Published: Aug 20, 2012 4:20 PM EDT
Updated: Aug 21, 2012 6:30 AM EDT

NEW YORK (AP) - OnLive, the video game streaming service that was full of promise when it started three years ago, has reorganized its business and cut its staff.

Analysts say OnLive was spending too much money and didn't have enough paying users.

OnLive says it went through a complex bankruptcy alternative last week. The process allows it to continue operating. On Friday, its assets were acquired by a newly created company, also called OnLive. One of the old OnLive's early investors, Lauder Partners, is the first investor in the new OnLive.

But employee stock options and investments from outsiders are now worthless. Its other investors included AT&T Inc. and Warner Bros.

OnLive says about half of its staff of 200 were offered jobs at the new company and more may get offers.