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38 Studios Meets With Rhode Island Governor, Asks for More Money [UPDATED]

Closed-door meetings today result in little forward progress.

Requisite picture of person mentioned in news story looking concerned/sad/upset.

Since it became clear earlier this week that not all was well in the land of game development studios run by former Red Sox Pitchers based in the state of Rhode Island, little concrete information has developed on what, precisely, started the chain of events that led to a closed-door meeting between studio head Curt Schilling and Rhode Island governor Lincoln Chafee today. All we do know is that 38 Studios reportedly missed a $1.125 million payment for its $75 million loan guarantee from the state, which led to curious quotes from the governor regarding providing help to keep the company "solvent," and absolute silence from anyone at 38.

Today's meeting between reps from 38 Studios and the state government evidently did little to enlighten the subject. Following the three hour meeting today, it was only revealed that Schilling had asked the state for additional assistance. No immediate action was taken by the state's Economic Development Corporation regarding the request.

Governor Chafee is quoted as commenting "How do we avoid throwing good money after bad?" following the conclusion of the meeting. He was also said to have remarked that he has no idea if 38 Studios' current project, the thus-far-unrevealed "Project Copernicus", was on schedule or not.

The full statement from the Rhode Island EDC can be read below.

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.

UPDATE: I've added a video of the press conference that followed the event, posted by the Providence Journal. It's...pretty brutal.

Alex Navarro on Google+
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Posted by Alex
Requisite picture of person mentioned in news story looking concerned/sad/upset.

Since it became clear earlier this week that not all was well in the land of game development studios run by former Red Sox Pitchers based in the state of Rhode Island, little concrete information has developed on what, precisely, started the chain of events that led to a closed-door meeting between studio head Curt Schilling and Rhode Island governor Lincoln Chafee today. All we do know is that 38 Studios reportedly missed a $1.125 million payment for its $75 million loan guarantee from the state, which led to curious quotes from the governor regarding providing help to keep the company "solvent," and absolute silence from anyone at 38.

Today's meeting between reps from 38 Studios and the state government evidently did little to enlighten the subject. Following the three hour meeting today, it was only revealed that Schilling had asked the state for additional assistance. No immediate action was taken by the state's Economic Development Corporation regarding the request.

Governor Chafee is quoted as commenting "How do we avoid throwing good money after bad?" following the conclusion of the meeting. He was also said to have remarked that he has no idea if 38 Studios' current project, the thus-far-unrevealed "Project Copernicus", was on schedule or not.

The full statement from the Rhode Island EDC can be read below.

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.

UPDATE: I've added a video of the press conference that followed the event, posted by the Providence Journal. It's...pretty brutal.

Posted by bk

:(

Posted by Scooper

Surely if they wax Rich Gallup's eyebrow and sell it on Ebay they could raise a few bucks?

Posted by Video_Game_King

So are Rhode Island and 38 Studios in boyfriend/girlfriend territory or father/son territory? (Please don't say both.)

Posted by The_Nubster

This is really a shame, since KoA seemed to be doing some pretty interesting things. I hope everything works out for these dudes if their company does sink.

Posted by csl316

Ouch.

Online
Posted by leejunfan83

@Scooper said:

Surely if they wax Rich Gallup's eyebrow and sell it on Ebay they could raise a few bucks?

Posted by iAmJohn

I hate to be that guy, but really, who didn't see this coming? I've never thought Copernicus would ever come out, and this is pretty good evidence that it probably won't.

Posted by PopeShabooda

Just to shed a little more light on the situation, the State of Rhode Island did not loan the money to 38 Studios, but arranged for banks to make the loans, which were then guaranteed by Rhode Island. If 38 Studios is unable to keep up with its payments, the State of Rhode Island will then be forced to take on the debt.

As a resident of Rhode Island, and a developer, this news makes me very sad. I hope they can work something out, but it doesn't sound very promising.

Posted by phrosnite

This is what you get spending so much time developing a generic game. Sad but true.

Posted by RE_Player1

Looks like they'll go under soon.

Edited by Grissefar

Let's throw money at an unknown studio which has been working on an unannounced MMO for years. Surely that'll come out and blow the competition away, I mean what can go wrong?

Sure, why not? It's only tax payer money.

Posted by TheSlothKing

I hope everything works out.

Posted by DrDarkStryfe

It is becoming increasingly tough to be a AAA developer, especially one that is starting from scratch.

Posted by criacow
Governor Chafee is quoted as commenting "How do we avoid throwing good money after bad?"

Well, that sounds pretty final. Soon-to-be RIP, 38 Studios.

:(

Posted by Arrested_Developer

Well the good news is if they go under Giant Bomb probably has room to hire now.

Edited by BonOrbitz

Rich better "gallup" on outta there, doncha think?

Posted by freakin9

Time to cut down on the number of studios boys.

Online
Posted by NegativeCero

This is looking grim. At this point betting on MMOs seems sketchy.

Posted by Ares42

@Grissefar said:

Let's throw money at an unknown studio which has been working on an unannounced MMO for years. Surely that'll come out and blow the competition away, I mean what can go wrong?

Sure, why not? It's only tax payer money.

Pretty much thinking the same thing. I can't help but wonder how this deal came to be in the first place. It just seems like such a bad idea.

Online
Posted by paulwade1984

Wow. 38 studios won't even comment on the state of Copernicus to save the company. That's freaking insane.

Edited by GorillaMoPena

"I need more money"

"We can't do that Curt."

