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

Avatar image for alex
Posted by alex (3512 posts) -
38 Studios head Curt Schilling being accosted by reporters following yesterday's meeting with the Rhode Island EDC.
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.

Staff
Avatar image for alex
#1 Posted by alex (3512 posts) -
38 Studios head Curt Schilling being accosted by reporters following yesterday's meeting with the Rhode Island EDC.
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.

Staff
Avatar image for amishtechsupport
#2 Posted by AmishTechSupport (46 posts) -

Oh no!

Avatar image for darkecho117
#3 Edited by Darkecho117 (110 posts) -

What a bummer for all those guys and gals not getting paid. Hopefully this works out for them.

Avatar image for obinice
#4 Posted by obinice (303 posts) -

Damn.

Avatar image for acoustic
#5 Posted by Acoustic (23 posts) -

Harsh.

Avatar image for jellybones
#6 Edited by Jellybones (254 posts) -

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

Avatar image for forkboy
#7 Posted by forkboy (1595 posts) -

Wow, that is real rough for the staff there. I hope they are all able to fall into new jobs real quick.

Avatar image for zachariahus
#8 Posted by Zachariahus (137 posts) -

oh wow.

Avatar image for dallas_raines
#9 Posted by Dallas_Raines (2269 posts) -

Oh boy

Avatar image for bonorbitz
#10 Posted by BonOrbitz (2506 posts) -

one word reply

Avatar image for movieflask
#11 Posted by MovieFlask (46 posts) -

Curt could use a few more shillings.

Avatar image for cloudenvy
#12 Posted by Cloudenvy (5893 posts) -

Yeah, this is looking pretty bad.

Avatar image for chilibean_3
#13 Posted by chilibean_3 (2198 posts) -

Oh man. This is going to be over real quick for 38, isn't it? Good luck to everyone over there.

Also, Curt is looking terrible these days.

Avatar image for fateofnever
#14 Posted by FateOfNever (1876 posts) -

Sad news. I wish all the employees at, or formerly at, 38 studios the best.

Avatar image for negativecero
#15 Posted by NegativeCero (3147 posts) -

This is unfortunate. I hope they get it together, but I doubt they'll survive when this is over.

Avatar image for lyfeforce
#16 Posted by Lyfeforce (448 posts) -

Wow. I know it's not unheard of for a CEO or president or other senior level people to forego payment when things like this happen, but everyone in the company? What the hell !?

Avatar image for demoskinos
#17 Posted by Demoskinos (17353 posts) -

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

Avatar image for mordukai
#18 Posted by mordukai (8497 posts) -

Lesson learned from this???

Don't take loans from politicians. 75 million, fuck sake, that's a ton of money. No matter what happens the tax payers of Rhode Island are left with the bill.

Avatar image for mrfluke
#19 Posted by mrfluke (5871 posts) -

holy shit, rich should get out of there then

Avatar image for stressedoutcat
#20 Posted by StressedOutCat (273 posts) -

I still hope that the 38studios will turn things around, yet this doesn't look good.

Avatar image for winternet
#21 Posted by Winternet (8399 posts) -

Nooooo. Rich needs to get to E3 and show on the bombcast . . . and get paid, of course.

Avatar image for depecheload
#22 Posted by depecheload (561 posts) -

Skipping payroll means you're boned. No ways around it. This is it for them. Looks like Rhode Island is going to own the rights to Kingdom of whatever the heck it's called.

This is what happens when you borrow a fuckton of money and barely release anything. A revenue stream is kind of a vital part of any business.

Avatar image for aiurflux
#23 Posted by AiurFlux (953 posts) -

Now I feel sorry for them.

The suits get rich, the people with actual talent don't get a fucking paycheck. If I was them I'd start finding different options and getting the hell out of Dodge because that studio is going to sink like the Titanic. Can't say I'm shocked or sorry for Schilling and the rest of the higher ups, but I feel bad for the people that moved to Rhode Island with dreams that are now being crushed by fucking morons.

Economic stimulus at it's finest here folks.

Avatar image for eribuster
#24 Posted by Eribuster (788 posts) -

Sad to see it has come to this. Kingdoms of Amalur: Reckoning didn't seem bad enough to warrant this.

Avatar image for harrymcback
#25 Posted by harrymcback (20 posts) -

Interesting that they choose to break what is a typical labor law in most states about having to pay employees for time worked so they could pay their obligation to the state.

I think Bob Salvatore needs to post some new eBooks to the 38 studios website next week to raise enough to make payroll.

Avatar image for iamjohn
#26 Posted by iAmJohn (6239 posts) -

I'd like to say that hopefully someone will step in and save Big Huge Games, but something tells me that it would be Bethesda to do so.

Avatar image for tadthuggish
#27 Posted by TadThuggish (992 posts) -

Yeah, that's gonna work out.

