38 Studios: Another Angle

Posted by Stropp on May 30, 2012 Curt Schilling made some comments about the 38 Studios situation today that goes some ways to clarifying what went wrong over the last week. While I still think the business was badly managed, the lack of communication between management and staff being the most telling sign of mismanagement, it appears that the state of Rhode Island bears some of the blame too. From what Schilling said, the studio was negotiating with investors to provide funds to help pull them out of trouble when the Governor broke confidence and made a number of public statements that scared the investors off. There was also an alleged broken promise for an approval of tax credits. If what Schilling says is true, it doesn't look like Rhode Island is a trustworthy government to do business with. The question is, if the state hadn't hurt investment in 38 Studios and had kept their deal with the tax credits, would 38 Studios been able to survive to bring its games to completion?

38 Studios Shuts Down

Posted by Stropp on May 25, 2012 Sad news today. 38 Studios has effectively closed down operations, laying off all employees at Rhode Islands, and at Big Huge Games. (Source: Kotaku) I made the observation a few days ago that due to 38 Studios not making payroll, the odds were that it would share the fate of other business who did not make payroll. Unfortunately, this fate occurred very quickly after the initial reports. I was hoping that 38 Studios might be given a reprieve by their creditors or find an angel investor. The credit economy isn't too flash right now with the European debt crisis, so no luck there. In 38 Studios case it turns out that not only had management failed to make payroll, they had also stopped paying health insurance. Of course the staff had not been informed of any of this. It was only found out when an employee's pregnant wife was told by her doctor. None of the blame for any of this should fall on the developers, artists, and ancillary workers. These folks are now without jobs or health insurance. In a tough economy life is about to become more difficult for a lot of people. No, any blame should be laid squarely at the feet of management. It's quite obvious looking at the screenshots that have come out of the studio in the last few days that the game was progressing well, and looking great. The people who were doing their jobs did so well. There are a bunch of thoughts circulating in my head at the moment. Things like whether or not studios should attempt a AAA MMO as their first game; will small scale indie MMO's like Wurm Online or Realm of the Mad God save the genre; the 'sameness' of the AAA MMO scene. But I'll leave that to later. For now I just want to wish the ex-employees of 38 Studios and Big Huge Games all the best and hope you folks find something else quickly.

38 Studios Won’t Be Releasing Its MMORPG

Posted by Stropp on May 18, 2012 38 Studios financial woes have been in the news over the last week. Despite not being able to make loan payments to Rhode Island, there were sounds coming from the administration that it would try to make it work. But today there is news that 38 Studios has failed to pay its employees, and has laid off temp and contract workers. That's the worst kind of news that an investor can hear. When a company can't make payroll, it's not generally long for the world. What I'm wondering is where that $75 million got to. Schilling, as I understood it, invested something like $30 million of his own money, which coupled with that $75 million from RI provides a bankroll of over $100M. They've had a game release which presumably did well too. Where is all the cash? It's not like Project Copernicus has the scope of the $300M budget for SWTOR. Or does it? In anycase, it's probably not wise to get your hopes up for the 38 Studios MMORPG. Not unless an Angel Investor swoops in at the 11th hour. Or another studio buys the IP and development assets.

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