38 Studios is Working on a Game, Apparently, Afterall (Kingdoms of Amular)

[HaemishM]

I wonder how much they needed Amalur to sell if the 1.3m (or 1.2m) sales now reported lead to this in just 2 months after release...

More than likely, since it was published by EA, they got a really shit royalty deal that had milestones they couldn't reach (like an idiotic Metacritic rating or some shit). So while they sold that many, they probably didn't get more than $5-$10 a copy, if that. And when you burn through $50 million with nothing to show for it (and you give $5 million to a hack like Salvatore to write GODDAMN LORE any shithead fanfic author on the Internet could write), that's just not enough money.

[naum]

A fucking letter? Schilling didn't even bother to gather them in the parking lot and tell them to their face?

What a douchebag  

[satael]

I wonder how much they needed Amalur to sell if the 1.3m (or 1.2m) sales now reported lead to this in just 2 months after release...

More than likely, since it was published by EA, they got a really shit royalty deal that had milestones they couldn't reach (like an idiotic Metacritic rating or some shit). So while they sold that many, they probably didn't get more than $5-$10 a copy, if that. And when you burn through $50 million with nothing to show for it (and you give $5 million to a hack like Salvatore to write GODDAMN LORE any shithead fanfic author on the Internet could write), that's just not enough money.

I know that, but I wonder how much were they actually counting on it to sell to actually keep 38 Studios afloat if 1.2m sales lead to a shutdown in just a few months?

edit: shitdown->shutdown (a freudian slip or something )

[Kail]

I know that, but I wonder how much were they actually counting on it to sell to actually keep 38 Studios afloat if 1.2m sales lead to a shitdown in just a few months?

Looks like the governor is claiming in a press conference that the studio collapsed because of the poor sales of KoR.  Sold 1.2 million and required something like 3 mil to keep the company afloat.

 

http://www.giantbomb.com/news/report-38-studios-lays-off-entire-staff-updated/4172/

[Venkman]

Governors office is claiming to have received a bunch of financial docs. 3mm isn't nearly enough units. Whatever the dollar take (minus royalty and vendor payments), the only way 3mm matters if it was used to show company viability to additional potential investors. THAT is the only way to keep a company like that afloat through the most expensive phase of MMO development on a game that wasn't to launch for another year, if that.

Sucks all around.

Worse when you know some of the folks.

[Modern Angel]

Enraging. You can't remove the politics from this. I hope his hypocritical ass lives with at least some small amount of shame for the rest of his life, though I doubt it, since he sent a fucking letter to everyone.

Piece of shit.

[Maledict]

It surely cannot be a coincidence that today is the anniversary of Nicolaus Copernicus's death right? The universe isn't that twisted?

[Hawkbit]

3 million copies was what they told the state as expected sales to break even, yet he quotes here: 

Quote
I wanted to clear up some misinformation around 38 Studios first product, Reckoning. Sales of Reckoning OUTPERFORMED EA’s expectations and sold more than 1.2 million units in the game’s first 90 days in the market.

So who is full of the bullshit?  He's telling the state 3mill, but EA is cool with 1.2mil.  So if 1.2 million OUTPERFORMED EA's expectations, does that mean that EA did not expect the game to be profitable?  Apparently, the math on the profitability was as good as the system design for the company.  This is fucking bonkers.

[Modern Angel]

This is fucking bonkers.

This is the game industry.

[Tannhauser]

Just bad news.  New company put out a good game and had at least a visually exciting MMO in the pipeline.  But I guess no one held the purse strings tight enough.

I don't know who's at fault, but I'd start at the cockgoblin that gave Salvatore 5 million dollars.

Sorry laid off folks.  I enjoyed your game.  Hope you find an even better job soon. 

[Calandryll]

Having just gone through something similar to this back in March (no pay for time already worked with no notice, our owner never even emailed us, etc) I feel awful for everyone there. Hopefully Turbine and Tencent can pick up a bunch of folks.

[Lantyssa]

I guess this means Schilling won't be coming back here, huh?

[Lucas]

whoa, this is really like the "parking lot" disgrace back during Sigil's time...Probably worse, with the whole health insurance on top.

[Ingmar]

3 million copies was what they told the state as expected sales to break even, yet he quotes here:  

Quote
I wanted to clear up some misinformation around 38 Studios first product, Reckoning. Sales of Reckoning OUTPERFORMED EA’s expectations and sold more than 1.2 million units in the game’s first 90 days in the market.

So who is full of the bullshit?  He's telling the state 3mill, but EA is cool with 1.2mil.  So if 1.2 million OUTPERFORMED EA's expectations, does that mean that EA did not expect the game to be profitable?  Apparently, the math on the profitability was as good as the system design for the company.  This is fucking bonkers.

