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38 Studios Possibly in Financial Trouble

State of Rhode Island working with the studio on solving "different issues."

Kingdoms of Amalur: Reckoning didn't exactly set the world on fire, but it wasn't bad, either.

38 Studios may be in financial trouble, according to a report out of NBC 10 in Rhode Island.

"We're always working to keep Rhode Island companies solvent, and that's what we're doing with 38 Studios," said Rhode Island Governor Lincoln Chafee to the local NBC affiliate.

The state made a $75 million loan guarantee in 2010 to initially bring 38 Studios to Rhode Island, a move now under scrutiny.

It’s only been a few months since 38 Studios released its first game, Kingdoms of Amalur: Reckoning. We’ve seen nothing of the long discussed MMO set in the same universe, codenamed Copernicus.

Chafee has not yet divulged specifics, only saying it's meeting with 38 Studios on “different issues.”

The studio has not yet responded to my request for comment.

Patrick Klepek on Google+
124 Comments
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Edited by Zamir

man, Rich Gallup whores budget must be pretty big

Posted by NarcolepticBat

So much Rhode Island in such a small article, feels good to be a rhody right now!

Posted by Lukeweizer

Rich Gallup to Giant Bomb?

Posted by Mumrik

Does this mean that Reckoning flopped?

Posted by MeldingPlague

@ZombiePie said:

The article should mention how the state loan of $75-million (60% of the state's high tech loan budget at the time) to 38 Studios came with the promise that 38 Studios would bring 450 jobs to the state by the end of 2012. The promise was nonbinding but probably set expectations for the state. Now that it is 2012 my guess is that 38 Studios is far from that promise and the state is re-examing their loan, which the studio is reliant on to keep it active. Hence the rumors of financial trouble.

Very observant. Thanks for posting that info. Makes me wish there was some kind of rated comment system in place so that comments like this wouldn't get buried.

Posted by TzarStefan

@LooseChange said:

I think after Skyrim there was fantasy open world fatigue. Thats what my friend told me anyways, he'd buy this game but after playing the hell out of Skyrim he was burned out on that type of game.

Your friend speaks the truth.

Posted by Gabriel

@jeffrud said:

@ZombiePie said:

The article should mention how the state loan of $75-million (60% of the state's high tech loan budget at the time) to 38 Studios came with the promise that 38 Studios would bring 450 jobs to the state by the end of 2012. The promise was nonbinding but probably set expectations for the state. Now that it is 2012 my guess is that 38 Studios is far from that promise and the state is re-examing their loan, which the studio is reliant on to keep it active. Hence the rumors of financial trouble.

I wish I could upvote this.

eww a Reddit user, kill it with fire.

Posted by brownsfantb

Huh, I figured Reckoning had sold pretty well considering it's still hovering around $50 for a new copy. Maybe it didn't sell good enough?

Posted by adoggz

@ZombiePie said:

The article should mention how the state loan of $75-million (60% of the state's high tech loan budget at the time) to 38 Studios came with the promise that 38 Studios would bring 450 jobs to the state by the end of 2012. The promise was nonbinding but probably set expectations for the state. Now that it is 2012 my guess is that 38 Studios is far from that promise and the state is re-examing their loan, which the studio is reliant on to keep it active. Hence the rumors of financial trouble.

useful information here from Zombie "Scoops" Pie.

Posted by laserbolts

KoA was pretty shit but it would be sad if they had to shut down.

Posted by Zelyre

@captain_clayman said:

Well, there's always money in the banana stand.

NO TOUCHING! NO TOUCHING!

Posted by criacow

Too bad. I really enjoyed Reckoning, and when you consider it's the first game they've relased, it's really quite good.

Ditch the MMO. Nobody cares. Make another, even better, game.

Posted by Lurkero

Hey governments, stop playing favorites with unknown business ventures. You are very likely to get hurt.

I am still interested in Amalur, but there was nothing about it that made me have to jump at a release date purchase. I'll get it eventually because the combat looks fun.

Edited by august

@criacow said:

Too bad. I really enjoyed Reckoning, and when you consider it's the first game they've relased, it's really quite good.

Ditch the MMO. Nobody cares. Make another, even better, game.

They've spent years and untold millions of dollars on said mmo.

To be honest, I don't think they'll be around to release another game.

Posted by Rapid

Ouch Amalur wasn't a bad game... I hope they still will be financially sound enough that it doesn't throw the MMO under the bus... just remembering what happened to that Warhammer 40K MMO which become single player because they couldn't fund it.

Posted by Sunspots

I ordered Kingdoms of Amalur off of Amazon about a week ago and it came in the mail today. I'm gearing up to play the game now as I read this. I find it to be an amusing coincidence.

Posted by DeanoXD

I didn't think reckoning was very good, so this news isn't all that surprising to me. Plus putting your future in the basket of a fantasy MMO doesn't seem very smart either.

