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38 Studios, Big Huge Games lay off their entire staff
38 Studios, Big Huge Games lay off their entire staff
May 24, 2012 | By Tom Curtis

May 24, 2012 | By Tom Curtis
Comments
    85 comments
More: Console/PC, Business/Marketing



The ongoing financial struggles at the Rhode Island-based 38 Studios came to a head this afternoon, as an affected source has confirmed to Gamasutra that 38 Studios and its subsidiary Big Huge Games have laid off their entire staff.

This news follows a long string of problems that came to light within the last few weeks, shortly after the company failed to meet the deadline for a major loan payment to Rhode Island state.

This is the email that was sent to the staff of the company this afternoon:

The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.


The studio first failed to make and then eventually did make its $1.125 million loan payment last week, but it also failed to meet payroll, and many staff had effectively been furloughed.

According to reports from local news group WPRI, 38 Studios employed 379 employees as of March 15, 288 of which were located within Rhode Island State.

The Curt Schilling-led 38 Studios originally received a $75 million loan payment from Rhode Island state in 2010, after which the studio planned to relocate from Massachusetts and expand to some 450 employees in the state to develop its full-scale MMO, until now known as "Copernicus."

The company's wholly owned subsidiary, Big Huge Games, released the action RPG Kingdoms of Amalur: Reckoning earlier this year, and that debut title went on to sell 330,000 copies in the U.S. during its first month.

Gamasutra has contacted 38 Studios for further comment, but has not heard back as of press time.

[Update: During a Rhode Island press conference this afternoon, Governor Lincoln Chafee said that 38 Studios ran into such dire financial trouble in part because Kingdoms of Amalur: Reckoning failed to live up to expectations.

"The game failed," Chafee said, claiming that in order to break even, the game needed to sell more than 3 million copies, and it unfortunately did not come close to hitting that lofty goal.

It's unclear where the Governor received this fiscal information from - Curt Schilling recently claimed on Twitter that "Reckoning, 38 Studios first game, has outperformed EA's projections by selling 1.2mm copies in its first 90 days."]


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Comments


Ed Macauley
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It was inevitable, but condolences to all involved. I've been there, it sucks.

Joe McGinn
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Agree condolences, a sad day.

[Update on the Update]: Governor Chafee is a total idiot. Amular didn't fail. The company management who expected a single-player RPG to be able to fund itself AND an MMO development failed. Big Huge Games actually made a pretty decent, reasonably successful rpg for their first crack at it. Shame they won't get another, there's really only one console RPG developer (Bethesda) left on the planet since Bioware has given up on the while RPG thing.

Kim Pittman
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Especially since they apparently expected them to sell those millions and millions in the first 2 months.

How foolish.

Jack Mahogany
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Very sorry to hear this. Best wishes to all at both companies.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Joe McGinn
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Sadly, those days are past ... you can't get a contract for a team to start a new studio any more. Some will start little indies ... most will have to move, and be lucky to get work even there. Sucks.

Arlette Resendiz
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This is terrible and unfortunate. Keeping the staff in my thoughts! Stay Strong!

Dan Felder
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This is awful, they came out with a game people really liked and still crashed. Such a shame.

Michael Krehan
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What's even worse is how management seems to have kept their employees in the dark about all this. Quoting an anonymous source on another website:

"38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered.

We have not received a paycheck since April 30th.

On May 15th, we found out we were not getting paid when our checks did not hit our accounts.

Our medical insurance runs out tonight at midnight.

We found this out when an employee's pregnant wife was told by her doctor, this was on Tuesday 22nd May this week.

The company has not communicated anything concrete to the team throughout this process, leaving team members to figure out insurance stop-gaps (where people could afford it), etc. on their own."

Ed Macauley
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Indeed. So instead of paying their employees and saying "Sorry, we don't have the money to continue, here is the pay we owe you," they made a million+ dollar payment on a loan that is most certainly now going into default. Not cool. Your people should come before the bank.

Weston Wedding
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If this is true there's a bit of a legal shitstorm on the way, I'd hope.

Sherman Luong
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well my state make you pay them than pay the employees.

Aaron Casillas
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Asking out of innocence, you guy think it would be beneficial for the game devs to have a universal health insurance that we can all buy into?