Was it 3 million copies of Reckoning, or 3 million copies of MMO-that-will-never-actually-be-made?

What I find baffling is how they spent all that money so fast.

[Outlawedprod]

whoa, this is really like the "parking lot" disgrace back during Sigil's time...Probably worse, with the whole health insurance on top.

Blame Everquest mania imo.

[koro]

3 million copies was what they told the state as expected sales to break even, yet he quotes here:  

Quote
I wanted to clear up some misinformation around 38 Studios first product, Reckoning. Sales of Reckoning OUTPERFORMED EA’s expectations and sold more than 1.2 million units in the game’s first 90 days in the market.

So who is full of the bullshit?  He's telling the state 3mill, but EA is cool with 1.2mil.  So if 1.2 million OUTPERFORMED EA's expectations, does that mean that EA did not expect the game to be profitable?  Apparently, the math on the profitability was as good as the system design for the company.  This is fucking bonkers.

Was it 3 million copies of Reckoning, or 3 million copies of MMO-that-will-never-actually-be-made?

What I find baffling is how they spent all that money so fast.

Probably the most damaging thing was that the terms of the loan required them to have something like 480 jobs filled, which is completely untenable for many larger, established developers, never mind a fresh start-up with no titles out the door.

You can't subsidize videogame companies like you subsidize other industries.

[Hayduke]

So who is full of the bullshit?  He's telling the state 3mill, but EA is cool with 1.2mil.  So if 1.2 million OUTPERFORMED EA's expectations, does that mean that EA did not expect the game to be profitable?  Apparently, the math on the profitability was as good as the system design for the company.  This is fucking bonkers.

I don't see how these are contradictory.  The game may have been profitable for EA but not profitable for 38 Studios.

[Merusk]

I guess this means Schilling won't be coming back here, huh?

That was decided 2 years ago when nobody would starfuck him.

In the end this was raiding the coffers of the taxpayers by manipulating connections.  I expect to see more of this over the next few years, not less, as more states become desperate to keep jobs.  It just won't be as high profile because there won't be a celebrity at the helm.

What I find baffling is how they spent all that money so fast.

It's been almost 2 years.  That's only 8k/ month / employee.  Easily burned through on bennies, salary, utilities and rent at even modest salaries of non-tech employees.  Punch it up to the Tech sector level and yeah they've been empty for a while.

[Numtini]

What a sleazy sordid mess.

And I know before November I'll see that dirtbag pimping for Scott Brown babbling about personal responsibility and keeping the gubbamint out of people's lives.

[Abagadro]

I doubt it. The dude will be toxic politically.

[kildorn]

3 million copies was what they told the state as expected sales to break even, yet he quotes here:  

Quote
I wanted to clear up some misinformation around 38 Studios first product, Reckoning. Sales of Reckoning OUTPERFORMED EA’s expectations and sold more than 1.2 million units in the game’s first 90 days in the market.

So who is full of the bullshit?  He's telling the state 3mill, but EA is cool with 1.2mil.  So if 1.2 million OUTPERFORMED EA's expectations, does that mean that EA did not expect the game to be profitable?  Apparently, the math on the profitability was as good as the system design for the company.  This is fucking bonkers.

Was it 3 million copies of Reckoning, or 3 million copies of MMO-that-will-never-actually-be-made?

What I find baffling is how they spent all that money so fast.

Probably the most damaging thing was that the terms of the loan required them to have something like 480 jobs filled, which is completely untenable for many larger, established developers, never mind a fresh start-up with no titles out the door.

You can't subsidize videogame companies like you subsidize other industries.

You shouldn't dump the majority of your state's kickstarting fund into a single venture, and you shouldn't request all that money knowing the expected return on it (450 jobs) is completely unworkable.

Everyone at the table should have fucking known better than to do this deal.

[Numtini]

You shouldn't dump the majority of your state's kickstarting fund into a single venture

Apparently originally the fund was only going to allow for 10m as a cap for an individual business, but the governor intervened and got them to remove it from the bill because he was already in negotiations with Schilling before the bill even passed.

Keep in mind that matching or bettering this was also a big issue in Massachusetts and our governor took a lot of heat for not doing so.

[Soln]

What a tough guy.  What a tough, no holds barred, great athlete, all round guy for charities and talking tough on game boards.  Christ what a loser.

[kildorn]

You shouldn't dump the majority of your state's kickstarting fund into a single venture

Apparently originally the fund was only going to allow for 10m as a cap for an individual business, but the governor intervened and got them to remove it from the bill because he was already in negotiations with Schilling before the bill even passed.

Keep in mind that matching or bettering this was also a big issue in Massachusetts and our governor took a lot of heat for not doing so.

I don't get that. He's a baseball dude. Okay. But if you're going to dump 70m into a game studio, MA already has some proven ones that know how to do shit with the money.

