Layoffs strike 38 Studios

Rhode Island governor Lincoln Chafee confirms beleaguered Amalur developer makes cuts amid ongoing loan negotiations.

Rhode Island-based Kingdoms of Amalur and Project Copernicus developer 38 Studios has enacted a round of layoffs, according to an Associated Press report. Last evening, Ocean State governor Lincoln Chafee confirmed to the news service that the studio has made unspecified cuts to its workforce.

38 Studios has reduced its head count, according to governor Chafee.

According to the report, company founder Curt Schilling brushed past reporters on his way out of a Monday evening meeting, saying only that there is much "misinformation" swirling around. 38 Studios employed 379 full-time employees as of the end of March. It is unclear how many staffers were let go, and as of press time, 38 Studios had not responded to GameSpot's request for comment.

The layoffs follow news from last week that 38 Studios was having difficulty paying Rhode Island back on the 2010 $75 million loan issued to the company to entice it to relocate from Massachusetts to the Ocean State. The company reportedly skipped payroll to find the funds to make good on a $1.125 million payment. Asked about this, Chafee said there had been "a mix of who's made payroll," but did not say more, citing confidentiality agreements.

Despite the troubles at 38 Studios, the company's new massively multiplayer online game Project Copernicus appears to still be in the cards. Last week, Chafee revealed this title is due to ship during June 2013, with 38 Studios following that news by offering a first look at the game, embedded below.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

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Discussion

75 comments
RoadStar1602
RoadStar1602

I could see this one coming when I saw that Kingdoms of Amalur turd. They tried to make that game all things to all people instead of a game that knows what kind of game it is. RPG players don't want arcade-style combat, anime elements and flashy crap uglying up the screen. When I saw the previews for this game, I was immediately turned off. Then they released it for a $60 asking price. That's just too damn much. If it had been a $20 Steam download, I wouldn't have much to say about it. My buddy got burned for the $60 and he facepalmed. I think Curt Schilling's name sold him on it more than anything else. He tried to play it for a few days but just hated it and gave up. 

 

This is a classic case of biting off more than you can chew. 

mike468
mike468

Breaking news here in New England. The entire staff of 38 Studios has been layed off. Basically it sounds like the state of RI (which has pretty much funded the company so far) has cut off funding for the company. They just don't see the company being profitable and don't see a point to pump more taxpayer money into the studio, is the reason they are giving.

soulless4now
soulless4now

I knew this would happen sooner or late. It would be a shame if the studio had to close. 

Nightrain50
Nightrain50

They'd be smart to have patience and wait for the company to make a profit. The loan's already been paid. Forcing them to gut staff and rush product will only hurt the chances of them actually paying the loan back. Better to be paid later than not at all if this ends up folding the studio which is what it looks like might happen.

icym
icym

Never good news for regular people who work hard. I hope you guys are all getting back on your feet soon!

wwlettsome
wwlettsome

So they are struggling financially but their next big move it to jump into the MMO arena?

 

I hope they have a pretty good plan B...

Tanstai
Tanstai

The really stupid part of this is, how did they expect to make payments on a loan, when they don't yet have an income? They should have pushed back repayment until after game launch...when the company actually started to do something to make a profit!

pszone
pszone

this is aslo EA fault and cant wait they go down i hope they go broke as well .

dre256x
dre256x

Chatty governor...

Do the average gamer needs to know this?

rhmercer
rhmercer

What sort of idiot makes a loan of $75 million to any business, let alone a software one?   Oh, of course, and idiot politician - Loonie Chafee by any chance?

AyatollaofRnR
AyatollaofRnR

Seems like the 75 million loan was a bad idea for all parties.

inkyspot
inkyspot

Damn, I guess I won't be sending my Demo reel to that studio.

Ringx55
Ringx55

Just a fyi 38S has not revied a single dime for RI's tax payers. They also have not asked any from them.

hadlee73
hadlee73

To be honest, I think when a Studio/developer starts off their first title should be a smaller game made on a fairly tight budget, so that developers can get used to not over-spending or wasting time and effort on pointless things, half of which get thrown out before the game is completed. The big boys (EA, Activision, Bethesda etc) are all used to throwing money away on titles (and can probably afford to), but if you're new, start small. When you've establish a high-demand IP, then feel free to go crazy.

gullgullgull
gullgullgull

I thought this article was going to be about 38 separate studios getting hit with layoffs, so is it bad that I'm a little relieved to actually read this?

