38 Studios Lays Off Entire Staff

Outamyhead

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Well done Rhode Island, you now own an empty shell of a company and your loyal citizens are going to have to pay up the money lost on this.
 

FranklyShankly

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I assume this means Copernicus is dead?

I wonder if someone will buy it in bankruptcy for cheap and finish it up.
 

Neocorteqz

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He had a loan approved for 75 million but only borrowed 49 million. Furthermore Rhode Island promised the 75 million in return for Schilling moving the company to Rhode Island.

Look, I'm pissed off as well that the taxpayers have apparently lost 49 million but the facts are apparently Schilling himself has lost 30 million (source) trying to build this company. Portraying him, as others have done, as someone who stole taxpayer money seems irresponsible. The way I look at it, both RI and Schilling gambled on the company being successful and they both lost.
I can agree with that.

They both lost. But who has to pick up the pieces? That's the issue at hand.
 

ParasiticJ

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Anyone else curious how they spent that much money? They must have totally lost control on the finances. I don't know a ton about the industry, but why did they need 413 employees?

Separate aside: Put the game on Steam for $5-$10 and I'm (and probably many others) would be in.
 

bh192012

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They didn't need that many employee's. They seriously let things spiral out of control.
 

chockomonkey

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Amen on that. All of these politicians are a waste.

They're more than a waste. They're helping fuck the US over hardcore. Lobbyists shouldn't be able to count on being able to bribe our politicians, yet they can and do. The entire political system is that corrupt.
 

Balkroth

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They didn't need that many employee's. They seriously let things spiral out of control.

I thought the number (379) of workers was pretty common for a high production value mmo (and some of that staff was probably working on some of the KoA post launch fixes and what not)
 

pelo

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He had a loan approved for 75 million but only borrowed 49 million. Furthermore Rhode Island promised the 75 million in return for Schilling moving the company to Rhode Island.

Look, I'm pissed off as well that the taxpayers have apparently lost 49 million but the facts are apparently Schilling himself has lost 30 million (source) trying to build this company. Portraying him, as others have done, as someone who stole taxpayer money seems irresponsible. The way I look at it, both RI and Schilling gambled on the company being successful and they both lost.

No no no and no.

207032d1337330716-funny-strange-random-pics-curt-schilling-motivation-motivational-green-monster-payroll-default-loan-75-million-30-34-1.5-1.jpg


207033d1337330903-funny-strange-random-pics-curt-schilling-facebook.png


He stole taxpayer money by repaying himself with people's tax money. Instead of him fitting the bill (he made his 30mil back he originally "invested") the taxpayers are out 75mil and the company went down the crapper.

What risk was there? He didn't risk anything other than his reputation -- which is now royally fucked mind you but that should be the least of his worries. Hell, I'll "invest" millions of dollars too if I can get every red cent of it back from the government if it all falls apart.
 

Bash

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Do we have a source saying he repaid his initial investment from company funds?

If this is true the shitstorm that will ensue will be epic.
 
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Grant Kirkhope got caught in this mess. :( He does great work though, probably won't be unemployed for long.
 

pelo

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Do we have a source saying he repaid his initial investment from company funds?

If this is true the shitstorm that will ensue will be epic.

That's what the rumor is. They bounced on a 1.1m check and somehow managed to burn 75mil in a year and looked for private investors earlier this year (apparently 75mil wasn't enough) who naturally turned them down. They were also late on employees wages by a month.

http://www.boston.com/businessupdat...ame-company/cfmCzT1AuMiqH1Nx0WlJuM/story.html

The company is in financial turmoil as it struggles to bring its major video game, code-named Copernicus, to market; earlier this week the state revealed 38 Studios missed a $1.1 million payment it owed Rhode Island, and then tried to deliver a check Thursday night for the amount but officials refused to cash it after learning the company did not have sufficient funds. It has also not been able to pay its employees this week.

Meanwhile, Schilling, the company’s founder and chairman, took to Facebook Friday morning to deny reports that suggested he used state funds to repay money he had poured into the company. “That is not true,” he wrote on his Facebook page Friday.
 

pelo

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Just a bite more. Can't edit in this forum :(

What Vahey may be referring to is reports of a $4 million line of credit that Schilling opened for 38 Studios in 2010. Documents show that the line of credit was paid back with money from the $75 million loan received from Rhode Island.

