RECOMMENDED READING: The story behind Perlman’s OnLive

The collapse of cloud gaming company OnLive is more than simply a tale of over-reaching ambition – it’s also the tale of one man losing his grip on his company.

That’s according to a remarkable new report from US site Polygon, which MCV thoroughly recommends for anyone with an interest in the dramatic fall from grace for one of gaming’s biggest names.

The piece details every aspect of OnLive’s journey. And it’s more complicated than it might appear.

Yes, the service was leaking in the region of $5m a month and had a maximum of 1,600 concurrent users worldwide. "We were so optimistic at launch, but the users never came," a former employee stated. "There were all these reasons why we were going to be an instant success, but it didn’t succeed instantly.

"We had single-digit income a lot of days after launch."

Even its biggest successes, like THQ’s Homefront, sold in the low thousands” and its PlayPack bundle attracted just 12,000 subscribers. And it was also taking a loss on each $99 microconsole that it sold.

It’s biggest failing, however, was the inability to get the two big boys on board – EA and Activision. Negotiations with Bethesda and Valve also collapsed. The ridiculous thing is that EA was on board, with both Mass Effect 2 and Dragon Age: Origins ready to go.

That’s when Perlman’s supposed ego got in the way.

At GDC 2009 the OnLive boss was infuriated by Gaikai’s behind-closed-doors reveal, resulting in a shouting match with Gaikai boss David Perry. And when Gaikai revealed a multi-year deal with EA, Perlman went ballistic”, demanding that EA pen an exclusive deal with his company. When it refused, Perlman ordered that all EA titles be pulled from OnLive.

This began a new trend – any game that appeared on Gaikai first was banned from Perlman’s service, including CD Projekt’s hit RPG The Witcher 2.

Even EA shooter Bulletstorm was lined up and ready to go and was regarded internally as a peace offering. Then Gaikai introduced a Bulletstorm web demo and Perlman once again pulled the plug.

Polygon’s piece is a fantastic read and well worth dedicating your lunch break to – check it out here.

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