Tony Wolverton for MercuryNews.com:

The company owed $30 million to $40 million to various creditors and had little money to pay them. It had failed to find a buyer despite shopping itself around and was facing a complete shutdown of its services, said Joel Weinberg, CEO of Insolvency Services Group.

OnLive is the video game service that enables you to stream popular PC games to your Mac or PC over the Internet, or to your TV using a small settop box.

OnLive made headlines last week when its assets were abruptly sold to a newly formed company (also called OnLive) and many employees were terminated. The service continues for customers, however.

The CEO of a firm tasked with paying some of OnLive’s old debts explained that OnLive “had only days to live” because of cashflow and credit issues.

OnLive emerged as one of the highest profile “cloud gaming” services, which enable people to play games without actually buying them and downloading them – paying a monthly subscription fee instead.