They couldn't find private investors because nobody would take that gamble. Apparently, Schilling wasn't going to take it either.

Schilling has made no comment to the media since news about possible troubles with 38 Studios first cropped up on Monday. On Tuesday, we reported that the studio had missed the first annual payment on the $75 million taxpayer-backed loan Rhode Island gave to the company to move to the state from Massachusets.

So a line of credit paid back by taxpayer dollars. Essentially paying off a loan with another loan and the funds dried up completely. To boot, there was talk of him paying himself back money with that 75mil paycheck he received from the state of RI.

This was from the beginning a state-run and state-backed game studio with a sprinkling of private funds from Schilling and some credit. They never produced the 450 supposed jobs for the state (less than 400 total and that was split between Maryland and RI) and were operating in the red for their entire existence.
 

Stiler

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KoA was a fun game and worth the price imo.

IT sold well enough to be profitable plus for a new IP, 1.2 million is GREAT sales. The gov is a MORON for saying Curt lied abotu those sales and pointing to the NPD numbers, as those ONLY count brick and mortar physical copies, not digital sales which make up a HUGE chunk of pc sales these days (everyone I know that bought it got it digitally) and EA even expects to make 50% of it's profits from digital sales in the near future, over 1b + profits from last year for them alone.

The main problem with 38 studios wasn't that KoA was a poor game or that it didn't sell enough. It was that they tried not only to make KoA, but to also work on an MMO.

MMO's are notorious for being the most costly type of game to make. Not only do you have to fillt he world with more content then any other game (I mean you can't just do a 5-6 hour main storyline like many AAA sp focused games these days) but you also have to havea huge team for it from world design, artists, to CS, Server/IT guys, and unlike other games you do NOT ship the game then get to let them move on to another game or something. You have a huge up-keep cost with the mmo genre as you need the CS/server guys and developers to make new content/patches, etc.

It was a terrible business decision to develop a sp rpg on the scale of KoA and an mmo at the same time. They should have simply made KoA, see how well it did, then move on toward an mmo or perhaps first a sequel to KoA then the mmo after getting a publisher on board to fund it rather then taking money from the state.

They took on way too much work for a new company and it sucks because KoA, while it had it's problems (lackluster story, weak art style, and lack of difficulty) what was there could be fun, it still has one of the best combat systems in an action rpg (an dput Skyrim and most others to shame).

Curt should have never tapped RA or Todd McFarlane, while both are decent at what they do in their own regard, neither of them really know about games and what they delivered for KoA in terms of story/lore and Art style were lackluster, uninspiried, and just all out generic. Because of that the game just didn't really have anything "unique" or it's own "soul" as far as games go. Todd shoulda gave it a more spawn like style rather then going generic over-stylized WoW style, RA shoulda thought of something more interesting then Tolken'ish fantasy (like he did for Drizzit, making him the exact opposite of the usual Drow race).

If they could have just had the time and money to have made a sequel and change some things around I could have seen the series becoming much larger later on, but the chances of that happening aren't high.

Most of all it sucks for all those people that got laid off, who now have to find new jobs at this time in the economy. I hope they land on their feet and do so.
 

demingo

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Most of all it sucks for all those people that got laid off, who now have to find new jobs at this time in the economy. I hope they land on their feet and do so.

Turbine, developer of LOTR/DND Online based out of Boston, held a job fair in Providence this week. So hopefully at least some ex 38 employees will land a new gig soon.
 

Rizen

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I'd say that it's a little early to be talking about filing criminal charges or lambasting Curt Schilling until the facts are all reported, but this is the internet, we demand heads :rolleyes:

Sucks, I was always interested in KoA but I hadn't gotten around to buying it yet.
 

chockomonkey

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I'd say that it's a little early to be talking about filing criminal charges or lambasting Curt Schilling until the facts are all reported, but this is the internet, we demand heads :rolleyes:

Sucks, I was always interested in KoA but I hadn't gotten around to buying it yet.

Nevermind Schilling, the governor of RI needs to be ejected from office. It's a shame the people who are capable of fucking over the masses are the people who can decide it's not illegal to fuck over the masses.
 