Jeffrey Crenshaw
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Wow, that is low, yet not surprising. Same for the callous indifference in the email illustrated by the article. I know my first layoff, good old Danny Bilson visited our studio and spoke as if letting us go was a bother for him. I don't know if he was really sorry it had to happen and just bad at expressing it or if he was really as callous as he seemed. One of the pivotal moments of my life, when I realized just how heartless America has become. Seems like it just keeps going.

"Asking out of innocence, you guy think it would be beneficial for the game devs to have a universal health insurance that we can all buy into?"

I remember the IGDA had a health care option, not sure if it's still there. But yeah, I think something like that could be good since it's such a volatile industry. Not sure what the logistics are though, and I myself have simply bridged gaps with COBRA.

Malachi Griffie
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@Aaron: IGDA has some insurance options: http://www.igda.org/igda-health-business-insurance-program

Rob Wright
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This is tragic on a number of levels, first and foremost for the 38 studios and Big Huge Games staff members. Layoffs are awful, I hope you all land on your feet.

Second, this is a black eye for gaming. It's unlikely any outside investors, being it private or government, are going to start dishing out money any time soon after this debacle. And you'll NEVER see another loan deal like this from a state again; I'm not saying a $75 million loan from R.I. was a good idea, rather that now you'll be luck to get a $75,000 loan from any state going forward. Financially speaking, this is a disaster, and 38 Studios will be a cautionary tale against investing in new gaming companies.

Third, this is bad for game development in general, though specifically for costly big budget MMOs with big ambitions. It's bad because 38 Studios had a passionate and wealthy founder who loves gaming, an impressive collection of talent (Salvatore, McFarland), strong development experience (including Big Huge Games), and a really good first title that (reportedly) sold over a million copies to date -- and it STILL failed, showing just how unforgiving and brutal the economics of game development can be.

Derek Smart
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Well said. This, the whole RealTime Worlds implosion etc are all a Black eye for the industry.

Then there's City National Bank last week suing Konami et al for allegedly failing to pay back a $14M game dev related loan.

Gesine Fischer
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@Michael Krehan: It hurts, it sucks... and sadly, not being kept in the loop or being informed of downsizing is normal. It is the one thing I truly hate about our industry, as you can never feel safe or comfortable in your employment.

My heart does go out to the people involved. If you have twitter, please hop on and use the hash-tag of #38Jobs - a lot of offerings are not going out and a lot of people looking for experience are there to seek you.
And if you do not have twitter.. consider getting it, even if you do not use your real names right now.

james sadler
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Its true that this is the norm, but it doesn't have to be. One of the things our company is founding on really. All employees salaries are guaranteed for X amount of years. We don't seek investors either. It means a slow growth plan, but that's fine as long as it means stability in an industry where that is a strange thing. Wish we wee in the position to hire some oft these people, but we aren't right now.

james sadler
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The big problem was that they had huge overhead and even the money made from their first title couldn't pay for it. More a lesson in how to do a startup (and how not to). They grew way too fast and figured a huge loan would be ok to pay back. They only had a single source of income and as we all know a game's income only lasts for so long before it dwindles to almost nothing. A lot of bad decisions here by the sate and the company. Really sucks that the employees had to pay the price. The fact that they were seemingly completely in the dark really blows. I'm sure there's going to be a slew of lawsuits over this from now ex-employees. Just really sucks.

Michael Rooney
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Part of the loan conditions were that they grow so quickly. It's pretty stupid all around. 38 Studios was put in a position by Rhode Island, and by accepting the loan themselves, that wasn't sustainable for a new studio.

I really hope people don't put all the blame on 38 Studios in Rhode Island. Hopefully people are made aware of how terrible an investment the 75 million dollar loan and the conditions going along with it were. When I read the loan conditions I was seriously dumbfounded how anybody could even expect it to end well under the best circumstances.

Maria Jayne
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The speed that this has all happened and the suggestion that employees had no clue why suggests somebody stuck their head very deep in the dirt and didn't even face what was happening.

Derek Smart
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I predicted this almost immediately after the first news broke that there was no way in hell this situation was recoverable. Here we are. What a shame. All those talented people now out of work due to bad management decisions and everything in between.

