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

I've never liked Curt Schilling for sports and political reasons. But I hope this work out for the sake of the 300+ employees.

This really has gone from bad to worse.

Kingdoms of Amalur MMO Kickstarter inbound.

That's just wrong on so many levels.

The check to the state bounced even after skipping on payroll? Ouch.

300 employees?!?

god damn, this is god damn tragic...

I hope all the employees the best of luck. They made a great game (I thought so anyway) and deserve better than this.

If I were an employee of 38 studios, I'd be on the hunt for another job. ASAP. Really, I thought that a company not paying their employees was downright illegal under any circumstances?

No jokes needed here, its just sad.

@BlackLagoon: @Claude said:

You never bet on your favorite team. In Curt Schilling's case, that's MMOs.

But that's unpossible! He's a government-hating, freedom loving libertarian!

Now while I feel sorry for kers, I thought Curt was self reliance. Ah Hypocrisy. Now really are any of you surprised this happened? This game has been in development for and no hint or hide of the game.ANd it's a MMO in the everquest model. It is not looking good. Now I like reckoning and hope it get's a properer sequel. I say scrap the mmo and make a multiplayer and do multiplayer dlc things. Because the mmo was NOT a good look.Hopefully the staffomething done for thes out. If they got talent they will find a new job.

All right, who got that money, and which way did they go?

Something is very fishy!?

@Winternet said:

Nooooo. Rich needs to get to E3 and show on the bombcast . . . and get paid, of course.

Indeed.

I hope things go well for the folks there, but KoA was kind of disgusting with how it ripped off mechanics from the games it claimed to be "inspired by," so I'm finding it hard to find a lot of sympathy in my heart for the studio's situation.

This is just really sad. Hopefully the employees can land on their feet. After all of this goes down, I truly wonder what state that supposed MMO is in. I'd be truly interested to learn exactly what has been going on around it and how nothing was ever announced regarding it.

rich should just come to giantbomb

@jazin said:

rich should just come to giantbomb

He can take over as senior anime editor for Brad.

Whoa. Things are pretty messed up over there.

@BlackLagoon said:

@fini_fly said:

@PatchMaster said:

@fini_fly said:

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

http://www.baseball-reference.com/players/s/schilcu01.shtml

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.

Apparently his investment in the studio was $4 million, which he repaid himself with the money from Rhode Island. Looks like he'll get out of this unscathed, while the taxpayers are left holding the bag.

Not surprising at all and lol at someone thinking he put his life savings into the studio. Why put your money where your mouth is when you can just screw over taxpayers?

Just to clarify from the reports it looks like the $4 million was new investment in 2010. He had told Reuters last year that he had put $30-35 million in the company. 38 Studios has been around since 2006.

Yeah, all of my friends worked there. Im an illustration student at the Rhode Island School of Design and its been fucking intense here. All of my friends who were interning or contracting at 33 (and there were a lot of them, at least 20 RISD students/recent alumni) got let go. Holy shit man, Moral is low here.

Really shitty situation, I hope 38 Studios can survive this somehow, not only for the employees still left, but for the taxpayers that could be on the hook to have to pay off the debt on this loan.

Ooooooh god.

man this is tragic.

I don't understand the people saying "oh man, the suits, fuck them." Let me see if I got this right.. 38 Studios took a loan from the state, correct? First of all, I've never heard of this before. Why not from a bank? Isn't that where most studios would get money for a project like this? Second of all, it's pretty much par for the course that the lender takes at least partial ownership of whatever project they helped fund if they cannot be repaid.

Okay, wow, that update just made this whole thing even more cringe-worthy. I feel bad somewhere deep in my soul for those guys.

Tough situation, hopefully the crew at 38 Studios get through this relatively unscathed.

@jazin said:

rich should just come to giantbomb

He can take over as senior anime editor for Brad.

A company's first responsibility (after paying taxes) is paying their employees. This is a law and state agencies would take it very seriously. Say "wage claim" in front of your HR representative / bankruptcy administrator and see their reaction.

