Giant Bomb News


38 Studios Skips Payroll in Favor of Paying Back State [UPDATED]

Workers go unpaid as the studio works to make its owed $1.125 million payment to the state of Rhode Island.

38 Studios head Curt Schilling being accosted by reporters following yesterday's meeting with the Rhode Island EDC.

Coming on the heels of yesterday's circus-like meeting and press conference regarding the developing situation at 38 Studios, WPRI is reporting that the company is in the process of paying its overdue $1.125 million payment to the Rhode Island Economic Development Corporation, but is doing so at the expense of its own employees.

Current reports state that 38 skipped payroll this week, leaving the more than 300 full-time employees at the company without a paycheck. In addition, a source has told Joystiq that all temp and contract employees had been let go as of this week.

In the wake of the situation at 38, Keith Stokes, the executive director of the RIEDC since 2010 and architect behind the $75 million loan that brought the studio to the state from Massachusetts, has resigned.

38 Studios still has yet to comment publicly on the situation.

UPDATE: Just when you thought this whole thing couldn't get any worse, WPRI now reports that the check 38 Studios reps hand-delivered to the RIEDC has been returned due to insufficient funds.

Alex Navarro on Google+
267 Comments Refresh
Posted by nERVEcenter

Kingdoms of the Northeast: An Online Rhode Island Adventure

Various fantastical beings and magics have emerged in Rhode Island! Stop an invasion of evil armed, immortal Republicans at its source, helping your esteemed Rhode Island representatives stem the tide at the source and ensure the fair distribution of all taxpayer loans!

This project funded and endorsed by your friendly State of Rhode Island and Providence Plantations Economic Development Corporation.

Posted by Ehker

When Alex Navarro doesn't have a single sarcastic tone or joke in a news story, you know it's serious.

Posted by fini_fly
Posted by wisdumcube

Things aren't looking good.

Posted by George_Hukas

@Jellybones said:

It's kind of amazing to me that this is legal.

Then again, laying everybody off would be perfectly legal..

Posted by Little_Socrates

This sucks. Good luck to employees of 38.

Posted by pickassoreborn

That's the worst. I was laid off the day before payday and - yep - no pay for that month. Horrible situation. Best of luck to those affected, sounds like management have fucked it up again for those who really matter.

Posted by ahgunsillyo

When Alex Navarro doesn't have a single sarcastic tone or joke in a news story, you know it's serious.

Nail on the head.
Posted by DukesT3

So its legal to not pay your employees? Something doesn't seem right with that...

Posted by RedRoach

There's no way they're going to survive this. They're struggling to make payments now and that MMO is a long way off. They can't pay their employees and they're not going to have a revenue stream in the near future. I'd be surprised if they last 1 more month. Everyone's to blame here, RI should've known this would be a long term investment. They should've known they weren't going to see that money until Copernicus came out. And 38 is damn near retarded for making an MMO as their first game. MMoO's are just so massive that you need to build up a nice big cash pile before you can consider taking on such a huge task.

Posted by Lukeweizer

Poor Rich and Bob. And everyone...

Posted by JohnDudebro

38's completely boned, then.

Sorry, Rich and Ben! Hope you land on your feet!

Posted by Ehker

OK, WTF is going on? 38 Studios hand-delivered a check that didn't have sufficient funds.

Separately, Governor Chafee's office said 38 Studios hand-delivered a check for the overdue $1.125 million payment to the EDC that set off this week's crisis. However, shortly thereafter Rick Wester, its chief financial officer, called the agency and said there were insufficient funds to cover it. The EDC then returned the check.

Posted by PatchMaster
Posted by RedRoach

@Zaxex said:

Video game development shouldn't be this risky. It's common to hear people getting fired or studios closed because a game didn't sell as well as they would've liked.

The medium seems to be growing, I just hope that it becomes more sustainable.

It's not this risky. This happened because there were some seriously dumb decisions being made. MMO's are massive, the most expensive games to make without a doubt. You need to have a shit ton of money before you can make one. 38 should've made 3 or 4 regular games and built up some cash. They should have payed off that loan and had a sizable amount of money before undertaking a massively expensive project like an MMO.

Posted by YetiAntics

No wonder I haven't heard from Shilling on ESPN Radio recently...

Posted by theveej

Feel bad for the guys at 38 studios, feel really bad for Rich. I'm sure the door is open for Rich to comeback to gaming websites if he wants to, but seemed like he had bigger ambitions

Just wish the best for everyone involved in that studio, hopefully the damage can be minimized.

Posted by fini_fly

@PatchMaster said:

@fini_fly said:

I wonder if Curt Schilling could just pay the employees from his baseball earnings.

I'm pretty sure he already put his life savings into the studio . Just another thing that sucks about this situation.

I wonder how much he put into it in all honesty.

Posted by Ehker

Hey, new news, guess who got removed from the 38 Studios website?