When you've been doing this for as long as I have, it is easy to spot the trends from a mile away. They've been in denial for two weeks.

Aaron Casillas
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I recall your post...I was at BHG when 38 purchased them, I left and took the voluntary layoff. Guess I was lucky, but the writing was on the wall back then.

I hope all the BHG guys land on their feet, they are superb professional developers and a welcome add to any company out there.

Samuel Batista
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They've been in denial from day one. Using a 75mil loan to fund the development of their first console title PLUS their first MMO... to call it risky is a severe understatement.

I bet they counted on using the profits from Kingdoms to fund the development of the MMO. On the surface this seems like a great plan, but this means you need to finance 2 modern game studios with the profits from a brand new IP with very little advertising behind it.

They should have bought Big Huge and developed their IP into a successful franchise with a relatively small team, THEN scale up and develop an MMO. They chose to expand rapidly with the expectation that Kingdoms would solve all of their problems. I can only imagine how much money 38 studios was burning through monthly with their 300+ employees.

I hope the creative minds behind Big Huge manage to recover and start over. Rise of Nations is my favorite RTS of all time, and I hope to see some innovation within that genre.

Derek Smart
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Absolutely. And that is what made no sense to me whatsoever. I mean, $75M is not a lot when you consider what they were up against. Also, in all fairness, apparently they didn't actually get $12M of that money; I think it was held back to pay the bonds; though apparently they were still in the hole for it.

Now RI State owns videogame IP. I bet all those who were against that deal from the start, are probably riding the "I told you" train right about now.

Truly tragic. Hopefully all the talented guys can find new jobs. It sucks to be out of work at this point in the industry because most everyone with two brain cells, is going lean and mean.

james sadler
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Yup. I remember reading about the loan when they first got it and thinking it was a bad idea.

Michael Rooney
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The rapid expansion was part of their loan terms. I agree expanding so rapidly was stupid, but it wasn't necessarily entirely the fault of the company.

Michael Rooney
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@"I'm gonna give you a quarter if you punch yourself in the gut. Do you take the money and say it's not your fault your stomach hurts?

No, it's a stupid deal, and it's your fault if you take it."

Reading comprehension. Do you have it? I said, "not entirely," there is still plenty of blame to put on the company, but there's a lot of blame to put on Rhode Island as well.

The deal isn't obviously bad to a naive start-up like your example is to the average person. A better example would be telling a 10 year old you'll give them $1,000,000 to eat some pure sodium. Lots of people with enough knowledge to know that's a bad deal would say no, but the 10 year old probably doesn't know they'd die. If I were to do that do you think I wouldn't be at fault for putting a 10 year old in a position where they would probably choose to die?

Daniel Campbell
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My heart goes out to those losing their jobs. Working in the game industry can be a dream come true, and to have that dream ripped from you can be soul crushing. Stay strong.

Aaron Casillas
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"Making games is like having a bitter mistress"

TC Weidner
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My thoughts are with all those effected, wishing you the best of luck. From what I have seen leaking about their MMO, its a shame, it looked stunning.

Kyle Johnson
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Our hearts go out to all of those at 38 Studios and Big Huge Games.

Heinz Schuller
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Commiserations to all who were affected, very sorry to hear this news. Some really great talent at these studios!

Derek Smart
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Remember those numbers I was giving in that other thread? Well, apparently they figured out the math too.

"Today, Rhode Island governor Lincoln Chafee told reporters that Amalur needed to sell more than double that number just to break even."

http://kotaku.com/5913167/curt-schillings-role+playing-game-suppo
sedly-needed-to-sell-3-million-copies-to-not-fail

thay thay
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I feel sorry for the hundreds of ppl losing their jobs and tax payers who have to pay the loan back. Well at least schilling still has his ESPN gig... The rich guy gets away again ;-/

Robert Hallwood
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Always saddens me to hear of a talented group of developers coming upon hard times through no fault of their own. Best wishes to you all for a successful continuation of the careers you've worked hard at.

Christopher Thigpen
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Stay strong 38 devs. My heart goes out for you. I have positions for developers in South Carolina, if anyone knows people.

