38 studios close to bankruptcy

They paid R. A. Salvatore $1.5 million dollars for the story, and I assume Todd McFarlane got similar amount for the design. That 3 million is for the company to stay afloat. KoA by itself probably been okay without the other stuff.
 
3 million in sales was to keep the company afloat not to make Reckoning break-even.

I'm going to wait and see on the facts as it's looking more and more like 38 Studios may have mismanaged things but the RI government and EA seemingly actively fucked 38 Studios over.

It's probably best to not light those Curt Schilling effigies just yet even if he was politically hypocritical.
 
[quote name='Fell Open Ian']3 million in sales was to keep the company afloat not to make Reckoning break-even.

I'm going to wait and see on the facts as it's looking more and more like 38 Studios may have mismanaged things but the RI government and EA seemingly actively fucked 38 Studios over.

It's probably best to not light those Curt Schilling effigies just yet even if he was politically hypocritical.[/QUOTE]

Wait what did EA do?
 
[quote name='shrike4242']If their target for break-even on a new IP was 3 million units, the state of RI should have run away from that deal.[/QUOTE]

No kidding. Looking at the list of current gen new IPs (unbundled) that sold 3+ million copies:

Gears of War 5 million
Borderlands 4.5 million
Just Dance 4.3 million
Nintendogs 23.26 million
Big Brain Academy 5.02 million
MotorStorm 3.5 million
LittleBigPlanet 3 million

Poor Rhode Islanders.
 
[quote name='elessar123']No kidding. Looking at the list of current gen new IPs (unbundled) that sold 3+ million copies:

Gears of War 5 million
Borderlands 4.5 million
Just Dance 4.3 million
Nintendogs 23.26 million
Big Brain Academy 5.02 million
MotorStorm 3.5 million
LittleBigPlanet 3 million
[/QUOTE]

Wow, that's really it? No Dead Space, Mass Effect, Uncharted, BioShock, not even Assassin's Creed? 3 million is a lot.

ETA: Wikipedia says that Assassin's Creed sold 8 million copies and BioShock sold 4 million...
 
[quote name='Ryuukishi']Wow, that's really it? No Dead Space, Mass Effect, Uncharted, BioShock, not even Assassin's Creed? 3 million is a lot.

ETA: Wikipedia says that Assassin's Creed sold 8 million copies and BioShock sold 4 million...[/QUOTE]

I was looking at Wiki's list...
 
This has been on the news every other day in Boston. Unfortunately, it's more about Schilling and the Red Sox than his studio borrowing so much money that they will never repay.

Wednesday night on the nightly news they reported they made the first 1 million dollar repayment. May be the only one that Rhode Island gets back.
 
[quote name='62t']Wait what did EA do?[/QUOTE]

Withheld money.

It's still super fluid and fingers are pointing everywhere but it looks like the only truly innocent people here are the dev teams and, to a lesser extent, the tax payers who didn't vote for the jackasses who pissed away public funds on what should have been privately funded ventures.
 
And any potential sympathy for management goes out the window with this:
http://www.theverge.com/gaming/2012...-leads-to-second-mortgages-for-some-employees

(Short version: When the company moved from Massachusetts to Rhode Island, the company told employees who were part of the relocation program that their old houses were sold. Fast-forward to today, it turns out the houses may have been never sold, as an employee received calls from a bank regarding mortgage payments.)
 
Just received an update in my email. Looks like they laid off EVERYBODY yesterday. Holy shit is this messed up.

Home > Updates

RI gov: Schilling company again in violation
By Wire Reports / The Daily Item
PROVIDENCE, R.I. (AP) — Gov. Lincoln Chafee on Friday said former Red Sox pitcher Curt Schilling's video gaming company is again in violation of a loan guarantee agreement with Rhode Island after it failed to notify state officials of mass layoffs.

Chafee said he'll seek an audit of how the company used the loan funds.

Schilling's 38 Studios laid off its entire workforce Thursday — including about 300 employees in Providence and more in Maryland — and did not notify the state, Chafee said at a news conference.

The company was lured to Rhode Island from Massachusetts in 2010 after the state Economic Development Corporation board agreed to a $75 million loan guarantee, which was supposed to bring hundreds of jobs and millions of dollars in tax revenue.

38 Studios' financial troubles came to light this month when it defaulted on a $1.1 million payment to the EDC that was due May 1. The company later paid.

But now it is in default again, Chafee said. Under federal law, employers who have at least 100 employees and plan to shed at least 50 jobs are required to give a 60-day notice to workers and state unemployment officials.

Chafee said Friday he would seek an audit of how the company used the $50 million it has received in loan funds, all of which is gone, state officials have said. The governor wants "everything documented" because, he predicted, there are going to be "so many lawsuits."

Chafee described himself as "quite pessimistic" that the company could secure the type of outside investment that may be the only way for it to stay afloat.

Schilling has not responded to repeated messages left for comment.
Click to expand...
 
The biggest sadness that comes from all this is what will happen to BigHuge. They are so talented over there, and it would be such a shame to have them go down with 38.

Damn, I want a Rise of Nations 2.
 
There's blame to go around. Schilling was the primary decision maker behind pouring money into a doomed MMO project. But the governor was way more interested in throwing 38 under the bus and making himself look like it wasn't his fault than actually trying to improve the situation when he had the chance.
 
[quote name='Rei no Otaku']Schilling can point fingers all he wants. He's full of shit.[/QUOTE]

As opposed to politicians who are, of course, well-known for their honesty.;)
 
The biggest sadness that comes from all this is what will happen to BigHuge. They are so talented over there, and it would be such a shame to have them go down with 38.
Click to expand...
On the plus side, they're neighbors with a bunch of other developers here in Baltimore (including Zenimax) so they might have some good opportunities.

