Financial Woes at 38 Studios; Fate of Amalur?

Last we reported, Kindoms of Amalur developer 38 Studios was 1.125 million dollars behind on its loan from the state of Rhode Island. Since then, a hand-delivered check for the overdue $1.125 million payment was returned by the Rhode Island’s Economic Development Corporation to 38 Studios after the company’s chief financial officer said there were insufficient funds to cover it.

Oops.

The statement from the Office of Governor Lincoln D. Chafee reads:

“A check from 38 Studios was hand-delivered to the Rhode Island Economic Development Corporation at approximately 5 o’clock this evening. However, upon learning from the Chief Financial Officer of 38 Studios that there were insufficient funds to cover the payment, the check was returned. The EDC remains willing to accept readily available funds.”

It gets worse. 38 Studios was also unable to pay its employees, and all temps and contractors at the studio were let go this week.

Are these the death knells of a promising developer? If 38 Studios does fold, Rhode Island taxpayers will have to repay a $75 million bond (plus interest) through 2020, and they’ll own the studio’s intellectual property. What would this mean for the future of Amalur?


via Joystiq

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