38 Studios bankrupt

[Nadia]

http://www2.turnto10.com/business/2012/ ... r-1036440/

Kingdoms of Amalur: Reckoning dev may be in trouble - Report
http://www.gamespot.com/news/kingdoms-o ... rt-6376803

In 2010, Rhode Island's Economic Development Corporation secured a controversial $75 million in loans to entice 38 Studios--founded by former Major League Baseball pitcher Curt Schilling--to relocate from Massachusetts to the Ocean State.

Governor Chafee called this investment one with "some amount of risk," but has not offered much in the way of specifics regarding the future of 38 Studios, saying only, "We're working with 38 Studios on different issues. That's all I can report right now."

A separate report today at Rhode Island news outlet WPRI indicates that if 38 Studios goes under, state taxpayers will be on the hook for $112.6 million (principal plus interest on the $75 million in loans), spread through 2020.

As of press time, neither Electronic Arts nor 38 Studios had responded to GameSpot's requests for comment.

Kingdoms of Amalur: Reckoning is the first title from 38 Studios. It won a strong critical reception upon release in February and sold 330,000 copies in the United States across the Xbox 360, PlayStation 3, and PC, according to NPD data. Additionally, a sequel is in the works.

[Nadia]

http://massively.joystiq.com/2012/05/16 ... y-meeting/

Update: Joystiq reports that "it appears 38 Studios put up all present and future IP by the company as collateral," meaning that if the studio defaults, the state of Rhode Island will own all of its game assets

.

38 Studios and the ‘Job Creator’ Logic
http://www.rifuture.org/38-studios-and- ... logic.html

http://boingboing.net/2012/05/16/the-de ... -deve.html

[Nadia]

Schilling’s firm may get more aid
http://www.boston.com/businessupdates/2 ... story.html

Chafee said 38 Studios did make the $1.1 million payment on Friday, potentially clearing the way for the firm to receive millions of dollars in additional aid under the state’s film tax credit program, which is open to video game companies.

Under the program, video game companies can seek reimbursement for up to one-quarter of their expenses in the form of state tax credits, which companies can then sell to other firms for cash. Chafee indicated the company appears to be eligible for $2.1 million in tax credits for 2011.

On Friday, 38 Studios applied for an additional $6.5 million in tax credits for the same year, which the state is now reviewing. The company has also indicated it may seek another $12 million in state tax credits for the year 2012.

http://www.wpri.com/dpp/news/politics/l ... 38-studios

[Nadia]

38 Studios and Big Huge Games lay off entire staffs [update]
http://www.joystiq.com/2012/05/24/38-st ... re-staffs/

38 Studios passes second mortgages onto some former employees
http://www.theverge.com/gaming/2012/5/2 ... -employees

Some of the hundreds of 38 Studios employees laid off yesterday were hit with a second round of bad news this week when they were told by banks that homes they thought the company had sold for them hadn't been and that they may be stuck with a second mortgage, Polygon has learned.

RA Salvatore says his piece
http://gamebanshee.com/news/108268-ra-s ... risis.html

I shouldn't even be commenting here.

Reckoning sold over 1.2 million units, which is pretty amazing for a new IP on an entirely new engine. I'm not going into the details of the publishing contract with EA (don't really know them), but let me just say that the economics of the video game business are a lot more convoluted than multiplying the MSRP * Units and coming up with a cash/cash-flow number.

Caveat: I am not an employee, an officer, a stockholder or on the BoD for 38 Studios. I've worked with them since 2006 on a consulting basis and believed in the project (and still do) - so much so that all of my compensation is on the back end. Maybe I'll never see a dime for those hundreds of hours, but I got the chance to work in the most incredible creative environment you can imagine. So be it.

And...38 didn't go begging for a handout from Rhode Island...Rhode Island offered to secure a bond for them when the credit crunch reigned, trying to lure them out of Massachusetts.

Say what you want about the rest of it - I'm not going to comment - but I have to tell you that this was an amazing team of designers, engineers, artists, animators, writers, audio team and all the rest, all chasing a common dream - all pushing the envelope in their respective fields. And this game is much further along than is being reported - I wish I could show you some if it! - and the environments, the animations and the game-play would blow you away.

The MMO market is very different now than it was 6 years ago. Star Wars is aching, by all reports, and it's a solid game with groundbreaking voice-over work. EA bought Mythic, and Warhammer crashed. Bioware's MMO is hurting (they just laid off a bunch of people in their Austin Studio).

