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38 Studios struggles to remain solvent

38 Studios struggles to remain solvent

Tue 15 May 2012 7:35am GMT / 3:35am EDT / 12:35am PDT
BusinessDevelopment

Local government intervenes to protect $75m loan, admits "tight time-frame" to achieve resolution

Kingdoms of Amalur developer 38 Studios is struggling to stay afloat, forcing local government in Rhode Island to intervene.

According to a report in the Providence Journal, Lincoln Chaffee, Governor of Rhode Island, has been meeting with representatives from the 38 Studios over the last few days in an effort to "protect" the $75 million incentive the state offered to lure the company away from its Massachusetts headquarters.

Precise details of the meetings are still secret, though Chaffee has admitted that he is working under a "tight time-frame" to "keep 38 Studios solvent."

"We're concerned and just doing everything possible to ensure that 38 Studios stays part of the Rhode Island community," Gov. Chafee told WPRI. "We're working on different issues with them.

"It's always been a volatile industry to be in. That's just the risk you take when you get into the business"

Gov. Lincoln Chaffee

"It's always been a volatile industry to be in. That's just the risk you take when you get into the business."

The $75m loan was awarded by the Rhode Island Economic Development Corporation before Gov. Chaffee took office, and he spoke out against it during his 2010 election campaign. 38 Studios moved to Providence, R.I., in April 2011, pledging to employ 450 people in the area.

According to a disclosure notice obtained by WPRI, 38 Studios had 379 full-time employees spread between its two offices - as well as 34 full-time contractors, 8 interns and 18 listed job openings - as of March 15 this year.

At that point it had received $49.8 million of the loan, all of which is being used to fund the development of its ambitious, and still announced, MMO 'Copernicus'.

However, concerns over the stability of the company are longstanding. Last June, PricewaterhouseCoopers admitted "substantial doubt" over whether 38 Studios would remain solvent. More recently, the company backed out of the E3 Expo.

38 Studios was founded in 2006 by the former baseball player Curt Schilling. It attracted attention with the scale of its ambitions, assembling a crack team - including former Elder Scrolls designer Ken Rolston, comic artist Todd McFarlane and author R. A. Salvatore - to develop a AAA fantasy MMO at a time when the genre appeared to be in decline.

The universe for the MMO was established in 38 Studios first release, Kingdoms of Amalur: Reckoning, which was warmly received by critics and performed respectably at market.

4 Comments

Morville O'Driscoll
Games Blogger & Journalist

1,520 1,316 0.9
Damn shame about this. Though I do question their desire to make an MMO - I imagine they could fairly easily just turn what they've already got developed into single-player sequels or expansion packs. The MMO market is already over-crowded, and doing yet another fantasy MMO with GW2 on the way? From an outside perspective, that's not a great business decision.

Posted:2 years ago

#1

Terence Gage
Freelance writer

1,288 120 0.1
As I understand it, the development of Copernicus is a condition of receiving this loan -- however, given the state of the MMO market, surely their best bet would be to scrap it entirely, probably shed half of their staff and instead shift work exclusively to a KoA2. Spend a couple of years really honing the game, address fan and critical concerns and then launch it in late 2014. Could they stay afloat long enough to do this? Most of the critical feedback toward Reckoning was very positive, although it appears to be a bit soulless and lacking a certain spark. Certainly the structure for something excellent is in place, and I think they perhaps set their sights a little too high - after all, Bethesda have been working on The Elder Scrolls for almost 20 years, and it too wasn't a runaway success until its third or arguably fourth iteration.

Good luck to 'em, and I hope they manage to stay afloat. I can't help but think though that this MMO will be the end of them.

Posted:2 years ago

#2

Kevin Patterson
musician

185 99 0.5
Kingdoms is a great game, and I want more games like that, and not that into the MMO idea. I know the world is perfect for an MMO, and I'd check it out, but more games like Kingdom with refinements would be better. I hope this works out!!
I'd love to see Kingdoms become a series that just keeps improving.

Posted:2 years ago

#3
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The irony.

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#4

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