38 Studios Possibly in Financial Trouble

Well the news didn't get any better today, as it has been revealed their CEO has been on a "leave of absence" since mid March (reason unspecified other than purportedly not being related to current events).

the word out of their camp is essentially no comment. While the state isn't really saying anything new other than they asked tough questions.

it certainly could have been worse for 38, but the odds of their MMO ever coming out are looking increasingly slim by the day. For their sake I hope 38 does something positive very soon to kill the story as this story has major legs given the public financing.

@spazmaster666:

I fully agree; the world of Amalur was totally shallow and uninteresting. Some of the area designs were really neat, but because of the perspective and lack of a first person "look" mode it was hard to really take-in those designs. This game really could have used a more flexible camera system, but even with the current camera mechanics it could have been vastly more engaging.

The side quests were a huge waste of time. This is certainly not the kind of game which rewards exploration and inquisition; I took a lengthy detour from the plot (about a third-of-the-way-through the game) to explore areas, and basically found a lot of useless junk guarded by enemies that quickly became so easy to battle that encounters were more of a hassle and a waste of time than anything else. (This was on the highest difficulty setting.) I wish I had just followed the plot quest and faction quests; my character quickly became very wealthy and so powerful that subsequent encounters just blurred together. I would rather have a few epic fights than a thousand throw-away battles any day; I wish 38 Studios had learned something about poignant enemy encounters from Demon's/Dark Souls.

This is definitely nothing like Skyrim, and I'm certainly not interested in purchasing any of the DLC.

@MonkeyKing1969 said:

My perspective from living in Southeastern Mass is that...well Rhode Island is run by mafia crime families. Anyone living is Southern New England knows that is just a FACT. Want to know why Rhode Island is talking to 38 Studios all of a sudden? Because Peter "chief crazy horse" Limone wants his cut.

I actually lived across the street from the Manocchio's for a good ten years. State always had nondescript vans parked all over, true story.

http://www.foxnews.com/us/2012/05/11/ex-ne-mob-boss-to-be-sentenced-in-strip-club-plot/

@Slag: yikes is right.

I'm not getting the Skyrim comparisons since to me KoA: Reckoning felt nothing like Skyrim. With Skyrim, the world was actually very engaging whereas with KoA Reckoning, neither the world nor the characters were in any way engaging IMO. I ended up basically just following the golden quest circle the entire game, finishing side quests that I had no interest in, skipping through the majority of the dialogue. If it weren't for the combat (which after 80 hours gets pretty tedious as well), I would have stopped playing long ago. All in all I don't think I spent more than two or three hours at a time playing it since it just got dull if you spent too much time with it at once (whereas with Skyrim, I often played it in 8+ hours chunks at the onset).

Skyrim had a great world to explore and was a game that didn't require a structured quest system to enjoy (though it certainly had a very good quest system). Whereas with Reckoning, exploring the world isn't interesting at all. Anyway, I wish 38 Studios luck but I hope their next game is more engaging when it comes to the world they create.

After reading all the different news stories, I would say 38 is definitely in big trouble. No E3 booth, seeking Bridge financing and missing loan payments with the state ain't good. Since Patrick's story it has come out that they missed a $1.12 million payment to Rhode Island this week.

plus PriceWaterhouseCooper issued a "going concern" warning for them last year, accounting firms only do that when there is a very strong probability a company will not stay solvent without a major positive change in finances for the next twelve months.

If they don't secure new financing or get restructure their loans they are probably toast.

EDIT: Apparently the payment was due on May 1 and 38 studios is now technically in default on their loan.

http://www.wpri.com/dpp/news/local_news/providence/gov-ri-working-to-keep-schilling-company-38-studios-viable?2

Rhode Island EDC is having an emergency meeting tomorrow morning, so there could be more news on this sometime tomorrow afternoon about how bad or not bad this really is. Yikes

Rhode Island trying to become the next Georgia?

@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.

Makes a bit more sense with that info.

@Vonocourt said:

@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?

That's million bucks!

Rich Gallup soon to be the newest member of the giant bomb crew lol

pull out rich before the ship sinks

My perspective from living in Southeastern Mass is that...well Rhode Island is run by mafia crime families. Anyone living is Southern New England knows that is just a FACT. Want to know why Rhode Island is talking to 38 Studios all of a sudden? Because Peter "chief crazy horse" Limone wants his cut.

@thisisdell said:

I wanna give them money! They should do a kick starter, or would that not be appropriate sense they have already started?

Buy their game NEW, and tell your friends to buy their game NEW. That is what will help them.

The biggest issue with KoA for me was that I felt no ownership of the world, and it didn't feel lived in in my opinion. I love the Elder Scrolls so much because the stories and the characters seem to truly exist in that world. It makes the game more immersive. KoA has phenomenal combat, and a pretty good (if very MMO-esque) leveling system, but if just doesn't hold my interest the way other RPGs do. I really hope their financial stuff works out though, it was still a very solid first effort.

I'll pay some more for my GB sub if it means we can bring in Rich and give him a good home~

Is anyone really shocked that Curt Schilling might not know how to manage a video game developer?

Is this thing going to go full circle now, with Rich back at giantbomb under Cnet? Haha that would be epic.

Then we'd just need Greg Kasavin to get his ass back as well.

Don't show the game you're supposedly making for years? They should've seen this coming.

RIP Rich Gallup

That sucks. Although I really feel like 38 should have seen this coming. Another cartoonish MMO style game? The only one we need already ha 10 million subscribers and they're not all that interested in switching to new stuff as every other MMO has proven thus far

What a bad day for scrum...how will they ungulate now?

btw I have a better title

ONE BUTTON JUNK

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

RIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIICH!!!!!!!

I wanna give them money! They should do a kick starter, or would that not be appropriate sense they have already started?

I thought Amalur sold well too but this maybe a case where the cost of production outstripped the success they generated.

Ambition never bodes well.

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

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.

No, sir. I don't like it.

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.

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.

@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?

Uh hoh. Time to come home Rich G.

@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.

@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.

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

@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

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.

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

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.

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.

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

:/

@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.

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

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

first clue. coming out with an mmo.

@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.

@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.

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

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.