 

It's only because I was wrong, you know.

toddx77
toddx77

I haven't played KoA yet but played the demo and plan on buying it during the steam summer sale.  I do feel guilty about not buying it when it came but I was unemployed at the time and had already pre ordered mass effect 3.  Sadly though publishers will use this to say new IP don't sell and will keep pumping out yearly un original sequels.  I dont know if this truly means anything but where I live someone came into a gamestop asking for this game about a month after it came out and the person working there said no gamestop in the area had even gotten one traded in to them yet because everyone has been enjoying the game.

HaloPimp978
HaloPimp978

Sad KoA was a good game. Hope those let go find work ASAP.

waltzink
waltzink

curt schilling is a typical tea party hypocrite. blasts people that take "handouts", yet now wants the taxpayers in RI to cover his ass. i wish i could say this was hard to believe, but living in boston, and having to hear him craft an opinion about practically everything and turn it political makes this whole situation sound like par for the course for this idiot.

Evilnator
Evilnator

Sorry to hear this... An All-Star team working on another bloody MMO, that's it for them.

 

FreakAche
FreakAche

Get Rich Gallup out of there and bring him back to Gamespot! Or Giant Bomb at this point. As long as he's in front of a mic talking about video games, I'm good!

Darius815
Darius815

Sad. I hope they can somehow get things together. Loved KOA, I also beat Skyrim and working on Witcher 2. Still playing KOA even though i beat the main story line. Looks gorgeous on my PC and the combat is a blast. Makes me sad how we complain about the same old games and when we get a new franchise that is actually really good we don't buy it, or at least pick it apart. Yet games like COD and Halo will continue to sell millions(Like both series, but very burned out on the FPS genre). COD 12 will break all kinds of sales records I'm sure. Resident Evil sells millions even though its crap(yes i have played it, broken mess). I don't get it.

 

HonorOfGod
HonorOfGod

Should have started as an indie... look at all the games that sell well on apps stores for little money and take little money to make but can make you amazing profit. Comon guys its 2012 who des not do indie these days even the creator of Mario and Nobuo Uematsu are working on indie games because they are amazing. You make a profit f that than if you want a big game like this make it with that money.. I still preffer indie do.

xMoonDevilx
xMoonDevilx

Man, never go to work for that company...or that guy. Doesn't pay staff....pays off loan. Says theirs a differing of ideas about who is actually on staff...thus cutting out anyone that actually contributed, but they don't consider as important as others...like an intern or something. Then give out layoffs to make sure they don't have to fulfill all of them. AND promote a new game coming out?!? Who is making THAT game? The same staff...or those still left...or a separate staff, who are now wondering if it's even worth it because they might not even get paid? Who knew that everyone just needs to get a Manager as a standard employee to negotiate contracts, enforce contracts...and get half up front pay and all that like an actor.

cr8ive
cr8ive

Let's see, I'm on my 3rd playthru in Skyrim... I finished the Witcher 2 twice...

KoA ... oh right... I'm like 3/4 in the game, and just stopped playing completely...

AntiH3ro97
AntiH3ro97

I definitely don't have high hopes for this MMO

SpikeJones767
SpikeJones767

  I think 38 studios should've focused on popularizing and expanding the "Kingdoms of Amalur" brand, and if it becomes a successful money maker then put back some of the profits for paying off the loan so the tax payers of Rhode Island aren't  left paying the bill, then put money in the bank to pay your employees... Then put whatevers left down the money sucking black hole known as a MMO.

 

 I just can't see how such a small developer could think its a great idea to produce only one game (That wasn't a huge block buster as far as sales are concerned) and then spend every dime they have on creating a MMO... "Kurt- Okay everyone keep dumping wheel barrows full of tax payers dollars down the MMO money hole until we run out, then we'll just lay off everyone! 38 studios- YAY! Thats brilliant!"

TrueGB
TrueGB

If I had enough money to hire lots of great talent, I'd start small and do projects I can actually afford and work my way up. It may take longer, but the talent will shine through and win out in the long run. On the bright side, if Schilling blows all of his money he can still get a job in baseball.

skemaal
skemaal

They should of came in Canada. Either Vancouver, Edmonton or Montreal where the big boys play. Seriously, the "incentive" from Rhode Island was crap to start off with. Real incentives are tax breaks, incentives to hire staff, special investments funds dedicated for developing business in your region. This is something that the US fails to understand or do but does not apply it properly. I mean...we'll give you a "loan"...well other parties other than a state could of done that.

