Rumors are circulating about the closure of OnLive. We reached out to the company to ask them if the business was, in fact, closing. We received this response:

Thanks for the note. We don’t respond to rumors, but of course not.

The exciting news is that the first VIZIO Co-Stars (Google TV stream players) with the OnLive app built-in have just arrived in customer homes, and our second of three ‘Indie Giveaway Weekends’ is going on now. OnLive users can get a free copy of the award-winning games Space Pirates and Zombies and SpaceChem (more details on our blog here: blog.onlive.com).

Update #1: Since posting this story, other outlets have reported that anonymous insiders have shared that all employees have been dismissed, effective immediately. We reached out again to OnLive for clarification and, as of yet, have received no response.

Update #2: Engadget is reporting that OnLive has been purchased, and the new company has offered approximately 50% of the employees have received offers from the buyer. If true, this would explain the 100% layoff rumors initially circulating. Technically, all of those people were laid off from OnLive, with a portion get hired on by a new employer. Additionally, Engadget reports that no severance was offered and that, due to the buyout, stock holdings are worthless. The full report can be found here.