Posted by probablytuna

Hmmm, thought the game sold well? Anyways, hope it will be ok for the company.

Posted by Jayzilla

why are people bummed about this if they didn't like the game? it's all fine and good if you really enjoyed the game, but you shouldn't stay in business if you can't make a good game. with the pedigree of talent that studio had that game should have been AMAZING and you know what? It wasn't amazing. Not even close.

Posted by FoxMulder

Enjoyed the Reckoning demo, but not enough to drop $60 on it. Skyrim's world may be superior, but I liked the look and charm that Reckoning's did. Shame it didn't come out before Skyrim so that it wouldn't have been so overshadowed by it' similar wrappings.

Edited by vinsanityv22

I will pick up Kingdoms of Amalur when it gets cheaper. Frickin' game came out MONTHS ago and it's still $52 bucks. It should be $30 or AT LEAST $40 by now. Especially since the game has DLC. Games are supposed to depreciate in value unless they continue to sell; who do you think you are, Kingdoms of Amalur? Mario Kart?

EA is asleep at the wheel. They could keep moving units if they knocked the damn MSRP down every few weeks like they're supposed to. EA is a frustrating company; they really only support mainstream shit like Mass Effect and Dead Space and Medal of Honor. Even though they release more interesting titles like Brutal Legend, Mirror's Edge, Shadows of the Damned and Kingdom of Amalur, they just don't get the same promotion and support. And then studios suffer. You're probably getting pretty worried now Funcom; between The Secret World and Old Republic, which game do you think is a priority for EA? Secret World is going to get tossed under the bus like Warhammer.

Good luck 38 Studios. Make more single player games; screw the MMO. Sorry Curt Schilling; I know you dig 'em.

Edited by PenguinDust

Kingdoms of Amalur: Reckoning sold at least a million copies, but MMO's...them things will eat you alive. Here we are so many years afterwards and what have we seen of this project? How can it compete against all the other fantasy MMO's already around plus Guild Wars 2 and The Elder Scrolls Online? Hell, THQ scraped the MMO part of their announced Warhammer 40k game. They've got other troubles but it doesn't change the fact that MMO's are expensive and risky.

Posted by k4el

Do we have sales stats on KOAR yet?

Posted by Ramone

I didn't like KoA but Rich is a good guy and I assume there are a bunch of equally good and talented people at 38 studios so I hope they make it through this.

Posted by benspyda

Overall I enjoyed Reckoning but the narrative and back story were so dull/generic that my interest for the mmo or anything else in that universe has diminished greatly. Although it would suck if they were to close down, I think if their mmo would eventually come out it would fail unless it was revolutionary in some way.

Posted by artgarcrunkle

@k4el: 330k copies estimated sold. Which isn't enough for a game with a bloated AAA budget lol videogame industry.

Edited by benspyda

@artgarcrunkle said:

@k4el: 330k copies estimated sold. Which isn't enough for a game with a bloated AAA budget lol videogame industry.

That was the first month in the US only.

Posted by jakob187

@ZombiePie said:

The article should mention how the state loan of $75-million (60% of the state's high tech loan budget at the time) to 38 Studios came with the promise that 38 Studios would bring 450 jobs to the state by the end of 2012. The promise was nonbinding but probably set expectations for the state. Now that it is 2012 my guess is that 38 Studios is far from that promise and the state is re-examing their loan, which the studio is reliant on to keep it active. Hence the rumors of financial trouble.

Well put.

Also, I think some people in this comment section need to understand a few things about KoA in general before trying to drive nails in the coffins.

1. KoA sold 330k in its first month, which is pretty big for any new IP in its first month. If those sales numbers would follow typical projections, then it would mean the two to three month sales numbers should be close to 1m...plus any revenues off the two DLC packs they've released. If they have sold 1m copies, it would mean that they've more than made back the budget on the game...

2. ...unless part of acquiring Big Huge Games was including paying on whatever they had already developed of what became Reckoning, as it was being "refurbished" from previous content they had created somewhere else to become this new game through 38 Studios. If that's the case, then 1m copies would not result in the game being a profitable success.

3. Anyone screaming about EA needs to realize that this was an EA Partners deal, which does not apply the same type of rules that a pure EA title carries with it.

4. If the problem is what ZombiePie has stated in this post, that does not mean that the studio is in a possible state of closure, but instead a state where they have to realign some money and make sure they are either paying off that loan or holding up to the promise.

____________________

tl;dr version of all that: Kingdoms of Amalur: Reckoning is still selling, the studio is still open, and this is about something we're not sure of....so stop saying your R.I.P. pieces.

Posted by stinky

first clue. coming out with an mmo.

Posted by dvorak

This is what happens when you work on an MMO for like 6 years and don't even tell people what it's called.