Rizen

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Nevermind Schilling, the governor of RI needs to be ejected from office. It's a shame the people who are capable of fucking over the masses are the people who can decide it's not illegal to fuck over the masses.
Yeah, I agree. Any state that would loan a startup company tens of millions of dollars to develop an MMO is fucking out of their mind. Schilling may have mismanaged the company to a degree (who knows at this point) but the blame for the taxpayer losses should rest squarely on the government who approved this deal.
 

BBA

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Life is luck. There is maybe one person I would absolutely trust with investment advice and that is Warren Buffet , everyone else can shut the fuck up.

You would trust a lying stealing cheating tax evading piece of shit just because he made a fortune being an asshole?
 

Godmachine

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You would trust a lying stealing cheating tax evading piece of shit just because he made a fortune being an asshole?

Lying , stealing , cheating and tax evading piece of shit who gave away 95 percent of his personal fortune to Bill Gates and generated another $20 Billion within a year and half afterword.

If I was going to invest heavily in something I would follow his trend. And at least Warren Buffet is open about his profiteering , while the majority of his constituents do all of that .. behind closed doors and at the tax payers expense.

Interview after interview Warren gives no bullshit advice on investments and is one of the very , very few billionaires that thinks that the rich get taxed very little in this country and he also thinks that its complete bullshit as well that they don't get taxed more.

Name me one of the top 5 richest men in the world that isn't an asshole and didn't get rich by being so and I'll follow their advice.
 

[Spectre]

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No no no and no.

207032d1337330716-funny-strange-random-pics-curt-schilling-motivation-motivational-green-monster-payroll-default-loan-75-million-30-34-1.5-1.jpg


207033d1337330903-funny-strange-random-pics-curt-schilling-facebook.png


He stole taxpayer money by repaying himself with people's tax money. Instead of him fitting the bill (he made his 30mil back he originally "invested") the taxpayers are out 75mil and the company went down the crapper.

What risk was there? He didn't risk anything other than his reputation -- which is now royally fucked mind you but that should be the least of his worries. Hell, I'll "invest" millions of dollars too if I can get every red cent of it back from the government if it all falls apart.

A meme is not a source ;)


Well actually, with journalism standards and attention spans today it might be.....
 

hellokeith

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Let's say 50% went to salaries. $37,500,000 / 375 employees = $100,000.

$100k is well-above the average salary in RI. Yes this is a simplification, but makes you wonder just where all that money went.
 

Rizen

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You would trust a lying stealing cheating tax evading piece of shit just because he made a fortune being an asshole?
I'm sorry, but are you retarded? The man has generated vast fortunes for many, many people besides himself, and has pledged almost all of his personal fortune to charity. He doesn't evade taxes - he follows the tax code as it is set forth. Blaming him personally for how capital gains works is asinine. You would do the same if you were in his position. He has personally advocated for more fair taxation on the rich. I mean geez, the man still lives in a five bedroom house he bought in 1957.

There are many rich pieces of shit, but Warren Buffett is not one of them.
 

Bash

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Nevermind Schilling, the governor of RI needs to be ejected from office. It's a shame the people who are capable of fucking over the masses are the people who can decide it's not illegal to fuck over the masses.

As far as I know the current RI Gov had nothing to do with this deal.
It was under the last Gov, why would he have to be ejected?
 

delahaya

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Seriously, 372 full-time employees to make ONE game? No wonder they are going under! Bethesda used the largest team they've ever had to make Skyrim and it was around 100 people. Fallout 3 was made with 70 people. I am speechless.
 

delahaya

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Godmachine,

Were you actually being serious? Berkshire Hathaway is behind $1 billion in taxes covering the last 10 years. Warren Buffet is all for higher taxes on OTHER people, he doesn't pay his! Petty jealousy and envy should not be a life philosophy.
 

Stiler

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Seriously, 372 full-time employees to make ONE game? No wonder they are going under! Bethesda used the largest team they've ever had to make Skyrim and it was around 100 people. Fallout 3 was made with 70 people. I am speechless.

They were developing an MMO on top of KoA, not just for KoA.
 

Disposed

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From what i have read on this (since its scattered all over the damn web) it seems like Schilling horribly mismanaged the company and its assets.

Whether or not Schilling was a crook is painfully obvious. That "30 mil" he ponied up himself was just a claim by him. The reality is the loan he took out to start the project was paid back with that tax payer money. Even the way he spun things screemed crook to me the whole time. Going on about how wildly successful that one game was that sold 1.2 mil when it needed 3 mil to break even. Really? First off how did it need to sell 3 million copies to break even? What idiot managed the finances on that game?

