Video game streaming pioneer OnLive is to shut down after selling several of its patents to Sony.
The California-based firm had allowed PC and tablet owners to play console titles, which were run on its computer servers but controlled and viewed in the gamer’s home.
Sony is expected to use the 140 patents it has acquired to support its own PlayStation Now streaming service.
OnLive was once valued at $1.8bn (£1.2bn).
The terms of the deal have not been disclosed.
It brings to an end a troubled five years of service.
In 2012, many of OnLive’s staff lost their jobs when the company was sold to a venture capital firm after running up about $40m in debt.
Several of the biggest publishers had refused to support it, although the business had proven that gaming was possible without too much delay between a user pressing a gamepad button and their character responding.
Interest was also limited by the fact users needed a relatively fast broadband connection.
In addition, many PC owners seemed to prefer buying games from Steam and other online marketplaces, rather than paying a monthly subscription fee for a Netflix-like “all-you-can-eat” experience.
In March 2014, the company announced a new direction with the launch of CloudLift, a facility that let gamers stream and play select titles they had bought from Steam on mobile devices, TVs and other computers.
But things did not bode well when it cut the price from $14.99 to $7.95 just a month later.
“It is with great sadness that we must bring the OnLive Game Service to a close,” a message posted to the company’s site now says.
“Sony is acquiring important parts of OnLive, and their plans don’t include a continuation of the game service in its current form.
“As the first-ever game streaming service of its kind, everyone who has ever played a game using OnLive has contributed to the technology and its evolution in some way.
“We’re immensely proud of what’s been achieved and extend our heartfelt gratitude to you for being a part of the OnLive Game Service.”
The firm added that it would not be offering any refunds for related hardware purchases, unless they were made after 1 February.
Cloud gaming survives
Although OnLive will cease to exist, streamed video game services look set to thrive.
Sony offers PlayStation Now, which provides ongoing access to more than 100 PS3 games for a monthly fee as well as the ability to rent specific titles for limited amounts of time.
Until recently the service only worked with Sony’s own video game consoles and TVs in the US and Canada. However, it has recently been extended to a select group of UK players as well.
The Japanese firm also plans to add Samsung’s smart TVs to its list of supported devices later this year.
In addition, chipmaker Nvidia streams a library of PC games to its Android-powered Shield handhelds across the globe via a service called Grid. It has said it plans to extend this to a new living-room console in May.