Luis Guimaraes
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Big-huge fan of Rise Of Legends. Best luck, everybody.

Lee Thompson
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Needed to sell 3 million copies? Seriously? Selling that many copies is a fairly rare event...

Jane Castle
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Not only that the 3 million copies number is in order to BREAK EVEN. They are assuming they will need to sell EVEN MORE to actually turn a profit..... INSANITY......

Bob Johnson
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Should have started smaller and worked their way up. Ah well. Shoulda woulda coulda.

Jonathan Murphy
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Rot in hell Kurt Schilling for conning people out of money you couldn't possibly pay back. Rhode Island is left with the bill, people out of work.

[User Banned]
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Bob Allen
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While you can disagree with Schilling conning RI, he does come off as a bit of a hypocrite when a few months ago he was bemoaning big government while shilling for the GOP and at the same time funding his company entirely with taxpayer money.
http://blogs.bostonmagazine.com/boston_daily/2012/05/21/curt-schi
lling-shilling/#more-27546

[User Banned]
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Jonathan Murphy
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tr.v. conned, con·ning, cons
To swindle (a victim) by first winning his or her confidence; dupe.

There were people on both sides who immediately said this is a bad idea. He made a closed door deal to push it through. He put in $4 million and got back $75 million. When they missed their first payment. When the time came to flip the bill he made the employees do it. 400 people are out of work, the tax payers flip the bill, Schilling keeps his money(I'll change my opinion if it's not true). He conned them!

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Bruno Xavier
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R.I.P

Jeremy Alessi
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I saw Schilling speak at the first MIT BiG conference. It was pretty clear to me even at that early point that he was in way over his head. As he described the plans for 38 Studios I just couldn't help but think that he should scale things back. Instead of taking a single huge risk he could have commissioned anywhere from several medium titles to hundreds of small titles.

There's a quote from Steve Jobs about one home run being better than 2 doubles but in this instance I think they could have hit about 750 singles from where I'm standing.

Overall, this is a very sad story for the industry as a whole but especially for the employees. Hopefully we'll see some talented new studios come out of it.

Harlan Sumgui
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The two main problems with their approach: 1) lack of differentiation of product. Project Copernicus (from what I've heard) was going to be like Amalur in so far as it was to be a mainsteam product with the broadest appeal possible. Which meant that they would be competing on the same turf as EA, Acti-Blizz, Microsoft Game Studios, et al.; and that would require access to very large sums of capital. A smaller entity can compete in the mainstream segment [i]if[/i] they have something to differentiate the product.

Kingdoms of Amalur attempted to portray itself as being different--iirc, they marketed 'new innovative combat'. But when one looked at audience reaction, it was obvious that the game was a generic and tepid fantasy rpg with nothing to get excited about and nothing that would create real fanatics of the IP.

So after KoA, they were left with this MMO they were developing which was also a product without anything to differentiate itself. Nobody is going to invest in an expensive tepid generic mainstream videogame property in this market.

The second reason for their failure was over ambition. I'm going to guess that to be a great pro athlete, you need supreme self confidence, maybe even clinical narcissism. If so, is it any wonder that Shilling thought he could compete [i]immediately[/i] with huge multinational corporations on their turf and win?

It is too bad though, that they did not treat their employees better. Leaving people without health insurance, their last paycheck, or any sort of warning is just wrong.

Derek Smart
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The biggest problem when things like this happen is not the primarily the guys in the basement doing the work, it is mostly the guys at the top calling the shots.

I have several friends at 38Studios - in fact some of them used to work for me. The general theme is that they were going in all different directions and at 350+ personnel, a massive monthly burn rate and hardly any direction (other than the BHG team that was bought part & parcel) whatsoever, most already saw this coming.

What they didn't see coming - until they read it in the news after the loan payment debacle - was that the co was in such dire straits. But upper management obviously knew this the whole time and kept it from teams in place.As soon as news broke about that missed payment and some things started trickling out, I knew it was all over - and said as much in another G thread.

This was an overly ambitious enterprise headed by a bunch of "visionaries" who, collectively had no clue as to how our industry actually works. So they went out and hired some of the most experienced people.

