Report: 38 Studios Lays Off Entire Staff [UPDATED]

bummer

The well-wishes are nice, but where's the outrage? How do you burn through (supposedly) $30M of your own money, $50-75M of the *TAXPAYERS* of Rhode Island's money, and whatever other money you raised in such a short period of time. R.A. and Todd not chip in a few bucks, too? WoW was developed for $40M. Inflation's not *that* bad. What outrageous salaries were the honchos at these studios pulling in on the backs of the people of Rhode Island? Disgusting. For once, Massachusetts did the right thing in letting a company "get away". And to think the Patrick administration looked like the bad guys two years ago. Looking pretty good right now. Don't cry for ol' bloody-sock. He'll keep pulling in his salary from ESPN and his union (*shudder*, right, Curt?) pensions and benefits. Hypocrite. :P

@Annai said:

The well-wishes are nice, but where's the outrage? How do you burn through (supposedly) $30M of your own money, $50-75M of the *TAXPAYERS* of Rhode Island's money, and whatever other money you raised in such a short period of time. R.A. and Todd not chip in a few bucks, too? WoW was developed for $40M. Inflation's not *that* bad. What outrageous salaries were the honchos at these studios pulling in on the backs of the people of Rhode Island? Disgusting. For once, Massachusetts did the right thing in letting a company "get away". And to think the Patrick administration looked like the bad guys two years ago. Looking pretty good right now. Don't cry for ol' bloody-sock. He'll keep pulling in his salary from ESPN and his union (*shudder*, right, Curt?) pensions and benefits. Hypocrite. :P

Not sure how many RIers there are, but I imagine the 38 debacle's going to be seen as a cautionary tale against throwing money at game developers, at least unproven ones. And yeah, it's BS that Curt isn't being made to pay this himself when it was his company.

@SmokePants said:

Get it straight: they didn't EXPECT Reckoning to sell over 3 million, 3 million is how much it NEEDED to sell for the studio to stay afloat. Do you see the distinction? They are poor planners, not insane optimists.

How could any employee not see the writing on the wall? If they were really caught off guard and had hopes of buying a home, then they don't understand business, the volatile MMO market, or anything going on around them. The type of people that got "screwed" by this are probably the type of people that sunk the company. The competent people are just going to move on and have prepared themselves for this eventuality.

I would LOVE to see the planning docs there. But yeah, when you need 3 million sales of an unproven game to keep existing, then yeah, nothing good is going to come out of that.

And honestly, I hope the normal, competent people DO get jobs, but too often, the morons get float down safely on their golden parachutes while the normal people are left with nothing. And that's to say nothing of how bad Rhode Island citizens got fucked in this deal.

Curt Schilling is a asshole. Always has been

Here's a 38 studio employee, calling himself, uh... *ahem*... Czar of Amalur... blames the governor and not his company.

Watching that, I just go "huh?" Nothing the governor could have said to help or hurt when employees already weren't even being paid before this situation went public.

I wonder if other employees think like the "Czar of Amalur" here and really believe the tax payers should have funded their MMO.

A piece of shit always floats to the top.

Holy crap this has been handled really badly, and my condolences go out to these people for being treated so badly.

Update on Rich's situation?

It's been said a hundred times in this thread already, but...seriously, if you can't turn a profit after selling 1.2 million games, someone is doing something very, very wrong

@Ehker: According to this kind of bizarre article I hesitate to link to because it's partially meant as click-bait... yes, at least some of them are in an understandably messed-up state.

sucks people lost their job. but honestly it was their own stupidity that lead to it. They were working on an MMO (which is REALLY expensive to do) when they hadn't even treaded much water yet. As others said they should have stuck to other releases, built up revenue and portfolio...and if all went well..THEN (maybe)...tackle an MMO.

also KoA wasn't good. it wasn't terrible. But it was just another generic fantasy game with nothing really special except MAYBE the artstyle...and when you go against a titan like Skyrim..you need MUCH more than that.

so yah..hope those guys find jobs quickly...but...the company did this to itself...