Curt and I never agreed on politics, but that didn't define our time together. We'd argue, laugh, shake our heads behind each others' back, and carry on. And if this means anything to any of you, let me assure you that the vast majority of the employees of 38 make ME look like a rabid right-winger, the bunch of anarchists! And lord, I love 'em all and miss them already.

...

But you don't have all the facts, and some are important.

Are you mad at Obama for taking a huge risk with Solyndra? Or at Massachusetts for taking a huge risk with Evergreen Solar?

What about the huge risk Massachusetts took with the bio-med field, which paid off in tremendous dividends?

I'm not trying to be snarky here, but RI was trying to create a game hub in Providence - Hasbro is there (and is the state's largest employer). Take a look at the success that is Austin, TX, or the huge game hub in Eastern Canada, heavily subsidized.

Take a look at how much Louisiana is pouring into movies to attract studios to New Orleans. Another risky business - did I just read that Disney wrote off something like $175 million on "John Carter"?

And here are a couple of other facts - since they're reported, I can repeat them here (but again, I know only what's been reported, repeatedly): Rhode Island doled out around $49 million of the $75 - the rest is still there, and 38 Studios had already generated nearly $20 million in revenue for the state. Yeah, it's still going to sting.

http://blogs.wpri.com/2012/05/25/salvat ... -you-away/

Salvatore is due to receive $1.46 million from 38 Studios in October under the terms of a consulting agreement he signed with the company in 2007, according to a bond disclosure notice obtained by WPRI.com. He is also eligible to earn up to $5 million in royalties from net receipts of “Reckoning” and other 38 Studios products.

[Freecare Spiritwise]

Who would've guessed that a baseball player would have problems running a software company.

[Kulaf]

He wasn't running it, Jennifer Maclean was the CEO. Here is her BIO:

Ms. MacLean came to 38 Studios from Comcast, where she served as Vice President and General Manager, Games, responsible for management of all games products, strategy, and business development for the United States' largest cable company. She also held roles in sports and entertainment as part of Comcast's interactive team, negotiating and managing partnerships with Fox Sports, Major League Baseball Advanced Media, Real Networks, and Microsoft.

Ms. MacLean's extensive and varied experience in online content and interactive entertainment began in 1992 at Microprose Software. She joined AOL in 1996, where she held numerous positions in the AOL brand programming division, including Programming Director for the Games Channel. While at AOL, Ms. MacLean managed multiple partners and products, including Electronic Arts, Kesmai, Engage Games Online, and Mythic Entertainment.

Ms. MacLean earned a BA in international relations from Johns Hopkins University and an MBA with a concentration in international business from the Columbia Business School. She was named one of the "Game Industry's 100 Most Influential Women" by Next Generation, one of the "Top 20 Women in Games" by Gamasutra, and is a frequently-requested speaker at interactive entertainment industry events.

[Freecare Spiritwise]

Haha she puts AOL on her resume

[Nadia]

its official

Schilling's 38 Studios declares bankruptcy; law enforcement investigating
http://news.providencejournal.com/break ... -decl.html

related news stories
http://news.providencejournal.com/break ... udios.html

[Nadia]

Schilling owns up to his many mistakes at 38 Studios, blindsiding employees
http://www.gamasutra.com/view/news/1729 ... loyees.php

Rhode Island possesses 38 Studios' games, looks to sell
http://massively.joystiq.com/2012/08/09 ... s-to-sell/

The court granted the state of Rhode Island all of 38 Studios' assets, including rights to its single-player RPG and the unfinished Project Copernicus.

The Rhode Island Economic Development Corp said that it will attempt to sell these assets to recoup as much of the loan made to the studio as possible.

[Kulaf]

There an IP up for sale.....SOE where are you?

[Kulaf]

You know, after thinking about this for a bit.....it's really an awesome opprtunity for some larger Dev house. You have a game that is likely 80-90% complete......just got a ton of exposure in the gaming community due to the fiasco that was 38 Studios. Have out of work Devs that could be snapped up and a building to house it all in if you wanted to start an East coast office. The game is likely only a year from release and if someone snapped up the whole package for say.......25mil, that is a total bargain.