Then someone had a flashbulb moment and so they went out and bought (I know how that went down from start to finish) BHG. If they hadn't done that, this co would have folded without ever having released a product.

The Reckoning game was branded from a game that BHG was already working on prior to being bought.

The only person in that "visionaries" team worthy of mention, is Ken Rolston. But one man doesn't run a Titantic sized venture like this.

http://38studios.com/people/visionaries

What is the point of hiring the best and brightest, if you're not going to listen to them?

The implosion (within two weeks!) of this company was a tragic sequence of events that ended up in a slap in the face to the hard working teams there.

If you've seen the patently disgraceful termination notice (retrenchment? seriously? who the frack talks/writes like that?), then you should already have an idea as to the mindset of management.

Most of us who have been doing this since they put up the rafters, have seen crap like this happen repeatedly; the RealTime Worlds implosion being the most recent.

The thing is that this goes way beyond just a company folding and people being out of jobs. It continues to push the industry farther and farther away from innovation, funding and idealistic ventures which would in turn continue to push the industry forward.

And it continues to cause splintering of the talent.

So now we have 350+ people who are, among other things, going to end up elsewhere (most likely to make the same damn mistakes), put up Kickstarter projects, startup small teams. And go flood the industry with shitty games.

Now we have more fucking noise to deal with because most think that they have what it takes to take a game from A to Z. No.fucking.clue.

This had nothing to do with risk taking, "we tried and failed" bullshit. It has to do with sheer incompetence and overreaching ambitions. In short, egos writing checks the brain trust couldn't possibly cash. Literally.

Where was Curt this whole time? Writing denial-ridden bullshit on Facebook. The other "visionaries"? MIA. Management? MIA. In fact, we heard more from the [clueless] RI govt. than we did from any of these "visionaries".

And to make things worse, they were actually then trying to get more (the rest of the loan) from the State (or whoever) because Copernicus was a "year" away.

That just did it for me.

A year away? Really? No press. No content. No gameplay video. NO MARKETING. NOTHING.For an MMO that is a year away, you'd better be in Beta.

Then they release a carefully rigged visual flyby; no doubt designed to continue promoting the snow job that was the Copernicus project in order to get more money, garner interest etc. Then, what, four screen shots?

And that's when I lost it.

According to Curt, Copernicus has sold 1.2m copies. That's just the same bullshit that Curt has been spinning. In fact, not until this farce broke, did he - or anyone - ever tout the Reckoning's sales figures.

The game sold around 350K copies - at best. Those of us who are publishers, have access to numbers etc - know these things.

Then - KNOWING - that the company was not likely to succeed and that making a $1M payment on a loan that was going to default anyway was just a bad idea, they decided to make good on that INSTEAD OF MAKING PAYROLL!! When you consider this, then look at the insensitive nature of the termination notice, it is not hard to draw your own conclusions about the mindset of the people who ran this company.

My guess is that there is a lawsuit or two probably in the early stages as I type this.

Plus, as a result of this govt. loan and the fact that the entire 38Studios IP catalog was collateral for the loan, lawmakers are going to start looking into it, audit the company's financials and by the time the dust settles, most - if not all - of what went down, will be made public.

Either way, the State of RI is stuck with a $112m - $140m price tag for this loan farce. And from my experience, there is no way in hell that this IP can be sold; let alone for the $20m price tag that I've been hearing about.

As for the Copernicus project, unless it was already in Beta, it is as good as dead because any snr. dev worth his salt will tell you that the single most difficult thing to do with any software project - let alone the complex beast that is an MMO - is to pick up someone else's code. And for a game that was neither Alpha, nor close to finished, any nutcase who even attempts it, gets what they deserve.

Matthew Mouras
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It was a fabulous game. Too bad that poor management and shooting for the stars on the first go did them under. Very sorry to hear this happened. All the best to these developers.

Michael Rooney
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Can somebody clear this up for me. Did they try putting the studios up for sale before laying everybody off and closing both of them? It seems like at least in the case of BHG, it wouldn't be an unreasonable investment; especially if you could purchase the KoA IP also.

E McNeill
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BHG was having trouble finding a buyer the last time; they got "saved" by 38 Studios at the last moment. A second savior would be unlikely, especially now.

