Reckoning dev lays off entire staff - Report

[UPDATE]: Source says beleaguered 38 Studios and Big Huge Games sent out pink slips to all employees, believed to number close to 400. Rhode Island governor calls Kingdoms of Amalur a "failure."

It appears 38 Studios and its subsidiary Big Huge Games are no more. The Verge and Joystiq heard from sources today that all employees at Curt Schilling's Providence, Rhode Island-based and Maryland-based development studios have been let go. The company put out just one game in its lifetime, February's well-received role-playing game Kingdoms of Amalur: Reckoning.

All 38 Studios staffers are out of work, according to the report.

38 Studios employed 379 employees full-time as of mid-March, according to a report from last week. Employees at the company had not been paid since May 1 and lost health care benefits today, according to Joystiq. As of press time, 38 Studios had not responded to GameSpot's request for comment on the matter.

Troubles at 38 Studios first came to light earlier this month, when reports from the Rhode Island government indicated that the company had failed to make a $1.125 million loan payment to the state's Economic Development Corporation. The studio eventually made the payment, but it also enacted a round of unspecified layoffs. The company's CEO, Jen MacLean, left the studio in March, with senior vice president of product development John Blakely heading out just this month.

The fate of 38 Studios' massively multiplayer online role-playing game Project Copernicus is unknown. Rhode Island governor Lincoln Chafee recently revealed the title was being readied to ship in June 2013. If 38 Studios decides to sell its Amalur intellectual property, it can expect to get $20 million for it, according to one industry analyst.

38 Studios purchased Big Huge Games from THQ in 2009. It is unclear what will happen to the Kingdoms of Amalur: Reckoning sequel that Schilling confirmed was in the works earlier this year. The original sold 1.2 million copies during its first 90 days, outperforming publisher Electronic Arts' estimates, according to Schilling.

[UPDATE]: In a press conference this afternoon, Governor Chafee explained that the state had not been informed of the pending layoff of 38 Studios' entire staff. In explaining how the studio hit the skids seemingly overnight, Chafee explained, "The game failed. The game failed." He added that Kingdoms of Amalur: Reckoning would have needed to sell 3 million copies just to break even.

Additionally, Rhode Island's WPRI has a copy of the mass layoff email that was sent to 38 Studios employees. It reads:

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.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.

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Discussion

394 comments
gtadude26
gtadude26

i thought kingdom of amalur was a good game it was big, it was long and it's combat system was better than  skyrim

 

Astarsis
Astarsis

I don't get it, 3 million copies would be 1000 peoples for one year with salaries at 100K$ - I doubt they paid that much. I got an impression someone left with a big stack of money in their pockets, just because they could. I hope the matter will be investigated.

strayfies
strayfies

They overcooked a turkey, then fired the kitchenware.  I sincerely hope the governor, taxpayers and now out-of-work staffers can find some kind of justice from these toxic decisions. 

jakesnakeel
jakesnakeel

Such a talented team.  This is a board room failure.

2x4b96123
2x4b96123

putting all the resources into the The Kingdoms of Amalur MMO was a fail. Who the hell made the decision that they'd roll it all out instead of just putting out the small rpg first to see how it went without putting all the eggs in the MMO basket!? 

soulless4now
soulless4now

Shame that all of them are out of a job. :(

Takeno456
Takeno456

Regardless if one liked the game or not it is still sad to see a new company who took a chance on a brand new IP fail. With all of the 3s 4s 5s and 6s we see tacked onto our games and all of the remakes coming out it really is sad to see new talent die. Also when did getting 1.3 million copies become a failure? Man money really has skewed how we view success now. Anyway good luck to all the 38 studio workers.

Shantmaster_K
Shantmaster_K

I havn't played this game, but I want too. It looks good. Sad day for 38 Studios. Hopefully they can find a way to come back.

vadagar1
vadagar1

btw I think the "politicians" and the big bosses got off rich and fat, as usual, hope they save up that 30 silver because they sure gonna need it soon.

 

and yah sure the governor was "shocked" *rolls eyes*

vadagar1
vadagar1

hmm maybe they should have started small .....

 

I mean I don't know...

 

at least they have their life and that's whats important, everything will be alright in the end.