Avatar image for dallas_raines
#28 Posted by Dallas_Raines (2269 posts) -

@depecheload said:

Skipping payroll means you're boned. No ways around it. This is it for them. Looks like Rhode Island is going to own the rights to Kingdom of whatever the heck it's called.

This is what happens when you borrow a fuckton of money and barely release anything. A revenue stream is kind of a vital part of any business.

The State of Rhode Island Presents: Kingdom of Amalur: Rekoning - Copernicus Online

Avatar image for drdarkstryfe
#29 Posted by DrDarkStryfe (2119 posts) -

And now this has become a political scandal.

A shame to hear this, I really enjoyed my time with Amalur, and the studio looked to have the chops to put out some quality work. I feel even worse for the workers, they are the ones getting the raw end of this.

Avatar image for freakin9
#30 Posted by freakin9 (1226 posts) -

Reckoning indeed. Reckoning... indeed.

Avatar image for dead_eye_sam
#31 Posted by dead_eye_sam (39 posts) -

Whoa.... I wonder if 38 is going to survive this... I hope they do.

Avatar image for laserbolts
#32 Posted by laserbolts (5506 posts) -

Even though Amalur was shit I do feel bad for the people at 38. Hopefully they can bounce back.

Avatar image for mrmazz
#33 Posted by MrMazz (1182 posts) -

Daaaamn I had no idea this was actually kind of big until one of my friends mentioned it and isn't a gamer in anyway.

Avatar image for arbitrarywater
#34 Posted by ArbitraryWater (14792 posts) -

Well, they're pretty much screwed.

Avatar image for shaanyboi
#35 Posted by Shaanyboi (1545 posts) -

Shit... :(

I wish all those let go the best.

Avatar image for foggen
#36 Posted by Foggen (1026 posts) -

SAVE GALLUP

Avatar image for mpgeist
#37 Posted by mpgeist (664 posts) -

Bloody sock can't save you now Schilling!

Avatar image for werupenstein
#38 Posted by Kidavenger (4206 posts) -

@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.

Avatar image for charaznable
#39 Posted by CharAznable (832 posts) -

Man, sorry to hear this. Best of luck to the employees.

Avatar image for legend
#40 Edited by Legend (2717 posts) -

Can we use the tip jar to tip Rich? Maybe as a thank you for the time trotters episode. :)

Avatar image for leejunfan83
#41 Posted by leejunfan83 (1158 posts) -

Honestly who didn't see this coming years ago

Avatar image for supercubedude
#42 Posted by supercubedude (568 posts) -

Toast.

Avatar image for oldschool2112
#43 Posted by oldschool2112 (102 posts) -

"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."

The real criminal in this situation gets to walk away clean after hosing the people of R.I.

Avatar image for blacklab
#44 Posted by blacklab (1994 posts) -

Damn, Schill got phat fast

Avatar image for slightconfuse
#45 Posted by SlightConfuse (3996 posts) -

wow that sucks and is that even legal to skip payroll, unless they are getting it back next cycle

Avatar image for drrandle
#46 Posted by DrRandle (1376 posts) -

I'm curious what EA's input on this one since they were publishing. Were they just contracted to move the game around, or is there anything they can do to help get this set straight? Not that they likely wood, I'm just more curious than anything.

Avatar image for alternate
#47 Posted by alternate (2823 posts) -

Delaying payroll could be a valid, if desperate, tactic if they were close to shipping the game but with no sign of income in the near future it is just postponing matters at the expense of working stiffs.. Also 300 full time employees is just rediculously over ambitious for a first time project.

Avatar image for christilton
#48 Edited by ChrisTilton (182 posts) -

This was unfortunately inevitable. I can't think of any startups that were funded by millionaires who have no idea how to make games that lasted more than a couple years, and that's simply because it takes that long to burn through all the money.

Have there been any startups in the last 5 or 10 years that started with millions that ended up being successful and are still around? I guess there must be at least one?

I hope Rich updates his resume.

Avatar image for zaxex
#49 Posted by Zaxex (626 posts) -

Video game development shouldn't be this risky. It's common to hear people getting fired or studios closed because a game didn't sell as well as they would've liked.

The medium seems to be growing, I just hope that it becomes more sustainable.

Avatar image for legend
#50 Posted by Legend (2717 posts) -

@laserbolts said:

Even though Amalur was shit I do feel bad for the people at 38. Hopefully they can bounce back.

I still haven't played it myself, but if the reviews are any indication, Amalur actually seems to be a pretty good game.

This edit will also create new pages on Giant Bomb for:

Beware, you are proposing to add brand new pages to the wiki along with your edits. Make sure this is what you intended. This will likely increase the time it takes for your changes to go live.

Comment and Save

Until you earn 1000 points all your submissions need to be vetted by other Giant Bomb users. This process takes no more than a few hours and we'll send you an email once approved.