"But I helped the Red Sox finally win the World Series" [twirls bloody sock in the air]

Posted by TadThuggish

Stop making MMOs. (The gameplay is often poor, anyway.)

Posted by LoveMuffin

I'm confused, how big was the budget for The Reckoning? If they received a $75 million and whatever Curt brought to the table - did they not receive anything from Reckoning?

Posted by Rocospi

Why is this company still around? Did nobody see Reckoning?

Posted by Foggen

The only element of this that matters to me is how it will affect Rich Gallup.

Posted by Excast

$1.125 million sounds like about the cost for the dozen or so Amalur teaser videos that they came out with in the weeks leading up to that game's release.

Posted by iAmJohn

@LoveMuffin said:

I'm confused, how big was the budget for The Reckoning? If they received a $75 million and whatever Curt brought to the table - did they not receive anything from Reckoning?

Remember that they bought the studio, scrapped the game they were working on and had them start again with a very similar framework and new IP. For a studio that has been running on investment and venture capital for the past five years, that's a lot of money to spend.

Posted by Brendan

Fucking MMO's. Stop it, all of you.

Posted by Sword5

At least it didn't come out and sell poorly. Then the blame would have fallen on gamers instead of a poorly run company.

Posted by Daveyo520

Crazy

Posted by Phatmac

WHAT WILL HAPPEN TO RICH!?!

Posted by LoveMuffin

@iAmJohn: Thankyou, something seemed fishy.

@Brendan: Agreed.

Posted by FoxMulder

Vidjea Game Politics!

Posted by Sackmanjones

Now I feel bad for not buying KoA:R

Posted by Brodehouse

This just in, baseball sized holes riddle Rhode Island government windshields.

Posted by Impossibilium

Well if Rich and his wife/girlfriend want to move again, I'm sure GB could find a place for him on the next ish-ish-edition of TNT.

Posted by RedRavN

KOA was pretty damn impressive for a new IP from a new studio. I guess we all now know why they havent patched the game since launch and refuse to talk about it.

Posted by PopeShabooda

@LoveMuffin said:

I'm confused, how big was the budget for The Reckoning? If they received a $75 million and whatever Curt brought to the table - did they not receive anything from Reckoning?

Shilling's investment looks to have only been about four million, all of which he has already been paid back.

Posted by Feanor
Posted by Daveyo520

@PopeShabooda said:

Just to shed a little more light on the situation, the State of Rhode Island did not loan the money to 38 Studios, but arranged for banks to make the loans, which were then guaranteed by Rhode Island. If 38 Studios is unable to keep up with its payments, the State of Rhode Island will then be forced to take on the debt.

As a resident of Rhode Island, and a developer, this news makes me very sad. I hope they can work something out, but it doesn't sound very promising.

You forgot the "and Providence Plantations" part fellow state person.

Posted by PopeShabooda

@Ares42 said:

@Grissefar said:

Let's throw money at an unknown studio which has been working on an unannounced MMO for years. Surely that'll come out and blow the competition away, I mean what can go wrong?

Sure, why not? It's only tax payer money.

Pretty much thinking the same thing. I can't help but wonder how this deal came to be in the first place. It just seems like such a bad idea.

It wasn't a great idea, but it's one of the better ones Rhode Island has had. Frankly, that money was otherwise going to line the pockets of somebody's brother's construction and/or towing company, so I'm really not too upset that they risked it by creating some development jobs in the state.

Posted by iAmJohn

@PopeShabooda said:

@LoveMuffin said:

I'm confused, how big was the budget for The Reckoning? If they received a $75 million and whatever Curt brought to the table - did they not receive anything from Reckoning?

Shilling's investment looks to have only been about four million, all of which he has already been paid back.

That's fucked up.

Posted by PopeShabooda

@Daveyo520 said:

@PopeShabooda said:

Just to shed a little more light on the situation, the State of Rhode Island did not loan the money to 38 Studios, but arranged for banks to make the loans, which were then guaranteed by Rhode Island. If 38 Studios is unable to keep up with its payments, the State of Rhode Island will then be forced to take on the debt.

As a resident of Rhode Island, and a developer, this news makes me very sad. I hope they can work something out, but it doesn't sound very promising.

You forgot the "and Providence Plantations" part fellow state person.

Ha... I honestly thought about adding that part, but didn't want to confuse anyone. Wasn't there a vote a couple years ago to get rid of the "Plantations" part?

Posted by stinky

this angers me, the idea of tax payer money going for yet another MMO.

who would do that? (rhode island)

Posted by Autechresaint

75 Million. Let that sink in. 75 million for an mmo that never came to fruition and a stale single player RPG.

Posted by DukesT3

Maybe the Schill should get off of ESPN and actually run his company?

Posted by Daveyo520

@PopeShabooda: People try to get rid of it all the time but it never passes. It is not those plantations anyway. I just thought I would mention it since you called it The State of Rhode Island :P We sure have a long name.

Posted by PopeShabooda

@Autechresaint said:

75 Million. Let that sink in. 75 million for an mmo that never came to fruition and a stale single player RPG.

According to the local news, the $75 million was only for the MMO. Reckoning was funded with other money, and most likely did not break even.

Posted by PopeShabooda

@Daveyo520 said:

@PopeShabooda: People try to get rid of it all the time but it never passes. It is not those plantations anyway. I just thought I would mention it since you called it The State of Rhode Island :P We sure have a long name.

Just wait a few years when we're forced to change it to The State of Rhode Island and Providence Plantations brought to you by Dave's Marketplace, Benny's Tire, and NiRoPe.

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