My question is this: why do companies keep trying to make MMOs? Granted, I'm not an MMO guy so I could be completely of base here, but after surveying the MMO landscape and seeing the crap-ton of failed games, why do these guys still decide to go through with it? Even the good ones (WoW excluded) seem to boom for about two or three months after launch and then start dropping off. I just don't get it... are more people playing these games then I'm led to believe? Do the publishers anticipate a three or so month-long peak or are they throwing caution to the wind and crossing their fingers that it will be the next WoW?
 
It's a shame really, because I played a bit of the game and enjoyed it. Also, it's always sad to see a studio get closed off since that makes game developers not have a job :/
​
 
[quote name='Ryuukishi']There's blame to go around. Schilling was the primary decision maker behind pouring money into a doomed MMO project. But the governor was way more interested in throwing 38 under the bus and making himself look like it wasn't his fault than actually trying to improve the situation when he had the chance.[/QUOTE]
What was the governor supposed to do? Give them more money to piss away on the MMO? The studio missed the FIRST payment. I'd have thrown them under the bus too. He should keep quiet about the company's failings? If you honestly believe Schilling when he says that he had a publisher lined up until Chafee said something then I have a MMO to sell you. Any publisher worth their salt would have checked the company's books and saw how ineptly they were being run. Schilling fucked up and now he wants to blame everyone but himself. In what world does he live in where he thinks you can loan 75 million dollars from the government, miss the first payment of over 1 million, and then think they're going to just let you get away with it?
[quote name='Fell Open Ian']As opposed to politicians who are, of course, well-known for their honesty.;)[/QUOTE]
When did the governor lie? In fact Schilling is bitching and moaning because the governor told the truth about Schilling's company. He wanted Chafee to keep quiet and lie by omission which Schilling claims would have let them be saved by some mysterious benefactor he had lined up.
 
[quote name='Rei no Otaku']What was the governor supposed to do? Give them more money to piss away on the MMO? The studio missed the FIRST payment. I'd have thrown them under the bus too. He should keep quiet about the company's failings? If you honestly believe Schilling when he says that he had a publisher lined up until Chafee said something then I have a MMO to sell you. Any publisher worth their salt would have checked the company's books and saw how ineptly they were being run. Schilling fucked up and now he wants to blame everyone but himself. In what world does he live in where he thinks you can loan 75 million dollars from the government, miss the first payment of over 1 million, and then think they're going to just let you get away with it?

When did the governor lie? In fact Schilling is bitching and moaning because the governor told the truth about Schilling's company. He wanted Chafee to keep quiet and lie by omission which Schilling claims would have let them be saved by some mysterious benefactor he had lined up.[/QUOTE]

While I understand the sentiment, where does it benefit the state to completely sink efforts to salvage something out of this? How are they going to get any of the 75 million back if Chafee is being spiteful and burning the rest down? There is a reason why companies go through Chapter 11 first.

And really, lets talk about the real losers in this whole deal. While neither Schilling or Chafee are clean here, the pissing match comes at the price of the employees of 38 studios and Big Huge Games, where most of them probably had no involvement in the failure of the company. If Schilling is being honest about trying to salvage what Big Huge Games was doing (and I have no reason to believe that he's not being honest), I'd rather be supportive of those efforts.

As for the government of RI, you really have to question why they loaned 38 Studios $75m. Even those of us who support Kickstarters know that it is difficult to give people who don't have a track record a lot of money.

Yes, there was stupidity on both sides, but going nuclear isn't the answer.
 
[quote name='TheLongshot']While I understand the sentiment, where does it benefit the state to completely sink efforts to salvage something out of this? How are they going to get any of the 75 million back if Chafee is being spiteful and burning the rest down? There is a reason why companies go through Chapter 11 first.

And really, lets talk about the real losers in this whole deal. While neither Schilling or Chafee are clean here, the pissing match comes at the price of the employees of 38 studios and Big Huge Games, where most of them probably had no involvement in the failure of the company. If Schilling is being honest about trying to salvage what Big Huge Games was doing (and I have no reason to believe that he's not being honest), I'd rather be supportive of those efforts.

As for the government of RI, you really have to question why they loaned 38 Studios $75m. Even those of us who support Kickstarters know that it is difficult to give people who don't have a track record a lot of money.

Yes, there was stupidity on both sides, but going nuclear isn't the answer.[/QUOTE]
The last governor was an idiot for going through with the loan. There's no mistaking that, but that's not this administration which was the one being questioned. On top of that Schilling didn't have to take it. If someone asks me to play Russian roulette and if I win I get a million dollars I'd probably pass. He could have given up equity in his company, but refused to do so.

I also don't understand how telling the truth is being spiteful. You don't throw money into a pit. There was no indication other than the word of Schilling (someone who missed the very first payment, tried to give the state a bounced check, didn't let employees know their health insurance was gone until someone's pregnant wife found out, didn't pay his employees for a month, lied about selling their houses saddling them with late fees on second mortagages, and fired them all through a mass email. Yeah, his word is definitely one I'll accept :roll:) that giving them more money would make the company suddenly solvent and plenty that said it would just be a money pit.

Come on Curt, time to "pull yourself up by your bootstraps" as you teabaggers like to say.
 
I worked for a small privately owned pharma company doing cancer drug research and witnessed first hand how one person's hubris can bring down an entire company. When the owner's private funds started to run thin due to the economic collapse he was still unwilling to sell off equity in the company to keep it running. He did not want to give up control of his baby and instead ran the company into the ground. The entire company was fired on the same day right after Christmas. The only positive was there was enough money left to provide a small severance to people. Some people just cannot give up any control of what they believe is "theirs". I am sorry but if you have no money then it is not.
 
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