In 2007 '38 probably seemed like a good bet. No financial crisis and WOW was pulling in more money than they could count. Gaming was booming and a number of new studios were over funded and given too much freedom. Flagship comes to mind, but the new Bungie and Respawn seem like similar arrangements.

I have been an active fan of Big Huge for some time. Rise of Nations and it's expansion were exceptional. The Titan Quest Expansion as well as Rise of Legends were very, very good. They have been prolific for a long time and will land on their feet (or at least it's employees). KOA:R was disappointing for me, and that was apparently an appetizer for the MMO main coarse.

Maybe that dream job in the gaming industry isn't all it's cracked up to be.

kickstart anyone?

@Portis said:

Man, they have (had) 300 employees? Does that include Big Huge Games? This whole thing is getting pretty messed up. Poor Rich.

In there 6 (?) years they did mange to get one game out at least. So that's something at least.

Big Huge got a game out, which is owned by 38. But 38 studios itself has never put out a game. They've been working on that MMO for 6 years now and not a single detail has been released.

@RadixNegative2 said:

Why do I find this hilarious?

because it kinda is, I mean, what were they thinking? MMO? Really?

@murisan said:

I don't understand the people saying "oh man, the suits, fuck them." Let me see if I got this right.. 38 Studios took a loan from the state, correct? First of all, I've never heard of this before. Why not from a bank? Isn't that where most studios would get money for a project like this? Second of all, it's pretty much par for the course that the lender takes at least partial ownership of whatever project they helped fund if they cannot be repaid.

To my understanding, the source of the money does technically come from banks; it's just that the state acted as the guarantor of the loan and agreed to take on its repayment in the event that 38 Studios wasn't able to hold up its end of the bargain. The nature of the arrangement is one of the major reasons why this is getting more press and government attention than any normal financial-related studio troubles would ever attract.

It's incredibly presumptive to assume we know what Rich Gallup wants for himself, but he'd be an awesome addition to the Giant Bomb team...

Didn't Big Huge Games (of Rise of Nations fame) develop Reckoning, as a developer owned by 38 Studios? I wonder if they're still working...

They should start a kickstarter.

Wow, this turned into a real shit show. And, man did Schilling get old.

If only there was some way they could get a kickstart.

Didn't Amalur sell decently? What they doing with all that money?

This is fucked up.

Things just got even worse, it's a shame to. Wasn't a huge fan of Reckoning but certainly saw potential there. Looking at it now though this sort of thing was probably going to happen right? You'd think they'd have more sense. After all MMO's aren't doing to well nowadays. Wrong time and wrong place it seems.  
 
Hope all the employees pull through all right, especially Rich.  

Show them your bloody sock, Mr. Schilling. You once pitched under great duress, surely you can now pitch a reasonable proposal.

@jaks said:

Didn't Amalur sell decently? What they doing with all that money?

38 has been open since 2006. They have 379 people, where as most studios have 100. Not to mention they have quite a few big names that are probably getting paid a ton.

So, 379 salaries for 6 years, monthly 1.25 million dollar loan payments, and that MMO they're making sucking up resources.

God damn it. I really hope in some way that they can get out of this hole but seemingly each new news story brings more and more doubt in my mind. I loved Reckoning and was looking forward to what they were going to do with that MMO. I just hope that no matter the situation, good or bad, the company and its employees land on their feet.... As much as a company that has a multi-million dollar debt can...

That is really messed up. Instead of creating more jobs, there are losing jobs. Curt Shilling is becoming another former athlete who failed at entrepreneurship.

KOAR wasn't good imo.. But yeah this is why you don't go run off and do MMOs.

Why, oh why, do I just know that somebody out there like Goldman Sachs is sitting on a pile of naked Credit Default Swaps with 38 Studios' name on them? What I'm curious about is, who's the counter-party? No matter who loses, some too-big-to-fail Wall Street firm wins again. Go figure...

Big huge mess if you ask me.