[UPDATE]: Source says beleaguered 38 Studios and Big Huge Games sent out pink slips to all employees, believed to number close to 400. Rhode Island governor calls Kingdoms of Amalur a "failure."
It appears 38 Studios and its subsidiary Big Huge Games are no more. The Verge and Joystiq heard from sources today that all employees at Curt Schilling's Providence, Rhode Island-based and Maryland-based development studios have been let go. The company put out just one game in its lifetime, February's well-received role-playing game Kingdoms of Amalur: Reckoning.
Troubles at 38 Studios first came to light earlier this month, when reports from the Rhode Island government indicated that the company had failed to make a $1.125 million loan payment to the state's Economic Development Corporation. The studio eventually made the payment, but it also enacted a round of unspecified layoffs. The company's CEO, Jen MacLean, left the studio in March, with senior vice president of product development John Blakely heading out just this month.
The fate of 38 Studios' massively multiplayer online role-playing game Project Copernicus is unknown. Rhode Island governor Lincoln Chafee recently revealed the title was being readied to ship in June 2013. If 38 Studios decides to sell its Amalur intellectual property, it can expect to get $20 million for it, according to one industry analyst.
[UPDATE]: In a press conference this afternoon, Governor Chafee explained that the state had not been informed of the pending layoff of 38 Studios' entire staff. In explaining how the studio hit the skids seemingly overnight, Chafee explained, "The game failed. The game failed." He added that Kingdoms of Amalur: Reckoning would have needed to sell 3 million copies just to break even.
Additionally, Rhode Island's WPRI has a copy of the mass layoff email that was sent to 38 Studios employees. It reads:
The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.
These layoffs are non-voluntary and non-disciplinary.
This is your official notice of lay off, effective today, Thursday, May 24th, 2012.
@gtadude26 I admit that the system was better and less clunky, but now no more Kingdom of Amalur, EA really love to fuck around even though the game was good, perhaps they are jealos of Bethesda Studio and when KOA is not making money like Skyrim, they shoved in what's remain of the game revenue and kick out their staff to starve. T-T
I don't get it, 3 million copies would be 1000 peoples for one year with salaries at 100K$ - I doubt they paid that much. I got an impression someone left with a big stack of money in their pockets, just because they could. I hope the matter will be investigated.
putting all the resources into the The Kingdoms of Amalur MMO was a fail. Who the hell made the decision that they'd roll it all out instead of just putting out the small rpg first to see how it went without putting all the eggs in the MMO basket!?
Regardless if one liked the game or not it is still sad to see a new company who took a chance on a brand new IP fail. With all of the 3s 4s 5s and 6s we see tacked onto our games and all of the remakes coming out it really is sad to see new talent die. Also when did getting 1.3 million copies become a failure? Man money really has skewed how we view success now. Anyway good luck to all the 38 studio workers.
costs don't really rise, in fact they decrease. It gets easier to make that stuff. Just look at japanese free software .... if a guy in his spare time pill off something like miku miku dance ... I get suspicious when companies arround here need 3 million copies sold to break even ... sounds fishy... could be money laundering, or could be they just decided they were not getting the 1000% payof they expected, so they sank the ship and left with all the money. the usual golden parachute cheat
@Astarsis EA don't want 3 million copies, they want 30 million copies in order to break Skyrim record, and Activision 4billion?!? record, the only reason EA still not fuck around with DICE and Crytek is that DICE owned the FROSTBITE ENGINE and nearly every EA recent game based on that engine, and Crytek still hold the CryEngine. If EA get hold on both engine, they practically can and will dissolved both company.
Game wasn't for me...talented workers though, definitely give them that for first out of the gates game release. Hate they have to suffer from it. I think they will get absorbed into other companies though...hopefully..as their work can and should be considered high value and development.
If they would have made a patch to fix the game before rushing out new DLC I might still be playing the game along with others. So much went wrong here its a shame because the people who actually made the game are the ones who did things right and they got screwed by the higher ups. Schilling is such a bitch. The sad thing is other then maybe a hurt ego he escapes unscathed.
lesson, dont make something you cant afford and if you do..pay the friggin workers and if you cant, go to prison.
I think workers of the game industry should call for a new way of paying them. half up front and half when its over. A game developer makes what $45'000-$80'000 a year or something? its not as much as you think. They needed to come up with around 18 million to pay 300 workers, $60 x 1.2 million copies sold is $72million , they SHOULD of been paid. This is grose.
@nyran125 So out of the $60, $15 probably goes to the console maker, likely another $15 for the retailer, $5 for the cost, $10 for the PR, leaving probably $10 to $15 to the studio, so no, it's not going to break even.
tatsui, it has not worked the way you describe in a long time. there is a lot of pressure due to the easyness of selling online. some indies devs manage to get millionaires just from online sales.
the cost is arround 1$ all included. dvds are ridiculously cheap. so it's really just the box and manual - if there is one - skyrim was a simple dvd case with almost nothing but the dvd - must have costed 50 cents
what are you callking pr ? publicity ? you don't factor it as per item, and it gets dwarfed by the other costs.
the only real cost is really shipping (distributor) and retail point - who used to take a big chunk and leave 25%, but these days I'm certain they leave over 50% otherwise peoples would stick with amazon.com and let the retaillers sink
no matter how you look at it, slicing 72 by 4 is still 18 million and that's based on a ridiculous staff of 300+ that also sounds odd as a number for a single game. I mean what do they do !!! too many doesn't work faster. they just step on each other feet.
@Astarsis it has been almost a decade since I last worked on video games, so perhaps things has changed for the better. From what I gather, 38/BHG burns about 4M / month to keep running, given your 18M I just don't see how it's sustainable. Too bad for the tax payers at RI, but at least ex-BHG guys can join Epic now.
@rarson It's the Economic Development Corporation of RI. That's what they do. Besides, 1.2-million sales in the first 90 days would be a rousing success for just about any other game development company.
KoA:R was far more arcadey than I had hoped, so I was quite disappointed. Just wasn't my cup of tea. Still, how do you sell 1.2-million copies of your first game in the first 90-days and go belly up? You hire talent like Salvatore and McFarlane and spit out a simplistic, button-mashing, half-hearted facsimile of an RPG, I guess.
@rcarp711 No, you do it by spending far more than you could ever expect to recoup in sales. This is a fault of management allowing massive cost overruns, as explained in the article where it was said they would have had to sell 3 million copies just to break even.
Unfortunate. Hopefully the folks laid off can bounce back and find work quickly and sure they will. What this means for the world of Amalur, it seems no ones for certain. It is really scary how the game studios are here one minute and gone the next. Harsh business.
Once again I'd say that relocation loan killed them off... Why the hell did they take it and where did the money go... If they'd stayed where they were and made the game they'd probably still be in business.
Must be some really shitty people in high up places, all staff layed off and no one payed so they could pay off a tiny part of the loan... Lame.