38 Studios and Big Huge Games shut down
Update: "A companywide lay off is absolutely necessary. These layoffs are non-voluntary and non-disciplinary," reads email to staff
UPDATE: WPRI has obtained the email reportedly sent to all 38 Studio employees.
"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," reads the email.
"This is your official notice of lay off, effective today, Thursday, May 24th, 2012."
According to WPRI, 38 Studios employed 379 full-time employees.
Original story:
Sources have told Polygon and Kotaku that 38 Studios and its subsidiary Big Huge Games have both laid off all employees. This follows the departure of 38 Studios CEO Jen MacLean and senior vice president of product development John Blakely. One of the sources sent Kotaku an email detailing the ongoing situation.
"38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered," began the email. "We have not received a paycheck since April 30th. On May 15th, we found out we were not getting paid when our checks did not hit our accounts. Our medical insurance runs out tonight at midnight. We found this out when an employee's pregnant wife was told by her doctor, this was on Tuesday 22nd May this week."
"The company has not communicated anything concrete to the team throughout this process, leaving team members to figure out insurance stop-gaps (where people could afford it), etc. on their own."
Sources also mentioned the same situation to Joystiq. The news was seemingly confirmed by Big Huge Games lead world designer Colin Campell on Twitter.
"Big Huge Games was home for my wife and me for our adult lives so far. I'll miss it terribly, but so proud. Good night and good luck," he tweeted today.
38 Studios has been dealing with financial trouble since it missed it loan payment of $1.125 million to the Rhode Island Economic Development Corporation. The company later made its payment, but doing so put the studio in a dire financial situation. There is a press conference being held this evening to give an official statement of the status of 38 Studios.
Like many times a studio shuts down, it's a damn shame. We hope that those affected find new work soon.
This kind of behaviour is sadly far too common in the games industry, we've seen it happen a couple of times with prominent developers in this country recently too.
I've said it before, but if your company's that far in the hole and there's no realistic prospect of turning it around, it's time to wind it down gracefully and make sure you look after your employees, not play for time and expect them to (unwittingly, by the sounds of things) work without pay and benefits for almost a month before telling them they don't have a job anymore.
At the very least you owe it to your employees to be straight with them about what's going on, and warn them in advance that they might not get paid.
Sadly, in cases like this the people responsible for the train wreck generally go merrily on, often picking up the company's remaining assets at a knock-down price while the people who worked for them end up out of pocket and out of work.
When you hear of things like this, you do start to appreciate some of the things that we take for granted in the UK - the NHS and redundancy pay amongst other things...
Hopefully everyone from these studios will find their feet again... and hopefully the residents of Rhode Island won't, as earlier reported, be left footing the bill for this.
Seems to happen a lot more in video games than most other things.
@ Bruce
Maybe because long development times and all associated costs aren't weighed up against number of possible customers? Other industries go overboard on expenses, but make them back over the long-run due to sheer numbers of customers in foreign markets and home-media (and by "other industries" I'm mostly thinking of the TV and movie industries).
Edited 1 times. Last edit by Morville O'Driscoll on 25th May 2012 11:31am
So sad to see this STILL happening because studios aren't adapting to development costs on current machines.
Edited 1 times. Last edit by Daniel Hughes on 25th May 2012 12:47pm
That's about as much as I dare say on the subject.
I really feel for these guys, its really bad to lose your job and medical insurence.
But i keep wondering, why game developers keep adding people to their development teams if costs are so high. Games like the original Bioshock, half life 2 even resident evil 4, I doubt had as many people, yet Resident evil 6 has 600 people to make the game? Seriously??? Resident Evil 4 was easily the best and didnt require that many people. i dont know how true the article is but damn... thats alotta people. Then they complain that they are losing money.
http://www.destructoid.com/600-people-involved-in-making-resident-evil-6-220408.phtml
It is such a shame, obviously for all the staff, but also because interviews indicated a very interesting, ambitiously scoped project.
In all honesty, his expectations were never grounded in reality, and therefore not feasible. He should've spent more time studying business, and less time playing WoW.
I feel sorry for the poor staffers who were stuck working for a month with no pay, and will likely not see it. They deserved better. RI's taxpayers deserved better, too. Not cool of Curt to stick an already cash-strapped state with another $50mil in debt.
There were nearly 400 people here suddenly left high and dry without salaries which I am sure they desperately needed - some men had very pregnant wives who needed the medical insurance too.
The 38 Studio Directors and CFO sidekicks are a flipping joke. They are a disgrace to their fellow Americans - the games industry as a whole and should all be sent to prison for what they did.
Surely there ought to be some federal accountability to the US government here ?
Let's hope all the staff find new jobs soon. Don't misunderstand me - The States can be a good place to work for a fast buck - just make sure you keep enough money in the bank, just in case.
Regardless, this has been a dangerous generation, and 38 Studios shouldn't have tried to leap straight into full-on AAA development. Safe and successful (and cheap) projects that could make good money would have been a better start. They should have taken a smaller start-up loan and started with a smaller studio. You have no buffer if you fail, and they did fail.
I really hope Sony and Microsoft are smart enough to see the danger a major tech and cost leap could pose to the console industry next generation, and I hope publishers start taking more cues from the balanced PC market, where games of various levels of production cost and marketing are successful, rather than only blockbuster AAA projects and the occasional PSN game.
It's a tough industry right now, and it's going through major changes with publishers failing to find a balance in budget and production quality. I hope the best for all the former 38 Studios members. This was an unfortunate incident that may have been avoidable with more restraint and foresight in development.
"But i keep wondering, why game developers keep adding people to their development teams if costs are so high."
I heard that one of the conditions for receiving the loan from the state was that the company had to hire around 300 people. It was kind of like a jobs program.
Edited 2 times. Last edit by Gary LaRochelle on 28th May 2012 6:50pm