Kim Pittman
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Why buy a studio and assume all that debt when you can just snag all the unemployed devs for cheap because they have bills (and apparently second mortgages) to pay?

At the point the studio is collapsed like that, they aren't going to find a buyer. The good people are already jumping ship, and really, that's what you want to buy, the devs.

Nooh Ha
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What I find most remarkable about this whole fiasco is not that this Titanic of a company veered straight into the iceberg but that the Rhode Island administration thought that this was in any way a prudent investment. $75m loaned to a start-up MMOG developer = zero commercial or investment due diligence (or, more likely, ignored due diligence).

$75m could have funded an entire eco-system of start-up mobile/tablet/browser indie games development and publishing companies with diversified risk and considerably greater long-term local employment benefits. Where Quebec has invested in developing and stimulating an infrastructure for an indigenous development industry, RI essentially bet on a single project.

Derek Smart
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Absolutely.

The sad part is that they had heavy hitters from IBM and Price Waterhouse do audits. And apparently BOTH companies expressed their concern about 38Studios as a "going concern" (look it up on Wikipedia). Yet - this continued.

If anyone had actually done proper due diligence, this loan would never have happened. Heck, my guess is that they wouldn't have even qualified for a $1M SBA loan, let alone a $75M loan guarantee.

My guess is that they're all going to point the finger. I heard one opinion that 38Studios were pissed at RI for not giving them the rest of the money from the loan and that the payment of the installment (instead of making payroll) was an attempt to keep things on an even keel in order to secure that. But the problem is there was no more money to be had because they already had all the money due on the loan and the holdbacks were to pay the bond installments (or some such).

When you consider that, after blowing more than $50M and it was allegedly - and laughably - a "year" away, doing the math tells you a) no fucking way b) you need another $50m+ just to make that launch happen. Now you're talking over $100m for an MMO. From a first timer. Yes. Really.

Matthew Mouras
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I'd imagine that this was Shillings real role as "visionary" - increase the profile of the company, grease the wheels, and increase the loan. He's no stranger to state politics.

What was the process for approving the loan? It would be interesting to find out. I didn't follow all of what you were saying, Derek. Diligence was actually done by reps from IBM and Price Waterhouse? So someone just neglected to listen to the technical expertise and green lit a huge loan for an unproven developer? "It's video games! Everyone loves 'em! Here's your check." Unbelievable.

Muir Freeland
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The first indicator that something was wrong was that selling over a million copies was set up to be a failure scenario. Really, guys?

Nathan Zufelt
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Those million copies would have meant success for BHG. Problem was, they were funding the MMO sister studio as well.

Leonardo Ceballos
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Yea, as others have said, this was essentially set up to fail. It was the business model. You're creating a game that, as a new IP, HAS to sell well over a million copies to keep you in business? It just sounds like overreaching to me, but it also underscores the huge difficulties that seem inherent to the AAA model these days.

If I recall correctly, Bulletstorm was also considered a disappointing performance with "only" 2M copes sold. And now the next generation looms, and better graphics might mean even larger art teams and even bigger budgets? Where is this all going? If I recall correctly, it was Epic who was calling for the return of the $30 - $40 dollar game, and that's something I'd love to see. Ultimately, if we're going to have a future as an industry beyond 1-2 huge publishers and a million indies, we're going to need to build a progression from indie to A, to AA to AAA so that developers can grow gradually and risk less.

Alan Wilson
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I wrote a comment on this one back when the whole $75m deal was announced. Being a smart-arse, I was completely right at the time. I will now sum it up in a much briefer comment:

"What a bunch of idiots."

Sympathies to all those dumped onto the street, truly. We are recruiting - see our Jobs page.

Derek Smart
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Yup - I remembered that. :)

Derek Smart
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Think I'm the only one who thinks they were in denial? Read this.

http://www.joystiq.com/2012/05/25/editorial-38-studios-and-the-du
nkin-delusions/

Derek Smart
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http://networkedblogs.com/y3N6w

Troy Walker
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... this is unfortunate for all of those affected.


it will also make it just that more difficult for startups to get funding.

Matt Cratty
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Very sad news.