How about the fact that they stopped paying wages over a month before all this happened? He didnt notice that all his money was gone? Yeah fucking right, he knew the coffers where tapped and just had that huge staff keep working with no intention on paying them for as long as he could get away with it.

I remember the whole Brad Mcquaid sigil debacle with the rumors of serious cocaine abuse and the parking lot layoffs but even that pails in comparison to this. At least that wasnt done on the taxpayers dime.

One last thing. Some people dont seem to realize that the governer that approved this mess is no longer in office and its the new one that made the decision to not give any more money. He has taken a lot of heat over this but i say good job. This should have never been allowed to begin with. I still shake my head thinking about the comments from people when this all started about how great of an idea it was.
 

Bash

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One last thing. Some people dont seem to realize that the governer that approved this mess is no longer in office and its the new one that made the decision to not give any more money. He has taken a lot of heat over this but i say good job. This should have never been allowed to begin with. I still shake my head thinking about the comments from people when this all started about how great of an idea it was.

ding ding, the dude just walked into this shitstorm and did his best to try and mitigate tax payer losses.

Hopefully they can figure something out, maybe see what the IP can fetch to help lower the burden.
 

OpStar

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Whether or not Schilling was a crook is painfully obvious. That "30 mil" he ponied up himself was just a claim by him. The reality is the loan he took out to start the project was paid back with that tax payer money.

Not true at all.

http://www.boston.com/business/technology/innoeco/2010/02/a_business_school_grilling_for.html

It was April 2009 and Schilling felt he had taken 38 Studios to the brink, extending himself and his family both financially and personally. ...He admitted [while considering the acquisition of another gaming company, Big Huge Games], "I have put the majority of the money I've earned in my life on the table. If I make another financial investment, I will have crossed the point of no return from a personal investment and company standpoint.

He was asked if he used the RI money to recoup his investment and said he did not. It's a false allegation.
 

Disposed

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Not true at all.

http://www.boston.com/business/technology/innoeco/2010/02/a_business_school_grilling_for.html



He was asked if he used the RI money to recoup his investment and said he did not. It's a false allegation.

You see all people have to defend schilling with is HIS WORD. :rolleyes:

He SAID he invested 30 million, he SAID he didnt use taxpayer money to pay back the loans he took out for the studio previously.

Funny how theres no proof of his 30 mil investment yet proof of him paying back that loan with tax dollars. :rolleyes:

http://www.boston.com/businessupdat...ame-company/cfmCzT1AuMiqH1Nx0WlJuM/story.html

Separately, the company told investors it used the state-backed funds to help pay off a $2.5 million credit line that the company had taken out and Schilling had personally guaranteed.

He says he didnt yet the official statement from his company to investors is that he did. Open your eyes man thieves lie.
 

OpStar

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It isn't just his word, it was a economic study done by Harvard. By April of 2009 he had invested the majority of his career earnings into 38 Studios and that was before they bought BHG. He owned 82.5% of the company and was basically financing it by himself. It wasn't until April of 2011 when they started getting RI money that any significant capital was giving to 38 Studios by anyone other than Schilling himself.
 

OpStar

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Separately, the company told investors it used the state-backed funds to help pay off a $2.5 million credit line that the company had taken out and Schilling had personally guaranteed.

That says they used some of the RI money to pay off a $2.5 million credit line that Schilling had backed. It says nothing of them using any of the $48 million they got from RI to pay back basically all of Schilling's lifetime earnings which is what he had invested by that point. You're extrapolating in the worst way.
 

OpStar

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Ya:

The claims that Schilling extended a LOC to the company and that he invested $30 million in the company are not in conflict. The company existed for 4 years before the RI loan, spent a lot of money getting talent and buying another company, and there are no reports of other investors. Schilling was the major source of cash before the first game. The LOC is just a small part of his financing the company and there would be nothing wrong with it being paid off from new financing as long as the company didn't stiff earlier creditors or violate the terms of the RI loan.
 

Disposed

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So? Even if it is true about the 30 mil it dont change everything else. He is still either a crook or the biggest incompetent fool in the gaming industry.

Im sure there will be investigations and i for one am very curious too see whats brought to light. I have a very hard time buying that schilling was not up to some shady shit with that money. It just makes no sense.
 
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