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

@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.

@Kidavenger: Programmers and artists don't get to decide how funds are allocated.

I like that this company tried to do some big things, but it seems as if they have been living on the hype for far too long now.  Kingdoms of Amalur was talked up as if it was the best fantasy game ever created and what it turned out to be was a perfectly serviceable game that wasn't even in the same league as Skyrim. 

Too bad for those losing their jobs, but this goes to show that baseball players ≠ businessmen.

All this economy business is really killing my buzz.

@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.

I agree. I haven't followed this all too closely, but the entire thing sounds very messy and disorganised. Also, knowing the guarantees that were put in place by the government of RI (i.e. the fact that the taxpayers more or less footed the bill on this), the past and ongoing secrecy surrounding their MMO doesn't sit well with me at all. Who's to say they even have anything to show for 6 or 7 years of development and it isn't all just a waste of resources?

Reckoning has almost nothing to do with any of this. If that game was the second coming of Jesus it wouldn't have saved them from unbridled ambition.

You don't just make MMOs for six years without anything to show for it. Especially as the first game you make... ever.

It's sad but it's also a good lesson.

Sad. They bit off more than they could chew. They made a decent game, but if you promise someone the moon and only give them Mt. Everest, they aren't going to be too happy.

Kingdoms of Amalur sold well enough - but not well enough to save the company. That's tragic. Hopefully they can find new jobs elsewhere - after all, they have some skills.

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.

@Kidavenger said:

@DrDarkStryfe said:

I feel even worse for the workers, they are the ones getting the raw end of this.

How so? They can just go and get another job if they are good and completely wash their hands of this, the owners of 38 studios are going to lose all the startup capital they put in to get the company going and will likely be hounded by the state and other creditors for years, and the tax payers of Rhode Island are out however much is still outstanding on the loan. Employees did a shitty job and the game is behind schedule and they get off scott free.

Low-level employees don't decide the scope of projects, where the money goes, or what's expected of them. I sincerely hope you were just being reactionary or a troll and don't actually believe that shit.

More generally, is there any way as gamers/consumers that we can influence the industry so that screwing over workers becomes unacceptable? We see these stories again and again but so much of it is after the fact and about the only thing I can think of that I can do as a consumer (boycott) doesn't seem like it would help devs, either. Even with solvent dev houses, you hear stories about insane overtime and people sleeping at desks.

Having worked for a company that almost had to miss payroll because of debt (but didn't and has since recovered) I can tell you this... Once you miss payroll you are pretty much done. Most employees can't afford it and will immediately resign and look for other work. This is especially troubling for me as a good friend of mine is an encounter designer at 38 :(

@Kidavenger said:

@DrDarkStryfe said:

I feel even worse for the workers, they are the ones getting the raw end of this.

How so? They can just go and get another job if they are good and completely wash their hands of this, the owners of 38 studios are going to lose all the startup capital they put in to get the company going and will likely be hounded by the state and other creditors for years, and the tax payers of Rhode Island are out however much is still outstanding on the loan. Employees did a shitty job and the game is behind schedule and they get off scott free.

Low-level employees don't decide the scope of projects, where the money goes, or what's expected of them. I sincerely hope you were just being reactionary or a troll and don't actually believe that shit.

More generally, is there any way as gamers/consumers that we can influence the industry so that screwing over workers becomes unacceptable? We see these stories again and again but so much of it is after the fact and about the only thing I can think of that I can do as a consumer (boycott) doesn't seem like it would help devs, either. Even with solvent dev houses, you hear stories about insane overtime and people sleeping at desks.

The games business is vicious. Here's hoping things turn around for 38 studios.....and the many other developers on the brink of going under.

@CaLe said:

The guy looks unhealthy. Look at his eyes. Has to be some form of malignant tumor.

It's not a Tumah!

RIEDC, what the fuck do you think "don't cash this until Monday" means?
 
@CaLe said:

The guy looks unhealthy. Look at his eyes. Has to be some form of malignant tumor.

The guy looks unhealthy. Look at his eyes. Has to be some form of malignant tumor.

I hope Big Huge Games can at least survive this mess ok. I'd like to see what they can do after Reckoning.

Big huge mess if you ask me.

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...

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

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.

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...

@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.

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

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.  

This is fucked up.

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

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

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

They should start a kickstarter.

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...

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...

@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.

@RadixNegative2 said:

Why do I find this hilarious?

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

@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.

kickstart anyone?

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.

@jazin said:

rich should just come to giantbomb

He can take over as senior anime editor for Brad.

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

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

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.

man this is tragic.

Ooooooh god.

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.

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.

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.

@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?

Whoa. Things are pretty messed up over there.

@jazin said:

rich should just come to giantbomb

He can take over as senior anime editor for Brad.