I'm always conflicted by these stories. Yes, I feel bad for everyone who lost their jobs. However: Amalur was a hugely mediocre game and Project Copernicus looked underwhelming, to say the least. Ideas sell games. 38 Studios did not have good ideas.

Yeah, still selling three million is a bold assessment.

Man that's a terrible situation

This is a huge bummer, I hope everyone at 38 Studios and Big Huge Games lands on their feet.

Pretty stupid of anyone to expect the first game in a franchise to sell 3 million. 1.2 million is amazing for the first installment. I guess poor budget management was the real culprit here.

Oh boo hoo.

@AndrewB said:

@Ehker: According to this kind of bizarre article I hesitate to link to because it's partially meant as click-bait... yes, at least some of them are in an understandably messed-up state.

That's a super depressing article.

And the story gets much worse - http://www.theverge.com/gaming/2012/5/25/3043282/38-studios-downfall-leads-to-second-mortgages-for-some-employees

Terrible people ran that company.

@Sweep: That was the general gist of my point.

This is sad. I was thinking they would pull out to at least do a last gasp with Copernicus before going down but I guess they're done before ever really getting started. Combination of being too ambitious and really bad management, seriously when your first game sells 1.2 million and you still go down you're doing something wrong.

Anyway to the important part, when's Rich Gallup coming home?!!!

Perhaps we should wait to assign the blame for 38's demise until we know more about what happened. Right now we are justing getting one side of the story from the Governor. Let's wait to see all the facts and then we can judge.

http://blogs.wpri.com/2012/05/25/salvatore-defends-38-studios-its-game-would-blow-you-away/

@Sword5 said:

And the story gets much worse - http://www.theverge.com/gaming/2012/5/25/3043282/38-studios-downfall-leads-to-second-mortgages-for-some-employees

Terrible people ran that company.

Wow, Curt Shilling truly is the worst.

Who didn't see this coming?

"38 Studios laid off all 379 employees"

As of March 2012, Valve has 293 employees.

Just think about that for a second.

RichieG :-(

@Sword5 said:

And the story gets much worse - http://www.theverge.com/gaming/2012/5/25/3043282/38-studios-downfall-leads-to-second-mortgages-for-some-employees

Terrible people ran that company.

Not sure I'd say "terrible," but it was incredibly ignorant. They didn't seem to understand the enormity of the investment required for an MMO. Even Runic Games understood that they had to release other games to even get in a secure line of funds. Kurt & Co. seemed to think they could just do the MMO and make the money that way. Even Reckoning was just an existing in-development game that got the name Amalur slapped on it when Big Huge got bought. Just people who didn't know dick about the realities of MMO development trying to make an MMO.

EDIT:

38 Studios laid off all 379 employees, 288 of them in Rhode Island, yesterday afternoon in a terse email. Sources tell Polygon that the company had not been communicating with employees, or paying them, for nearly a month prior to the mass layoffs.

Yeah, they were terrible.

1.2 million copies is considered a failure? Is this what the industry has turned into?

I don't understand. I thought they still had payments to make to the state, with their next due in November. How can they generate ANY money if everyone is laid off and the developer shuttered.

I blame Curt Schilling. I don't want to, because Reckoning is great and he had nothing but noble intentions. But for fuck's sake, you don't jump into the deep end of the pool if you don't know how to swim! What kind of psycho would open a startup developer of that size? Something like 380 employees. And put them to work on an MMO, a game that won't even exist for 4-5 years. It's just bananas. It's a miracle they shipped Reckoning at all; or rather, that Big Huge was going out of business and they bought them and they had the RPG already in production that would become Reckoning.

Shit. 1.2 million copies of a new IP is something that should be considered an accomplishment.

And shame on EA for not supporting the game better. They totally are not paying attention to the MSRP on that thing. It's still $52 new, and it came out in February. How are they supposed to keep sales moving? You're supposed to knock down the price every few weeks, and bring in the next "waves" of purchasers. Gamers waiting for it to be $40 and $30 and $20. Stop sleeping on the job, EA.

fiddlesticks.  :(

good luck to all those looking for jobs

@envane: yes exactly, i guess you must not work for a living and can't understand someone undervalueing what you do

UPDATE 3: According to Chafee, 38 Studios took a turn for the worse due to poor sales of Kingdoms of Amalur: Reckoning.