[Fallakin Kuvari]

You know, after thinking about this for a bit.....it's really an awesome opprtunity for some larger Dev house. You have a game that is likely 80-90% complete......just got a ton of exposure in the gaming community due to the fiasco that was 38 Studios. Have out of work Devs that could be snapped up and a building to house it all in if you wanted to start an East coast office. The game is likely only a year from release and if someone snapped up the whole package for say.......25mil, that is a total bargain.

Especially since there were people waiting on the game after enjoying the Single Player game they put out in the same universe.

[Bahd Zoolander]

Based on what I've heard, 80%-90% complete is an overly optimistic estimate. It'll be interesting to see what happens, but I'd guess anyone with the money and development team to attempt to finish the game would be smart enough to see it's throwing good money after bad.

[Ddrak]

Based on what I've heard, 80%-90% complete is an overly optimistic estimate. It'll be interesting to see what happens, but I'd guess anyone with the money and development team to attempt to finish the game would be smart enough to see it's throwing good money after bad.

Ninety-Ninety Rule

It would be extremely risky to pick up the IP without assuming anything more than a 10-20% gain on development of a new game from scratch. I doubt we'll see it sell for much.

Dd

[Freecare Spiritwise]

Based on what I've heard, 80%-90% complete is an overly optimistic estimate. It'll be interesting to see what happens, but I'd guess anyone with the money and development team to attempt to finish the game would be smart enough to see it's throwing good money after bad.

Ninety-Ninety Rule

It would be extremely risky to pick up the IP without assuming anything more than a 10-20% gain on development of a new game from scratch. I doubt we'll see it sell for much.

Dd

I was thinking the exact same thing, Dd. The last 10% of a software project takes 90% of the development effort.

[Bahd Zoolander]

One other stumbling block is that as far as I know they were still using Unreal Engine 3 for the client and BigWorld for the server.

Unreal has never been designed to work well in a MMO environment although there have been some people crazy enough to try with some success, like Vanguard, DC Universe, Lineage II, and Tera, but for the most part there are better choices.

BigWorld hasn't really been used for any big name games other than World of Tanks (Planes, Boats, Moms, etc.) and they just got bought by Wargaming.net. I would assume whatever license 38 had to use the engine would remain intact, but it's not usually a good situation to be in when something like this happens. Even with the best intentions the games made by the new owners are going to greatly influence the direction the engine goes in and probably get most of the support. You can look at how fast people abandoned Renderware when EA bought it and how much complaining there is about how Unreal supports what Epic needs first and what licensees would like later.

I had a recruiter try and hook me up with 38 several years ago and as soon as I heard what they were planning on doing I bailed on the process. I had just done some work on an Unreal + BigWorld mashup and didn't want any more of that. We made it work, but it wasn't very pretty. I can imagine that going from the demo stage to something that would scale to thousands of players would have been a mess. That company also ran out of money and fell apart, so we'll never know.

[Ddrak]

As an aside - where can I sign up to World of Moms?

Dd

[Nadia]

story continues
http://massively.joystiq.com/2013/05/20 ... me-assets/

the state is getting ready to sell 38 Studios' assets, including its games.

Rhode Island is looking to recoup some of it $130 million debt that it fell into once 38 Studios went belly-up. One of Rhode Island's lawyers says there "is interest" in the studio's assets, including concept art, design documents, and computer software. The sale of 38 Studios' IP includes the Amalur franchise, which encompassed the Project Copernicus MMO.

The state is also set to begin a lawsuit this week against former 38 Studios execs, including founder Curt Schilling.

The suit claims that the executives did not inform the state when they knew that the studio would have a hard time keeping afloat financially. Schilling has asked the judge to dismiss the suit.

[Nadia]

Lawyers begin arguments in 38 Studios lawsuit
http://news.providencejournal.com/break ... wsuit.html

[Nadia]

Rhode Island looking into dropping 38 Studios debt
http://www.gamesindustry.biz/articles/2 ... udios-debt

RI's current administration is exploring the cost of not paying back lenders

Rhode Island governor Lincoln Chafee is looking into the costs of not paying back the money owed to lenders due to the collapse of 38 Studios. Gov. Chafee still believes that the state must pay back lenders, with Chafee spokeswoman Christine Hunsinger telling the Providence Journal that the administration is merely gathering data "to understand the ramifications of what that decision would be."

Hunsinger said that the state has been gathering information for several months.

Rhode Island is on the hook for $112.6 million in total: $75 million for the initial loan and $37.6 million in interest. Chafee's proposal is to pay back the total over 10 years, with a first payment of $2.5 million and following installments of $12.5 million.