Report: 38 Studios Lays Off Entire Staff [UPDATED]

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.

The state also just published a bunch of documents related to its loan.

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UPDATE 2: A press conference with Rhode Island governor Lincoln Chafee is happening now.

“It’s not a good situation,” he said. “I’m not here to share good news. I wish things were different.”

Chafee said there were discussions between 38 Studios and the state about giving more taxpayer money to the developer, but the state declined.

“I would gladly extend the life of the company if I had confidence it would lead to profitably,” said Chafee. “We were not given that confidence.”

When the state was talking to 38 Studios, there was no mention of layoffs. In the press conference, the state has not acknowledged whether there have been mass layoffs, which appears to be the case.

The state is unaware whether 38 Studios will file for bankruptcy.

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UPDATE: According to WPRI, here's the email that was sent to 38 Studios employees today:

The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.

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Both Polygon and Joystiq are reporting based on sources familiar with the situation that 38 Studios has laid off its entire staff. This includes both the main 38 Studios office, as well as all employees at Big Huge Games, which 38 Studios owned.

Rhode Island governor Lincoln Chafee had commented as recently as yesterday that all attempts were being made to rescue the studio from closure. He also stated that 38 had yet to find additional outside funding. Reports coming from inside the studio stated that employees had not been paid since May 1, and that all employee health benefits ran out as of today.

Details on this situation are still being investigated. We'll update this story as soon as we know more.

Oh christ. I thought they'd last longer.

:O

Shit. Terrible news.

I guess Curt Schilling is a bit better pitcher than he is a businessman. 

Fuck. This sucks.

God damnit

Pour one out for Rich...

That's depressing.

Shit sucks. Hope they all find jobs as quickly as possible.

Damn

Well... that's real bad. Not that something like this wasn't already seen coming, but damn. Here's to hoping that the skilled folk out of jobs find themselves someone else willing (and able) to pay them and soon.

I hope Rich makes it out ok!

HO-LY SHIT.

CBS, please go grab Rich. GB needs a decent east coast correspondent. Most of the GB community already loves the guy, he would be a great fit.

I wonder who's gonna try to buy that IP from Rhode Island.

Wow, that sucks.

I wonder how hard it is to transition into a new gamer job after something like this happens?

Damn, that happened much faster than I was expecting.

Didn't they move to RI in the first place to create more jobs? This is pretty bad but it's all that keeps happening lately. HP are firing 27,000 of its staff. Soon enough the only tech and gaming companies will be MS, Google, Apple and Activision.

That sucks.

On a lighter note. Rich Gallup and his entire staff get laid off and it is Joystiq that gets the scoop? FFS Rich, could you not throw your old pals a bone? How soon they forget. :D

@Jace said:

...We need a decent East Coast correspondent...

Wow, and you even said that on an article Alex himself wrote... poor Alex :(

Sucks to hear that, at least Rich knows that he has a home at GiantBomb. Best of luck to all who were involved with the 2 studios.

@Jace said:

CBS, please go grab Rich. GB needs a decent east coast correspondent. Most of the GB community already loves the guy, he would be a great fit.

this

Fuck. Good luck to those guys, I'd hate to see this happen to anyone.

That is just sad.

Well, shit...

I like how Curt Schilling was linking to his own forums just 3 hours ago and hyping an MMO that is now effectively dead.
 
And the most hilarious part is that this guy is a huge Republican who is supposedly for lower taxes and personal responsibility, yet his company is now going belly up only a few months after they released their first game...with tens of millions owed to the state of Rhode Island.

Damn. That really sucks. This all went down hill really fast.

Rich on the podcast asap

@DigTheDoug said:

@Jace said:

...We need a decent East Coast correspondent...

Wow, and you even said that on an article Alex himself wrote... poor Alex :(

By "decent" I meant well-liked by the majority of members. Personally, I have no problem with Alex's stories, but it's no secret that the community is divided on him.

I though Reckoning did ok, sales wise. They were nobbled by a MMO cash sink.

@Jace:

That's @Jace said:

CBS, please go grab Rich. GB needs a decent east coast correspondent. Most of the GB community already loves the guy, he would be a great fit.

"By Alex Navarro"

soooo mean.....

Holy fuck. That really sucks. I think this is the first time a studio closure hit home, just because Rich is there, whom I followed all the way through the GS days. Put a face to the company and you realize how fucked up everything is.

I wonder if the people brought in to close it down will find someone to buy the assets or if they'll be destroyed rather than given away (because they have value, even if they fail to find a buyer for them). Speaking of which, I wonder how long Valve will continue to sell the non-EA edition (Steam achievements, published by 38 Studios) of KoA: Reckoning; you have to assume that any money coming in is a positive and so it'll continue until the final books are closed and all people owed money are told they're out of luck (speaking of which, does anyone familiar with the US system know what happens the the revenue from EA? Do the administrators maintain operations until that money dries up, funnelling it to people who are owed money (assuming the EA Partners contract has some revenue split clause)?)

Bad news, especially for BHG. Hope everyone lands on their feet and maybe a core of BHG reforms and starts something new with publisher (or community) backing.

Best of luck to everyone who lost their job. The studio and its ideas showed great promise.

This is what happens when you try to run a company like its a .com from the early 2000's.

@Jace said:

CBS, please go grab Rich. GB needs a decent east coast correspondent. Most of the GB community already loves the guy, he would be a great fit.

Not sure if that's an intentional dis to the writer of this story or not........

EDIT: Having read the rest of the comments I can conclusively say it is.

@mrcraggle said:

Didn't they move to RI in the first place to create more jobs? This is pretty bad but it's all that keeps happening lately. HP are firing 27,000 of its staff. Soon enough the only tech and gaming companies will be MS, Google, Apple and Activision.

From what I remember, RI gave them that loan as incentive to move there and create jobs.

Real sorry to see this, there's clearly a lot of talent a BHG.

Also, Alex is fine and it's a real dick move to claim GB needs a "decent east coast correspondent" on one of his articles.

Man, that's rough.

@Excast said:

I like how Curt Schilling was linking to his own forums just 3 hours ago and hyping an MMO that is now effectively dead. And the most hilarious part is that this guy is a huge Republican who is supposedly for lower taxes and personal responsibility, yet his company is now going belly up only a few months after they released their first game...with tens of millions owed to the state of Rhode Island.

Yeah, the dude's a jackass.

Damn, that really sucks. Best of luck to everyone.

I wonder what would have happened if they had tried to pay their employees instead of make that loan payment.

On the good side of this, Rich Gallup confirmed for upcoming Bombcast.

Did Kingdoms of Amalur undersell versus expectations?

Holy shit. That was QUICK, I thought they'd probably get to the end of the year.

Rich, come home buddy.

Is there any truth to the rumor that Valve is directly hiring, skipping the normal application process, for some of the artists from 38 Studios?

What if the text from Rich Gallup that Jeff got during the PixelJunk 4am Quick Look was about this? CONSPIRACY!