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There's rightfully a fair amount of noise being made about this as many on HN can imagine themselves in a similar situation. But there may be another lesson to

by casca 14y ago

There's rightfully a fair amount of noise being made about this as many on HN can imagine themselves in a similar situation. But there may be another lesson to take here. For me, the key phrase in this article is the first one: "Faced with a dire financial situation...". The nature of working for a startup where you trade current income for potentially huge future income implies a level of risk. Looking at the breathless press coverage, it's easy to imagine that most startups are a raging success. The truth is that most will be in a "dire financial situation" and have no choice but to perform some juggling if there's any chance that they'll stay in business. It's quite possible that the owners were deliberately trying to screw the employees, but more likely is that it's a desperate move by desperate management who are trying to salvage their dream.

phillmv 14y ago
Why was it in a dire financial situation if it had millions of subscribers? I can't find any descriptions of the cause of the crap finances, especially with millions of subscribers. A likely scenario seems possible: their financiers/vcs decided they didn't like the direction the company was taking/unhappy with growth and called in their loans and forced everyone out. Everyone, except the vcs, takes a haircut. (Was there a more straightforward reason?)
- wmf 14y ago
  There was a rumor about 8,000 servers with only 1,600 simultaneous users; in other words an out-of-control burn rate.
  - fjarlq 14y ago
    That rumor was reportedly a rhetorical question asked by Perlman during the last company meeting. Anybody know why they didn't use a flexible virtual server solution like Amazon EC2? "There's no way to exactly estimate how many servers we'd need. So we literally bought thousands of them, and all the equipment and networks to go with it," Perlman told employees. Those servers, he said, came with lengthy contracts -- contracts that tied OnLive's capital up in maintaining servers that few (if any) users were actually using. "If you've got 8,000 servers and 1,600 users, how could we ever get to cash flow positive, right?" -- http://www.joystiq.com/2012/08/18/documenting-the-death-of-onlive-notes-from-the-companys-final/ http://www.joystiq.com/2012/08/18/documenting-the-death-of-o...
    - phillmv 14y ago
      There are EC2 instances with beefy consumer graphics cards? (How do the GPU clusters even work? And, at $2 it seems way more expensive.)
      - mbreese 14y ago
        Kinda... there are GPU instances, but they are targetted towards GPU cluster computing for HPC applications. I suspect that GPU clusters work largely the same way that generic/CPU clusters work. You have a cluster manager that dishes jobs out to the worker nodes. The common HPC job scheduler that we use (Torque/PBS) includes support for scheduling jobs that require GPU access. (I assume SGE does as well). Cluster GPU Quadruple Extra Large Instance 22 GB of memory 33.5 EC2 Compute Units (2 x Intel Xeon X5570, quad-core “Nehalem” architecture) 2 x NVIDIA Tesla “Fermi” M2050 GPUs 1690 GB of instance storage 64-bit platform I/O Performance: Very High (10 Gigabit Ethernet) EBS-Optimized Available: No* API name: cg1.4xlarge
    - wmf 14y ago
      I suspect EC2 is not good for games, since the only GPU they offer is pretty high-end. Also, I think OnLive has more data centers than EC2 to reduce latency.
    - newhouseb 14y ago
      As the other guys here have mentioned, they basically need CDN-level latency virtually everywhere for OnLive to properly work and while Amazon does have a CDN (Cloud Front), their normal datacenters only have a few regions within the United States (which aren't close to any major metropolitan hubs (except maybe DC)). The other big thing is that GPUs have very limited scheduling (i.e. no pre-emptive multitasking), so it's virtually impossible to virtualize into multiple VMs efficiently. So when you get a GPU machine you end up with isolated hardware which doesn't share the same economics as other Amazon solutions. As GPGPU become more popular, this should, however, improve.
      - tmurray 14y ago
- duskwuff 14y ago
  Millions of paid subscribers or millions of (mostly free) accounts? I suspect the latter is closer to the truth.
- w0utert 14y ago
  > Why was it in a dire financial situation if it had millions of subscribers? I've said it from the very first beginning (and got flamed for it), but IMO the business case for cloud gaming is simply very weak. If there is one at all. It requires highly specialized data centers everywhere around the world to work, and to cover the expenses you need to charge people as much or more as they would have to simply buy the hardware and games directly, and have a better game experience. Hardware is getting cheaper and more powerful all the time, so you have to wonder why anyone should be surprised building data centers everywhere in the hope that people will pay to use them to play games, is not a very solid way to make money.