Posted by MrKlorox

How totally expected. Maybe you should talk about your game and build some hype before it vaporizes.

Posted by iAmJohn

@Gabriel said:

@jeffrud said:

@ZombiePie said:

The article should mention how the state loan of $75-million (60% of the state's high tech loan budget at the time) to 38 Studios came with the promise that 38 Studios would bring 450 jobs to the state by the end of 2012. The promise was nonbinding but probably set expectations for the state. Now that it is 2012 my guess is that 38 Studios is far from that promise and the state is re-examing their loan, which the studio is reliant on to keep it active. Hence the rumors of financial trouble.

I wish I could upvote this.

eww a Reddit user, kill it with fire.

We used to have upvoting before Dave and co. axed it from one of the redesigns for a basic flagging system, you hooligan. Kids these days.

Posted by North6

1 million copies sold at $60 each. $75 million dollar loan.

:/

Posted by alsepht

This totally blows. KoA:R was fun and I would've really liked to see some more stuff come out of this studio aside from another MMO that would've gone f2p in a couple months anyway.

Posted by cooljammer00

No fucking shit. This is what happens when you barely release a game and act so damned coy about your product, the very thing keeping you in business.

This means you, Rich Gallup.

Posted by Cold_Wolven

I enjoyed KoA and would like to see more sequels for the IP so here is hoping for 38 Studios to stay open.

Posted by DJJoeJoe

The whole time the studio has been saying they were going to do an mmo before their first game was even out I was wondering why they would even consider doing that, it just seems like an extremely unsound business idea to try and do an mmo without any sort of interesting concept (I think their interesting concept was their world/lore stuff.... whoopity do you have elves and everything other games have).

I hope the studio finds it's proper way out of this mess, and I am hoping they say they are scrapping the mmo crap and going to make a real feasible game for a decent chunk of money that can actually be good, rather than promising something that can tear their studio apart for tens of millions of dollars with ZERO chance of profit.

Posted by McShank

@Cold_Wolven said:

I enjoyed KoA and would like to see more sequels for the IP so here is hoping for 38 Studios to stay open.

bring em to western washington! cheap living and they can join the other 100 or so studios here :D

Posted by PatchMaster

Man, I really wanted them to do well. Now I kinda feel bad for waiting on a price drop for KoA.

Edited by jakonovski

@PatchMaster said:

Man, I really wanted them to do well. Now I kinda feel bad for waiting on a price drop for KoA.

Don't feel bad, you're not a charity. If you were facing financial trouble you'd receive far less assistance than 38 Games has so far.

Posted by ZenaxPure

@jakob187 said:

1. KoA sold 330k in its first month, which is pretty big for any new IP in its first month. If those sales numbers would follow typical projections, then it would mean the two to three month sales numbers should be close to 1m...plus any revenues off the two DLC packs they've released. If they have sold 1m copies, it would mean that they've more than made back the budget on the game...

Do you mean worldwide, or in North America? While we don't know PC sales obviously (which may be a large chunk idk) it's pretty safe to say based on what little NPD data we have that KoA is no where close to 1 million in North America. World wide it's more likely, but iirc it fell off the charts pretty darn fast in PAL land too.

As for everything else, who knows. The more devs that fall the more sad this generation gets, so hopefully they are fine.

Posted by Hilts

Uh hoh. Time to come home Rich G.

Posted by Vonocourt

@North6 said:

1 million copies sold at $60 each. $75 million dollar loan.

:/

Don't know exactly what you're trying to get at there?

Posted by bhhawks78

I thought KOA was one of the most boring games I've played all generation, and probably the worst art.

That said I like Rich and never want people to lose jobs unless they are evil or something.

Posted by gunstarhero

Shame I really enjoyed reckoning so much I bought a copy for my brother and dad and thay loved it as well shocked it did not sell well.

Posted by Carlidus

No, sir. I don't like it.

Posted by Grognard66

I think some of you are getting confused. KOA: Reckoning was made by Big Huge Games in Maryland, which was purchased by 38 studios; the game was well into development when they got bought and it was adjusted to the KOA universe towards the end of development. KOA:Reckoning was likely profitable on it's own.

However, the financial troubles for 38 studios most likely stem from the fact that it's taking them forever to launch their primary product, the KOA MMO. They've had hundreds of employees in New England working for years without a single product to show for it. Sadly, the MMO model they founded the studio on is dwindling as Free-to-play is the favored model now and this is likely impacting their forecasts, leading to this crises.

Posted by Lydian_Sel

It's not very surprising, though disappointing to think of the ways this will effect their staffing and possible development in the near future. Even though I have negative interest in playing an MMO I wish them the best & hope that their product is quality.

Posted by Svenzon

That's a shame. I hope they pull through. Would love to see a sequel to Reckoning!

Posted by dr_mantas

Ambition never bodes well.

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