive was forthcoming.