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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.

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267 Comments
Posted by takkun169

$75 million and ~400 people couldn't make a game in 6 years. Sounds like Duke Nukem forever. A group that set no goals and wasted everything they had."

The studio has not been here for 6 years. It's only been a year and a half!

Posted by CaLe

@takkun169 said:

Curt Schilling is such an insufferable dick hole. A few years ago he was quoted as saying that America is in a really tough spot and it is up to the individual to pull up their boot straps and make an effort to improve their own situation and in turn the state of the country will in turn improve. Only now that his company, that I am now on the hook for paying for (I live in Rhode Island), is falling apart, he goes crying to the government for help.

Piece of shit rich republicans like this fucker complain all day about poor people getting government assistance all the while they use the government to line their pockets.

I didn't know he was a dirty republican on top of it all!! What a turd hole!

Posted by Deusoma
@AxleFGK said:

look, Amalur:Reckoning was definitely disappointing (4 stars my ass Jeff!). But they don't deserve THIS!

it's a shame.

To me, Reckoning was great, but nobody deserves this. I don't usually find myself 50/50 in agreement with a comment. It is a curious sensation.
Posted by Jayzilla

The check cleared. GameSpot was good enough to update the news article all the way through to conclusion.

Posted by mordukai

@Demoskinos said:

Man, that sucks. Didn't much like KoA but people losing their jobs and not getting paid sucks no matter what.

Not for Curt. He used the loan money to pay himself back on the money he personally invested in the company. So now the Rhode Island tax payers are left with the bill because if this thing defaults...Lets just say Curt's money is safe. He needs to step down. He has no clue how to manage a company. To be fair it's not just his fault. The people that made this deal with him are also at fault for putting the people of Rhode Island in such a shitty situation.

Posted by Demoskinos

@mordukai: I wasn't speaking about the monkeys in suits making the decisions. I'm talking about the people who actually WORK there.

Posted by Humanity

@Deusoma said:

@AxleFGK said:

look, Amalur:Reckoning was definitely disappointing (4 stars my ass Jeff!). But they don't deserve THIS!

it's a shame.

To me, Reckoning was great, but nobody deserves this. I don't usually find myself 50/50 in agreement with a comment. It is a curious sensation.

Kingdoms of Amalur was basically Diablo 3 but a lot more fun to play with actual quests and shit. Hey, whatever.

Online
Posted by mordukai

@Demoskinos: Oh I know. I was merely commenting about Curt pays himself back on an investment from loaned money. Load of his mind. He gets his money back (probably with some interest) while the rest of the employees get to miss a paycheck. I don't know how the money issues are handled but doesn't investment means that there a chance you are not gonna see it ever again?

Oh well. Good to know that the people of Rhode island payed Curt his money back while the rest of the employees get to go home empty handed. Jees...What a cluster fuck for everyone.

PS: I guess the guy that made the deal with 38 Studio has stepped down.

Posted by dvorak

Well I'd say that they're pretty much dead. At this point they'd be lucky if their creditors will let them sell everything off to another studio,Realtime Worlds style. Hopefully in order to avoid bankruptcy instead of because of it though.

Posted by BombcastGoldthwait

not good... at all.

Posted by LathamVance

What I find so funny about this whole thing is that Curt Schilling has stated numerous times over the course of the last decade that he is an avid republican and doesn't believe that the government should be bailing out companies...and then he goes to the RI statehouse and asks for more money. While I don't really care what his personal beliefs are, I just find that funny. That said, I do hope that things turn around for 38 Studios.

Posted by DS23

lulz @ no funds.

Posted by Dad_Is_A_Zombie

@LathamVance said:

What I find so funny about this whole thing is that Curt Schilling has stated numerous times over the course of the last decade that he is an avid republican and doesn't believe that the government should be bailing out companies...and then he goes to the RI statehouse and asks for more money. While I don't really care what his personal beliefs are, I just find that funny. That said, I do hope that things turn around for 38 Studios.

That is the definition of avid Republican. Holy than thou until the shit comes around full circle. Then it's hypocrisy time...

Posted by inspectah

Rich im pretty sure there is always a home for him in GB HQ

Posted by FakeKisser

@Demoskinos said:

Man, that sucks. Didn't much like KoA but people losing their jobs and not getting paid sucks no matter what.

My sentiments exactly. It's inevitable in a capitalist society that companies fail. It's a sort of capitalist "survival of the fittest." With only so much money in gamers' pockets (and only so much time on gamers' clocks) and so many games being made, some studios will shut down due to lack of success. However, this is a very sad circumstance with the loan and a state (gov't) involved...and add onto that employees missing paychecks in order to try to keep their jobs. :(

Posted by CRAzYKiLL3R93

The State of Rhode Island should just finish the game

But in all seriousness, sucks for the employees and taxpayers

Posted by Zenthere

Lets just hope future game studios learn from this.