You don't go "hey, you're well known, OBVIOUSLY you're a sound investment! Take all our stimulus money and be magical!"

[Venkman]

That's why nobody in Boston nor on Wall Street was ponying up.

You shouldn't dump the majority of your state's kickstarting fund into a single venture, and you shouldn't request all that money knowing the expected return on it (450 jobs) is completely unworkable.

Everyone at the table should have fucking known better than to do this deal.

Yep. RI Economic Development Commission heads are already rolling. Unfortunately, that just means they'll get a better paying job in the private sector rather than what they truly deserve. Chafee is going to use this to run a whole lot of prior administration people out of their jobs over the coming weeks.

And the lawsuits that are coming are going to be crazy.

[schild]

I will not interview this idiot. Ever. He makes McQuaid look pro.

[Stormwaltz]

With the email layoff notice, Curt has assured he will be remembered for a long, long time by people in this industry.

[UnSub]

Schilling's the face of this, but theoretically he hired people behind him who knew what they were doing. Those are the people to chase.

It's probably very likely that only a few people knew about the financial issues, given that John Blakely (ex-SOE) and Mark Hansen (ex-LEGO Online) joined in March and (regardless of what you think of them) they are unlikely to join a company they knew to be floundering.

Yes, Schilling has some questions to answer, but so does Jennifer Maclean (CEO), Bill Thomas (COO), Rick Wester (CFO) and Gavian Whishaw (GM), plus maybe Jason Robers (EP of Project Copernicus) and Sean Dunn (Studio GM). Especially Wester.

[Soln]

Besides dumping tens of millions of bad loans on the tax payers, to pay himself off and his buddies first, and then leaving people without jobs or health insurance, the final coup was making them move to RI. I wonder how many people got second homes, or sold them underwater in MA, or bought new ones.  They are now stuck with houses and no local video game industry to rely on.

[Outlawedprod]

http://www.boston.com/businessupdates/2012/05/24/curt-schilling-studios-lays-off-all-staff/Oz242vVpcy6FLRwegTtkOP/story.html

“I’m stunned, and I’m heartbroken,” said R.A. Salvatore, a Leominster fantasy author who was a consultant to 38 Studios and whose son worked at the company. “This is one of the best teams I’ve ever seen assembled. They were doing amazing work.”

[Chimpy]

I am guessing that a lot of them probably stayed where they were in MA if they could swing it and commuted as RI is basically a suburb of Boston anyway.

[kildorn]

The studio employed too many people for the nearby studios to fully absorb, sadly.

I could possibly say this was just a dumb deal all around and walk away if it wasn't for this month in C level management communication to the employees. You have to be a grade A shitheel to not only know you failed to pay your company's health insurance premiums, but also know you failed to have enough balance to make payroll and STILL not tell your fucking employees. You've had three weeks at the bare minimum of knowledge that you fucked up in a very real and immediate manner, and should own up to your staff about it.

The entire C level staff seem to have just checked the fuck out, and should never EVER be allowed in a C level position again (hah, fat chance) for that level of asshattery to their employees.

[Severian]

Here are the public 38 Studios documents, from the Rhode Island EDC:

http://www.riedc.com/38studios-public-documents

Loan and Trust Agreement (6.5MB PDF)
Security and Pledge Agreement (3 MB PDF)
IBM Project Monitoring Agreement and Consultant Agreements Exhibit (873 KB PDF)
Modification and Waiver to IBM Project Monitoring Agreement (107 KB PDF)
Default Letter- Keith Stokes to 38 Studios - May 4,2012 (62 KB PDF)
Motion Picture Tax Credits Letter - Keith Stokes to 38 Studios - May 8, 2012 (60 KB PDF)
Cure of Default Letter - Bill Parsons to 38 Studios - May 18, 2012 (56 KB PDF)

[Venkman]

I am guessing that a lot of them probably stayed where they were in MA if they could swing it and commuted as RI is basically a suburb of Boston anyway.

RI is really small. Providence is sort of an exurb to Boston (don't say that in person though ). Smart folks who came to 38 bought houses halfway between Providence and Boston, where the commute either way is maybe 30 minutes tops (good schools in those areas because so many people do this). The rest either really wanted coastal communities and figured they'd risk it (which makes Boston a bit over an hour drive/train time), or were moving to the east coast for other reasons as well as the job, like family usually and therefore a support base).

Not saying anyone let go has it easy. This economy is one thing. But the other is, even with Boston this area is no Austin or SF in terms of video game industry.

[Rokal]

I am guessing that a lot of them probably stayed where they were in MA if they could swing it and commuted as RI is basically a suburb of Boston anyway.

They were previously located in Maynard, MA which is only ~40 minutes from Providence. It's not the big cross-country relocation people might imagine it was.