In an email sent out to users of the service, OnLive said that Sony is acquiring key parts of OnLive and has no plans to continue the service in its current form:
After five years of uninterrupted service, the OnLive Game Service will be coming to an end. Sony is acquiring important parts of OnLive, and their plans don't include a continuation of the game service in its current form. Your service should continue uninterrupted until April 30, 2015. No further subscription fees will be charged, and you can continue to play all of your games until that date.
OnLive, which originally launched its cloud gaming service in 2010, has faced a number of financial challenges over the years. In August of 2012, the company went through a restructuring and was sold to investment firm Lauder Partners after financial difficulties.
Sony's purchase of the company is likely driven by OnLive's patent portfolio. The company recently launched a cloud gaming service called PS Now for its Playstation 4 console, which gives players access to a large back-catalog of games from the Playstation 3 and is based off of technology from former OnLive rival Gaikai, which Sony acquired in 2012.