38 Studios quickly degrading situation

[solidsnakejej]

That is Kingdom of Amalur developer not 38 studios as in number of studios

With Rhode Island politicians and 38 Studios silent on the precarious financial condition of the developer, the potential cost of the doomsday scenario to taxpayers has come to light. WPRI reports that if 38 Studios can't pay the bonds it received from the state, taxpayers will actually be responsible for paying back $112.6 million through 2020.

The math works a little something this this: The Rhode Island Economic Development Corporation borrowed $75 million from private investors for 38 Studios, at interest rates between 6 - 7.75 percent, with the expectation that 38 Studios would pay it back with the sale of games.

For the record, 38 Studios has only launched one product, Kingdoms of Amalur: Reckoning, which it only had due to its acquisition of developer Big Huge Games. Big Huge Games was already working on an RPG prior to the sale, but altered it to fit the Amalur world after the purchase.

If 38 Studios can't pay, the governor is required to ask the General Assembly to repay bondholders.

Game industry sources tell Joystiq that if 38 Studios does collapse, despite this specific deal having been widely criticized from the start, it could have wider repercussions for the industry trying to obtain tax breaks in other states. The silence out of Providence right now is deafening.

http://www.joystiq.com/2012/05/15/if...e-112-6-milli/

[Coded-Dude]

ouch.

[AC!D]

Sacre bleu!

[Viper]

Let me get this straight.

Rhode Island (all of a 1.051 million population) gave up $75 million in incentives for a 450 man operation? That's $166k per job. That's twice as high as their average wage. At standard tax rates, it would take RI almost 7 years to get that money back which nearly twice as long as the development span of the game anyway.

Someone failed Econ 101.


And that puts about $71 per RI resident on the hook. Or about $227 per tax payer.

[Segitz]

Let me get this straight.

Rhode Island (all of a 1.051 million population) gave up $75 million in incentives for a 450 man operation? That's $166k per job. That's twice as high as their average wage. At standard tax rates, it would take RI almost 7 years to get that money back which nearly twice as long as the development span of the game anyway.

Someone failed Econ 101.


And that puts about $71 per RI resident on the hook. Or about $227 per tax payer.

And someone calculates wages like a milk maiden, too...

[solidsnakejej]

After not paying $1.125 million payment, 38 studio went to the Rhode Island Governor to ask for more money.

The RIEDC Board of Directors met in closed session to receive a presentation from representatives of 38 Studios as to the company's confidential financial status and projections. Members of the Board asked many probing questions of the company. After representatives from 38 Studios concluded their presentation, the Board then engaged in extended discussion of confidential financial information. The Board did not take any vote. The company still has the option to cure the existing default by paying the $1,125,000 guaranty fee that is past due. In the meantime, we will continue to talk with 38 Studios and develop additional information, and will resume the Board meeting at our regularly scheduled meeting on May 21. The members of the Board may not discuss the confidential information received and discussed today.

http://www.giantbomb.com/news/38-stu...re-money/4153/

[Segitz]

If the numbers at VGC are indeed correct, then it's not a real wonder that they are in trouble, considering Kingdoms of Amalur barely sold a million copies.

[solidsnakejej]

God damn

[Viper]

This whole thing was fucked up from day 1.


Anybody that looked at the numbers can see that.

[solidsnakejej]

They have decided to pay the loan payment instead of paying this weeks payroll for the employees

The situation at 38 Studios is getting worse. The studio is reportedly paying the overdue $1.25 million it owes the R.I. Economic Development Corporation, but did not make payroll this week.

Judy Chong, a spokesperson for the EDC, confirmed the news to WPRI today. 38 Studios employed 379 full-time employees as of March 15, including 288 in Rhode Island, the report says.

Owner Curt Schilling met with state officials earlier this week to seek additional help. No decision was made. The parties will meet again on Monday.

And then their check for that payment bounced:

Update: The check 38 Studios hand delivered to the state bounced this afternoon, said EDC chief financial officer Rick Wester. According to WPRI, the EDC will still accept the overdue $1.125 million payment if 38 Studios can find a way to come up with the money.

http://www.gameinformer.com/b/news/a...e-payroll.aspx

---------- Post added at 08:07 PM ---------- Previous post was at 07:00 PM ----------

Curt Shilling and CEO Jennifer MacLean have been removed from 38 Studios site
http://38studios.com/people/visionaries

[Segitz]

Schilling's back on the "visionaries" page (god I hate that word in this context).

[solidsnakejej]

They were able to pay off the 1.125 million and it seems it will launch June of next year. They have also release flyover footage which looks pretty good.

[Segitz]

Looks good, but an MMO is not something I want to play anymore.

Thing with the studio is, that they (according to GB) have to pay another 2.x mil later this year... Other than getting private investors, they have no chance to pay this, if they already had problems to pay this amount.

[solidsnakejej]

Making it a general thread, Employees haven't been payed since May 1st and their health care will end in just over 26 hours from now.

38 Studios employees have not been paid since May 1 and their health care will end Thursday at midnight, a source with knowledge of the situation tells Joystiq. Employees are normally paid on the first and 15th of each month.

When asked if the studio would be shutting down this week, the source could only say, "Unknown at this time. Outlook is not good."

We're informed that 38 Studios' MMO, "Project Copernicus," announced by Rhode Island Gov. Lincoln Chafee as launching in June 2013, did have that date as its internal target. However, "Whether this is realistic or not is up for debate."

Gov. Chafee said in a press conference today that he would do what he could to prevent the studio from shutting down. Will the studio still exist within a month? "I have no idea," our source replied.

http://www.joystiq.com/2012/05/23/38...d-since-may-1/

[D3adcell]

The game was published by EA, why didn't they try to get EA to foot the bill instead of going to the governor?

[Viper]

The game was published by EA, why didn't they try to get EA to foot the bill instead of going to the governor?

Because using public incentives was the reason they moved from Mass to RI. The contract they signed with EA probably didn't require publisher funding because of the incentives (which is probably why EA signed the contract to begin with).

[solidsnakejej]

CEO and Senior VP Jen MacLean steps down


---------- Post added 05-24-2012 at 12:19 AM ---------- Previous post was 05-23-2012 at 10:41 PM ----------

38 isn't dead yet.

Amalur is worth fighting for. Spread the fire.

http://www.38watch.com/forums/showth...s-deserve-this

[Coded-Dude]

Its all over but the crying.......

Curt Schilling's 38 Studios laid off all of their employees today, shutting down both their Rhode Island office and Maryland-based subsidiary Big Huge Games, a source familiar with the company tells Polygon.

The news came as a surprise to nearly everyone involved, including the state of Rhode Island and Governor Lincoln Chafee who during an afternoon press conference said that as of this morning they hadn't heard a word about possible layoffs or a closure.

The studio's financial turmoil first came to light earlier this month when they first missed and then later made a $1.125 million check to the state of Rhode Island.

Earlier this week Rhode Island governor Lincoln Chafee told reporters that they state's Economic Development Corporation had met with the studio to discuss payroll issues and layoffs.

Official confirmation is slow in coming, likely due to the complete closure of the company, but at least one former employee of Big Huge Games, a subsidiary of 38 Studios, took to Twitter to lament the company's passing.

"Big Huge Games was home for my wife and me for our adult lives so far," wrote Colin Campbell, lead world designer at Big Huge Games. "I'll miss it terribly, but so proud. Good night and good luck."

source - full article

[solidsnakejej]

It's not all over, it's just starting. It's gonna be interesting to see the repercussions to this.

[Viper]

The news came as a surprise to nearly everyone involved,

Bullshit. The proverbial writing was on the wall for the past week or so.