38 Studios and Big Huge Games Shutting Down

 

Rumors about the demise of 38 Studios are now confirmed. In addition to CEO Jen MacLean and senior VP of product development John Blakely, 38 Studios and its subsidiary Big Huge games have laid off all employees and will shut down.

Despite the generally positive response to debut game Kingdoms of Amalur: Reckoning, 38 Studios has been battling insolvency since mid-May, when it missed a $1.12 million loan payment owed to the state of Rhode Island as part of a $75 million underwriting deal designed to lure the company to Providence. Attempts made last year to apply for tax credits ended in failure, and the crisis was compounded when it was revealed that the studio was unable to meet payroll expenses.

The fallout has spread to the Rhode Island Economic Development Corporation, which brokered the loan deal despite warnings about potential risk. RIEDC Executive Director Keith Stokes tendered his registration to Governor Lincoln Chafee last week; he was followed today by Helena Foulkes, vice chairwoman of the RIEDC board.

Though Chafee opposed the loan deal as a gubernatorial candidate in 2010, he now has to deal with the consequences of 38 Studios’ collapse, which could put Rhode Island taxpayers on the hook for up to $112.6 million (though that number could also be considerably less).

Since 38 Studios is now shuttered and soon to be in default on its loan, the state of Rhode Island, under the terms of the loan deal, is the new owner of all of the company’s IP, including the anticipated Kingdoms of Amalur MMO tie-in “Project Copernicus.” According to experts, however, selling these assets at auction is unlikely to recoup enough money to defray the loan.

The founder of 38 Studios, former Red Sox pitcher Curt Schilling, refused to comment on the situation today, despite repeated attempts by various media outlets. Given his high profile and the political context of the company’s demise, more developments in the story are expected soon.

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4 Comments on 38 Studios and Big Huge Games Shutting Down

Kevin

On May 24, 2012 at 5:34 pm

I just wanna know one thing:

In order for things to break even, KOA would’ve had to sell roughly 3 million copies. Who the hell thought this was a realistic projection?

Xian

On May 25, 2012 at 3:04 am

They took a hell of a gamble, they seemed very confident, and had the talent to seemingly pull out a blockbuster hit with ease.
They lost the gamble, and lost badly.
The game wasn’t exactly bad, but with all the time and people behind the project it should have been much better than above average.
They introduced a new IP to the world of RPGS, instead of taking it slowly and not investing so much right from the start.
They bragged how it would change RPGs, how it will “throw” the chains off traditional RPG elements and would just be great.
Ken Rolston was the one to exclaim it the loudest.
I understand a developer needs to be confident in their game and support it.
However they hyped it up so much, people couldn’t help but be let down by it.
All the talent behind this game, from story telling, art direction, to the production itself felt like a C+ effort.
The fighting mechanics were the only thing, I can say were amazing, but the fixed camera ruined it in many ways.
Wish luck to all those looking for new jobs.

Marry Wender

On June 21, 2012 at 7:26 am

Great posting! I really like the way you are sharing the unique take on this subject. Keep it up!

Julius Huhn

On August 15, 2012 at 11:21 pm

Haha right….