Streaming video game service OnLive laid off most of its staff and sold itself to an unnamed buyer late Friday, in what appears to be a move to keep the service from going out of business.

It's a startling turn of events for the three-year-old OnLive, whose ideas for on-demand video game content were once viewed as a possible future blueprint for the entire industry.

While OnLive did not file for bankruptcy, the wording of the company's announcement -- saying it had been acquired into "newly-formed company" and "backed by substantial funding" -- indicated that OnLive was struggling to stay in business as a stand-alone company.