Been through it, still can't figure out how it happens. I mean I know how it happens, but let's not dwell on that.

John Tynes
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I could at least understand RI making this loan decision if it was a large employer like EA or Ubisoft who can shuffle work around their various studios. Speculating on a risky startup like this was incredibly ill-advised.

Lee Thompson
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@Derek Smart,

I believe the 350k unit figure (which was for Kingdoms of Amalur btw not Copernicus) is for North America retail box copies only and didn't include digital/overseas sales so the total 1.2m may be right. Regardless of that, overall I agree with you. And having to sell 3m copies on a new IP to break even is suicide.

Derek Smart
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Yes - I am aware that the sales are for Reckoning of course and that they are retail. Digital numbers can no way in hell account for almost 700K units. That's just crazy talk. Especially when you consider that the game never charted anywhere digital.

oh, and the hits keep on coming - as well as the finger pointing I alluded to.

http://goo.gl/e81y8

http://goo.gl/JJoZd

http://goo.gl/X8dBj

Eric McVinney
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@Derek - Both links you provided turned to be a page not found :(

Derek Smart
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OK changed them to shorter links

Eric McVinney
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Great, thanks!

Malachi Griffie
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This sucks. I didn't follow the news this past week so I had no idea.

I always wondered where their funds were coming from. For some reason I thought Schilling was funding the company himself.

Seems like there were just horribly horribly mismanaged -- they expected Kingdoms sell more than 3 million (!) copies to be able to recoup cost AND continue to fund Copernicus. That is freaking ridiculous! A new IP, single-player RPG, with very little marketing and they *expected* 3 million+ sales?!

Lee Thompson
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Yeah that just boggles my mind.

Vytautas Katarzis
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This could go into "Don'ts of the game development" book.

Newly created studio that sold over 1 million copies of new IP, and that wasn't even close to cover the costs.

Sean Scarfo
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My question is... WTF did they spend $75,00,000 on in less than 3 years? Seriously, lets say they paid their 300 game devs about 60k a year (which is high balling it as I know they had interns doing some free/cheap work), they'd be at less than 50mil. I can't imagine they spent the rest on building rent/mortgage & utilities and executive pay. Something fishy went on. The sad part is that the state of RI got suckered into the loan. Whoever approved that kind of loan from the state is ... in deep schtick.

Eric McVinney
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60K is normal depending on the position you're in. For example, I know personally some Producers earning between 60K - 70K, and that's not including bonuses. But having 300+ peeps and with everything included (rent, utilities, and everything else you mentioned) it is fishy how things went wrong...

Jeffrey Crenshaw
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Not a business guy, but I've been told that even with an employee getting a salary of $60K the business pays more than $100,000 per employee when you consider equipment, electricity, renting office space, etc. Also, advertising is not cheap. Also, neither is executive pay :/.

Eric McVinney
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@Jeff - Yea, the numbers just don't add up, IMO.

Lee Thompson
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Actually this is just getting weirder:

(both articles on theverge.com)

http://goo.gl/eyjbw

http://goo.gl/Lbz2C

Joe kennedy
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ROFL Company motto: If you can't do it better than it's ever been done before, work for someone else.These guys were full of themselves,...for real!!!!What the hell does a pitcher, comic book writer, and novelist has anything to do with making hit games.

PLLLLLEEEEAAAASSSSEEEE people, get a grip. This was doomed from the start. Game developers make games not Hollywood or sports celebrities or novelist. Sounds like celebrity apprentice for game project. Yes this is sad that lots of developers got screwed but watching this from a far it was rather hilarious to see these guys actually think they're game developers all of the sudden. Do not work for celebrities and do not work for anyone other than real game developers.Good god, its hard enough to find cohesion, strong experienced developers and leadership on real game projects; why make it enough more challenging by infecting our industry with nonsense! As we can see, our industry is already rocky enough as it is.This was bound to happen. Good luck to all that are affected

Thierry Tremblay
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I think I'm going to start a baseball team based on my experience as a game developer. Who wants to lend me some money? I'll create tons of jobs.

Derek Smart
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...and so it came to pass

http://www.gamasutra.com/view/news/169444/38_Studios_Downfall_The
_Gamasutra_Report.php


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