Game streaming company OnLive has been sold to an unknown party and all employees have lost their jobs, the company has confirmed.

OnLive chief executive Steve Perlman announced the sale and job losses following a day of speculation that began after an OnLive employee sent anonymous emails about the cuts to several industry publications.

The company’s services would continue to operate during the takeover, and the new company was backed “by substantial funding”, said Perlman.

Around 150-200 employees lost their jobs, but OnLive’s new owner was “hiring a large percentage of OnLive, Inc.’s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees,” Perlman continued.

A former OnLive employee who gave an interview under the condition of anonymity said that the number of staff retained by the new owner was minimal—"around 20".

"Anybody keeping score within the company knew that money was getting tight…budgets had been slashed,” the source said.

Those who had lost their jobs did not receive any type of severance, and contributions employees made to a Federal Savings Accounts may be lost.

"A lot of my colleagues put money in the FSA for child care, health care, whatever…they did not have an answer for us, but it sounds like the person that makes the most noise will get reimbursed."

The meeting where news of the job losses as announced was “surreal”, said the source.

“I think because nobody knew how to react, everybody clapped. It was bizarre... because you're clapping to thank him for taking the easy route out of the company. I think it was because everybody was in such shock that they just didn't know what to do.”

OnLive was launched in 2009, promising cloud-streaming of video games to consoles and PCs.

Most recently, the company announced a partnership with the Ouya.