Posted by Cincaid

@Legend said:

@laserbolts said:

Even though Amalur was shit I do feel bad for the people at 38. Hopefully they can bounce back.

I still haven't played it myself, but if the reviews are any indication, Amalur actually seems to be a pretty good game.

It did a lot of things right, but a lot of things mediocre as well. Would definitely not go as far as calling it "shit", but different tastes etc.

Posted by Epsilon82

Wow...this is the worst possible thing to happen. Especially with no light at the end of the tunnel. What are they thinking, that they're going to just not pay people every month?

So the state gets theirs, Schilling gets his, and the rank and file who actually do the work get nothing. Sounds like 21st Century America in a nutshell.

Posted by Phatmac

Man… this sucks.

Posted by IndeedCodyBrown

Oh god Klepek needs to explain the on Bombcast.

Posted by Jayzilla

I hate to say it cuz i like rich and ben and schilling, but that game should have been AMAZING with the stable of talent they had working on it. That game wasn't amazing and that is why it had mediocre sales.

Posted by Napalm

@alternate said:

Delaying payroll could be a valid, if desperate, tactic if they were close to shipping the game but with no sign of income in the near future it is just postponing matters at the expense of working stiffs.. Also 300 full time employees is just rediculously over ambitious for a first time project.

This is what I was thinking as well. Not only that, but making their second project some giant MMO? I don't know. You kind of have to work up to something like that. This is really bad, though.

Posted by coribald

@Ehker said:

Hey, new news, guess who got removed from the 38 Studios website?

Oh dear.

Posted by CatsAkimbo

I knew someone who moved to Rhode Island with his family to work there... I haven't spoken to him in a while, but this news makes me worried for them. It's never good to miss a paycheck.

Posted by coribald

What is this gonna mean for Big Huge? They're a subsidiary of 38 now, right?

Posted by tourgen

this situation smells like ass from every angle

Posted by freakin9

Now the check bounced.

If the MMO is even half as entertaining as this gong show then they've got a GOTY contender.

Posted by Daveyo520

@Dallas_Raines said:

@depecheload said:

Skipping payroll means you're boned. No ways around it. This is it for them. Looks like Rhode Island is going to own the rights to Kingdom of whatever the heck it's called.

This is what happens when you borrow a fuckton of money and barely release anything. A revenue stream is kind of a vital part of any business.

The State of Rhode Island Presents: Kingdom of Amalur: Rekoning - Copernicus Online

The State of Rhode Island and Providence Plantations Presents: Kingdom of Amalur: Rekoning - Copernicus Online

Yes it is even longer than you thought.

Posted by SexualBubblegumX

Holy shit o.o

Posted by Zamir
Posted by DrStrangepork

Sad to hear, its never a good thing to have someone go without a paycheck. Hopefully this ship can be righted.

Posted by MildMolasses

I see a few people blaming the state for this mess, which seems quite harsh. They were given a loan to go to RI to create jobs and tax revenue. I would assume by the size of the loan, that 38 was making some fairly big promises to the government which ultimately they didn't follow through on. I think the problem here is that 38 reached to high and were to mismanaged to do what they needed too. They've been working on that MMO far too long to have not even shown off a screenshot yet

Edited by Ehker
Posted by supercubedude

Hurry, to Kickstarter!

Posted by AllanIceman

Maaannn! Hope Rich and those folks get through this. Bummer.

Posted by RadixNegative2

Why do I find this hilarious?

Posted by Mesklinite

That is not cool :(

Posted by PokeIkzai

This whole situation is so sad. It seems like an honorable decision on part of that entire team, however.

Posted by ModernAlkemie

Quick, are there any duders that can let Rich Gallup crash on their couch?

Posted by TomA

Now's the time to start stealing office supplies. Grab what you can and gtfo before it all goes to shit.

Posted by mrpandaman

@RadixNegative2 said:

Why do I find this hilarious?

I don't know... why do you?

Posted by MEATBALL

This is such a bummer of a story.

Posted by SmasheControllers

That fucking sucks, how are they suppose to make that much money? What if everyone buys three copies of KOA: R, or does that money go to EA?

Posted by nickux

This is tragic. It's sad to see Big Huge Games will be hit so hard by all of this. They at least shipped a game and a good one at that. I guess not shipping that MMO proved fatal. But it seems by the looks of things there were some serious fuck-ups running the show.

Posted by Karkarov

Damn this sucks period. In a way they got hosed because they were forced into hiring far more staff than was ever going to be needed but at the same time they need to deliver the payments promised not to mention pay their people. I thought amalaur did pretty well so why did so little of the profit make it back to the people who actually made the game and own the license?

Posted by BPRJCTX

Quick GB Crew, grab Rich and RUN!!!

Posted by Nightriff

This situation has gone to shit, sad to see it happen...can we get more activision conspiracy to make me feel better?