 

But that's half the problem here. N0tYrBeezin nailed it...as a new studio why would you run a few projects at the same time when you are still green? An MMO is a huge investment. I think that it's one of the problems because as far as I know KoA did decent in sales and is still doing well.

 

In the end, something happened somewhere which could simply be bad money management....which wouldn't be surprising either.

 

N0tYrBeezin
N0tYrBeezin

I am not sure if it was wise for them to spread themselves thin by making both KoA and the MMO. Shouldn't they have concentrated all efforts of making a hit first before  going for an MMO? They have not established a fanbase and they want to do an MMO? That is like diving head first down a cliff.

waltzink
waltzink

 @mike468 problem is that the taxpayers may likely have to foot the bill for this. not good. that state is already going through a lot of bad stuff. salt on the wound. personally, i wish people here in the states would take a note from the people in iceland - jailtime. it won't happen, but this whole mess smelled bad from the beginning.

Talavaj
Talavaj

 @wwlettsome why ? MMOs, especially the free to play ones are likely to be the most profitable sector in gaming industry

Joshuatree25m
Joshuatree25m

 @wwlettsome well they started on the MMO almost 6 yrs ago, and it just happened that Reckoning came out first. This was supposed to come out in Sept, but it's pushed back.

vaejas
vaejas

 @dre256x Less about gamers, more about taxpayers.Which most gamers over 18 are.

Ringx55
Ringx55

 @HipHopBeats Plans haven't changed apparently but it might be longer than we hoped :(

waltzink
waltzink

 @AyatollaofRnR agreed. rhode island is an absolute mess, right now. i believe they have the second or third highest unemployment rate in the country. if the loan goes bad, it's just pouring salt on the wounds.

waltzink
waltzink

 @Ringx55 as of now. if the loan craps out, taxpayers are on the hook. that's how the loan was set up. so essentially? private investors (corporations)? don't lose anything. schilling and 38 studios? lose some money, but likely could use the financial courts to avert paying/losing much. who loses? the taxpayers.

nervedamaged
nervedamaged

 @waltzink Plus now they are laying people off!!!  So much for tea party Job Creators.

Ringx55
Ringx55

 @waltzink Actually RI tay payers have not given them a damn dime. RI had specifically went out of their way to lure 38 into the state with their generous offer for 75mil in a private investors loan.

rhmercer
rhmercer

 @mrboone01 Thanks for the heads up.   My error but in extenuation I must say that all monkeys look alike to me even if they are wearing a suit.

Ringx55
Ringx55

 @waltzink I understand that I have read every single article on their local news website. I know what I'm talking about but we're not discussing ifs now are we? What IF they get some private investments? What IF they release it early and it sells well? What IF those tax credits keep them afloat until release?

Ringx55
Ringx55

 @waltzink And where did I say anything about what if they cannot pay back the loan? I simply said RI has not invested anything into 38S and that's a fact. We're not talking about "Ifs and buts" we're talking about now.

waltzink
waltzink

 @Ringx55 taxpayers are the ones that would be on the hook. so while it's technically private investors, it's only so in a pseudo-sense. taxpayers are looking at the potential of having to eat over 110$ million. worst case, but if i lived about 60 miles south of where i am? i'd be absolutely pissed.

Ringx55
Ringx55

 @waltzink From what I understand he had already secured investments from other sources before the RI deal. The fact of the matter is that RI had generously offered him this loan why wouldn't he take it?! And well we'll find out if that's true evantually but the fact of the matter is that the Governor is not doing a goodjob and is just doing more harm than good. 

waltzink
waltzink

 @Ringx55 most people, if they start a business, can get their own private investors. the fact that schilling couldn't and used this method to get the investment money is telling. that said, i SERIOUSLY doubt some random private investor is now going to come in and save the day. that's awful financial strategy, and no one will want to have anything to do with the mess he's created.

Ringx55
Ringx55

 @waltzink Schilling had simply re-paid himself the 3.8mil line of credit he had created for the loan if I'm not mistaken. He won't be, the EDC has all the info from the company that is not public and in their meeting yesterday nothing has changed.And well the governor has no right to announce the release of their title and it might do more harm than good.

waltzink
waltzink

 @Ringx55 considering the run of events, do you really think they're going to come out of this clean? 38 studios is in some serious trouble, and with rumors about schilling paying himself back with some of that money, it'll also be interesting to see if he's investigated over his financials. the man is trying to save face and when the governor - not your company head - is announcing your next game has a green light, that's worrisome.