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

Lets just hope future game studios learn from this.

The State of Rhode Island should just finish the game

But in all seriousness, sucks for the employees and taxpayers

@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. :(

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

@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...

lulz @ no funds.

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.

not good... at all.

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.

@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.

@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.

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

@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.

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

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

it's a shame.

@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!

$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!

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.

Rich needs to... GALLUP back to CBS!!! Come to Giantbomb Richard!!!!!

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

it's a shame.

Poor Rich Gallup

I really like KoA despite its flaws. Sad to see this happen to them already. Hopefully they get it straightened out soon and can remain in business.

This story makes me sad. It is possible for 38 to turn it around, but it would be one of the best comeback stories ever.

Ah man this is painful to read about. It hurts to see people go through this sort of thing. Especially when they did such great work.

@Grok1122 said:

@umdesch4: There are no CDS's out on 38 Studios. There would never be a market for it.

The way I arrived at that idea was by thinking that RIEDC would probably have wanted a hedge on this loan, but who would pick up the other side of that? Naturally, my train of thought veered off into Goldman Sachs suckering retail investors with "one shitty deal" after another. While this 38 Studios thing is orders of magnitude smaller, I could still see somebody at a trading desk thinking "hey, I could pick up some pocket change in commission by brokering a deal for these guys".

I thought there would never be a market for bundles of sub-prime mortgages owed by people with no stated income either, but it happened...

Really hope everything works out for them, I wish the best of luck to everyone at 38.

@Sword5 said:

$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.

Don't lump all 400 people into that group. It all comes down to the project manager(s) and the higher ups. From my experience it has always been the grunts/peons that get their work done, but the project managers and department managers have no clue what they are doing.

I don't do game development, but I imagine it still goes like this for some companies:

-Manager Requesting Functionality (Manager): I want a button.

-Developer: Okay.... what do you want it to do?

-Manager: It should be gray and look like the rest of the buttons. Oh! Put it over here! *points at his monitor even though this a telephone conversation*

-Developer: What do you want it to do?

-Manager: It should work.

-Developer: *Face Palm*

And in case people haven't seen this before, this is true:

I am kind of glad I didn't get hired there now :(

The world has gone wrong somewhere... to pay the State instead of employees.

It's kind of amazing that anyone would put blame on the state. It's not that unreasonable to request a fraction (in this case, almost 1/75th) of the money they put forth, especially when the terms of the loan have yet to be met.

I thought Amalur was commercially successful. Hopefully everything works out for them.

Burning up taxpayer money never pays.

Well, this is a rather interesting development! :S

@Jellybones said:

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

Its not. Every law I've ever read says employees get paid first.

$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.

That is a crazy loan indeed.

@Kidavenger: If programmers or artists are under performing, then the onus is on management to do something about it. I'm not saying the lower-level workers are blameless, but everything about this scenario reeks of failure on the business side, not development.

@umdesch4: There are no CDS's out on 38 Studios. There would never be a market for it.

Quick! Someone send Rich a paycheck! If he's not funding Time Trotters, who will? WHOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!

The fact that I haven't seen any takeover rumors does not bode well. If the project were close to completion, I'm sure they would have shopped it to another game publisher to bridge until the game started to make money. Without any rumors of takeover, you have to assume either that the game is too far away from generating revenue to make the bridge loan payments until release (and income). The only option is that publishers do not see any value in the product at all. In that case, it's a real shame.

Though not a huge fan of RA Salvatore, he's pumped out a metric ass ton of fantasy stories and worlds. Todd McFarlane might not be the writer/creator he once was, but his art still sends chills down my spine. I was really excited to see what they would do with a MMO.

It is also sad news for Big Huge Games, who seemingly will have to close up shop (unless there is a buyer) again. It doesn't look like they will ever give us another Rise of Nations or AoE. Their acquisition by 38 studios had made me excited for some really strategic component to the MMO, but perhaps that was just my hope.

Honestly, the amount of employees that I keep seeing compared to the games they put out... something ain't right.  Truth be told, they'll need to lay off a bunch of people if they ever hope to make it.

Very sad. It completely blows when the business side of video games rears its ugly head.

there goes our tax dollars.

Lol.... That's one way to fix the problem.. Practice slavery! I think they're on to something.

@Kidavenger said:

It's not that I don't feel bad for the workers, I'm just sick of people saying poor workers and fuck everyone else. The workers are the day to day operators at the company and directly responsible for its failure yet somehow hold the least responsibility. This it a terrible situation for all involved, not just the employees .

Man i feel like you are so off base here and i don't know if you know the whole story or not but the game turned out quite good, so the day to day workers did their job. Also this talk about missing payroll and these people not getting their paycheck. So I can't see how they are getting away scott free.

We don't know the details and what they had to do in their time frame but building a big rpg such as Amalur and also working on a MMO is no small task , so it's a little crazy not to expect some set backs or delays. I don't understand the hate on the lower tier workers here but they are not to blame for this. This is completely bad management along with some real risky deals they just did not pan out.

@G0rd0nFr33m4n said:

I don't have any love for bad companies. If you are a company, and end up in a situation were you suck up huge amounts of resources and produce little to no products, you should and other people should ask "should they be a company"?

They are not the first company to bite off more than they can chew, and they won't be the last, but yeah, if 38 studios goes under, I won't be shedding any tears. Financial responsibility is what a good company should strive for and is a lost art form as of late, don't feel sorry for these people.

What do you call a bad company? Because many companies take risks and don't come out on top. Now i can't speak for this case because the deal that went down here is crazy but other companies have made great financial plans for whatever their goals may be and it just does not happen.

Also I must add what people do you not feel sorry for? The Big CEO cats who took this risky deal or the other 250+ people who could surely be out of a job and even worse have not got paid for their recent work yet. I see your point but it not as simple as you make it out to be and even terrible companies have honest workers working there trying to earn a paycheck and feed their families.

After playing Max Payne 3 for 4 hours today this continuing story seems like something from that game without the violence. A bad situation getting worse

@Kidavenger said:

@cmblasko: The game was supposed to come out in September 2012, I suppose the programmers and artists have nothing to do with it not being ready enough to show let alone be in beta which it should be by now.

It's impossible to say without being on the inside. But, from personal experience, more often than the developers just being terrible at their jobs, it is that management doesn't understand how to manage scope. The developers don't always have the input to control what features are going into the product, so it's easy for schedules to slip as changes to the initial scope happen. Also, if the developers are terrible at their jobs, it is management's duty to either get them trained or replace them with someone competent.

Jesus christ. What a mess.