“The game failed," said Chafee.

38 Studios founder Curt Schilling announced on Twitter yesterday that Reckoning sold 1.2 million copies. Chafee said the game needed to sell closer to three million.

"38 Studios laid off all 379 employees"

As of March 2012, Valve has 293 employees.

Just think about that for a second.

38 Studios founder Curt Schilling announced on Twitter yesterday that Reckoning sold 1.2 million copies. Chafee said the game needed to sell closer to three million.

Here's my big question, how do you sell 1 million copies and still be considered a failure?!

@ManMadeGod said:

@Marshall109 said:

So, I guess this means no Rise of Nations 2. Dammit.

God dam, RoN is still one of the best RTS games ever made. Now I need to re-install it, thanks.

Don't worry guys, Rise of Legends,

...

oh wait. That was bad.

This saddens me. Curt Schilling seemed like a guy who actually cared about what fans had to say. Hope he can pull this all together.

Kingdoms of Amalur is a great game. 100 hours in and i've still only completed half the map and one DLC.

It's a real shame about 38 Studios but it seems to me that they were a little bit too ambitious with what they wanted to do and didn't have the funds to make it a reality.

@Atary77: you spend more than $60million to make it. that's how.

@Atary77 said:

Here's my big question, how do you sell 1 million copies and still be considered a failure?!

In the same way that Obsidian got no bonus and a ton of layoffs because Fallout New Vegas didn't get 85 on Metacritic (it got 84).

It's terrible what's happening to the employee and I hope that they all swiftly find jobs elsewhere.

And hopefully this makes developers/publishers think twice about pouring money into games so much that they have to sell several million to break even.

I should probably go back and play more Amalur. Put about 20 hours in and kind of fell off of it.

Great world, great combat, storyline and quests were very much the worst part of it so far.

public carries the losses, private entities take the profits. Yeah sounds like basic "self-made-man" republican strategy to me

time to get riiich

This is disgusting.

I liked Amalur a lot. I hope some other decent studio picks up the IP when RI auctions it off and continues the series.

@vinsanityv22 said:

I don't understand. I thought they still had payments to make to the state, with their next due in November. How can they generate ANY money if everyone is laid off and the developer shuttered.

I blame Curt Schilling. I don't want to, because Reckoning is great and he had nothing but noble intentions. But for fuck's sake, you don't jump into the deep end of the pool if you don't know how to swim! What kind of psycho would open a startup developer of that size? Something like 380 employees. And put them to work on an MMO, a game that won't even exist for 4-5 years. It's just bananas.

Not having read the thread, I'm not sure if someone covered the point I'm about to make. If so, apologies.

As you may know, 38 Studios received a $75 million loan secured by the State of Rhode Island . In exchange, the State reserved the right to set development "milestones". Now, these weren't traditional milestones, in the sense of "proof of systems development incrementing towards a release candidate". Instead, Rhode Island's milestones were just employment mandates. 38 Studios had to have X employees employed within the State of Rhode Island on such and such a date, and X+Y employees on a proceeding date, and so on.

Basically, Schilling locked his company into possibly the worst financing arrangement imaginable. Their $4m/month burn rate was written into their contract with their biggest lender. Anyone

a) privy to the details of their deal

b)capable of basic arithmetic,

c) with some rudimentary knowledge of MMO development,

would have seen the bankruptcy coming when the deal was signed.

38 Studios management blaming Reckoning for tanking are just throwing up a smokescreen. The unique conditions on the financing agreement with Rhode Island were what caused 38 Studios to tank, FULL STOP.

Of course, Schilling doesn't deserve ALL the blame. Rhode Island received dismal service from whoever it was that concocted the poison chalice presented to 38 Studios... the Amalur IP is obviously worthless and RI will have to pick up the entirety of the debt servicing charges into 2020, which will exceed $100 million.

/// edited out the mortgage stuff because it appears that the relocation flubs may not be malfeasance/incompetence at 38 Studios after all