by casca 14y ago

phillmv 14y ago

Why was it in a dire financial situation if it had millions of subscribers? I can't find any descriptions of the cause of the crap finances, especially with millions of subscribers. A likely scenario seems possible: their financiers/vcs decided they didn't like the direction the company was taking/unhappy with growth and called in their loans and forced everyone out. Everyone, except the vcs, takes a haircut. (Was there a more straightforward reason?)

wmf 14y ago
There was a rumor about 8,000 servers with only 1,600 simultaneous users; in other words an out-of-control burn rate.
- fjarlq 14y ago
  That rumor was reportedly a rhetorical question asked by Perlman during the last company meeting. Anybody know why they didn't use a flexible virtual server solution like Amazon EC2? "There's no way to exactly estimate how many servers we'd need. So we literally bought thousands of them, and all the equipment and networks to go with it," Perlman told employees. Those servers, he said, came with lengthy contracts -- contracts that tied OnLive's capital up in maintaining servers that few (if any) users were actually using. "If you've got 8,000 servers and 1,600 users, how could we ever get to cash flow positive, right?" -- http://www.joystiq.com/2012/08/18/documenting-the-death-of-onlive-notes-from-the-companys-final/ http://www.joystiq.com/2012/08/18/documenting-the-death-of-o...
  - phillmv 14y ago
    There are EC2 instances with beefy consumer graphics cards? (How do the GPU clusters even work? And, at $2 it seems way more expensive.)
    - mbreese 14y ago
      Kinda... there are GPU instances, but they are targetted towards GPU cluster computing for HPC applications. I suspect that GPU clusters work largely the same way that generic/CPU clusters work. You have a cluster manager that dishes jobs out to the worker nodes. The common HPC job scheduler that we use (Torque/PBS) includes support for scheduling jobs that require GPU access. (I assume SGE does as well). Cluster GPU Quadruple Extra Large Instance 22 GB of memory 33.5 EC2 Compute Units (2 x Intel Xeon X5570, quad-core “Nehalem” architecture) 2 x NVIDIA Tesla “Fermi” M2050 GPUs 1690 GB of instance storage 64-bit platform I/O Performance: Very High (10 Gigabit Ethernet) EBS-Optimized Available: No* API name: cg1.4xlarge
  - wmf 14y ago
    I suspect EC2 is not good for games, since the only GPU they offer is pretty high-end. Also, I think OnLive has more data centers than EC2 to reduce latency.
  - newhouseb 14y ago
    As the other guys here have mentioned, they basically need CDN-level latency virtually everywhere for OnLive to properly work and while Amazon does have a CDN (Cloud Front), their normal datacenters only have a few regions within the United States (which aren't close to any major metropolitan hubs (except maybe DC)). The other big thing is that GPUs have very limited scheduling (i.e. no pre-emptive multitasking), so it's virtually impossible to virtualize into multiple VMs efficiently. So when you get a GPU machine you end up with isolated hardware which doesn't share the same economics as other Amazon solutions. As GPGPU become more popular, this should, however, improve.
    - tmurray 14y ago
duskwuff 14y ago
Millions of paid subscribers or millions of (mostly free) accounts? I suspect the latter is closer to the truth.
w0utert 14y ago
> Why was it in a dire financial situation if it had millions of subscribers? I've said it from the very first beginning (and got flamed for it), but IMO the business case for cloud gaming is simply very weak. If there is one at all. It requires highly specialized data centers everywhere around the world to work, and to cover the expenses you need to charge people as much or more as they would have to simply buy the hardware and games directly, and have a better game experience. Hardware is getting cheaper and more powerful all the time, so you have to wonder why anyone should be surprised building data centers everywhere in the hope that people will pay to use them to play games, is not a very solid way to make money.