ClaudiusCaesar
ClaudiusCaesar

This developers are losing their jobs and right now some people are buying this game used.

cowkiller321
cowkiller321

Didn't like the game at all. It looked to me like some offline mediocre MMO. Sad story though :/

4quarters
4quarters

3 million copies to break even....crazy numbers.

 

The next gen of systems is doomed as costs rise...

 

379 employees for a new company first game....crazy

Letho3334
Letho3334

Time to move from Rhode island.

xMoonDevilx
xMoonDevilx

Game wasn't for me...talented workers though, definitely give them that for first out of the gates game release. Hate they have to suffer from it. I think they will get absorbed into other companies though...hopefully..as their work can and should be considered high value and development.

rasputin177
rasputin177

If they would have made a patch to fix the game before rushing out new DLC I might still be playing the game along with others. So much went wrong here its a shame because the people who actually made the game are the ones who did things right and they got screwed by the higher ups. Schilling is such a bitch. The sad thing is other then maybe a hurt ego he escapes unscathed.

Buzduganjr
Buzduganjr

Holly molly! this is sad very sad for the game developers...now who's gonna update the bug and fixes we reported??

Oh man i really enjoyed the game :) and is sad to see this news.

rasputin177
rasputin177

The game did not fail. You failed gov Chafee you failed and so did Schilling.

nyran125
nyran125

what a joke...

 

lesson, dont make something you cant afford and if you do..pay the friggin workers and if you cant, go to prison.

 

I think workers of the game industry should call for a new way of paying them. half up front and half when its over. A game developer makes what $45'000-$80'000 a year or something? its not as much as you think. They needed to come up with around 18 million to pay 300 workers, $60 x 1.2 million copies sold is $72million , they SHOULD of been paid. This is grose.

rarson
rarson

This sucks, but it's a great example of why the government should have no business investing other people's money into things that they have no clue about.

dmdavenport
dmdavenport

Why couldn't the terms of the loan be re-worked to save the company?  I'm sure the citizens of Maine would've  preferred that to more people on unemployment. 

rcarp711
rcarp711

KoA:R was far more arcadey than I had hoped, so I was quite disappointed.  Just wasn't my cup of tea.  Still, how do you sell 1.2-million copies of your first game in the first 90-days and go belly up?  You hire talent like Salvatore and McFarlane and spit out a simplistic, button-mashing, half-hearted facsimile of an RPG, I guess.

 

jbahari
jbahari

Unfortunate. Hopefully the folks laid off can bounce back and find work quickly and sure they will. What this means for the world of Amalur, it seems no ones for certain. It is really scary how the game studios are here one minute and gone the next. Harsh business.

FreedomPrime
FreedomPrime

wow, what a shame. that was such a good game and you can tell that studio had something special on their hands.

JimmeyBurrows
JimmeyBurrows

Once again I'd say that relocation loan killed them off... Why the hell did they take it and where did the money go... If they'd stayed where they were and made the game they'd probably still be in business.

Must be some really shitty people in high up places, all staff layed off and no one payed so they could pay off a tiny part of the loan... Lame.

Best of luck to everyone who lost their jobs.

TriumphantToad
TriumphantToad

I feel like they'd just make more money if the games weren't $60.  I mean...if it was $30 or even $40, I (and I'm sure many others) would probably never buy a used game again.  100 x $40 > 50 x $60...

CTR360
CTR360

amalur its good game

TriumphantToad
TriumphantToad

I don't get it...the game didn't do amazing, but I thought it did relatively well...tons of games do way worse and their companies stay in business...

Grbonjic
Grbonjic

Too bad ... Not that I'm a fan, but it's a sad thing that a good game like that gets such a bad rep. 

Ford_Cruller
Ford_Cruller

That's unfortunate news - my thoughts go out to the former employees. I thought the game was pretty fun, just tough timing with so many people experiencing rpg fatigue after Skyrim.

On a side note, it's sad to see a new IP manage to sell over a million copies and still not be profitable. Sounds a bit like mismanagement.

topsemag55
topsemag55

If 38 Studios had just patched the level cap, I would have purchased the latest DLC. As it is, you reach the level cap before the game finishes. Becomes pointless to play a RPG when the XPs stop.

WillyChong
WillyChong

 @gtadude26 I admit that the system was better and less clunky, but now no more Kingdom of Amalur, EA really love to fuck around even though the game was good, perhaps they are jealos of Bethesda Studio and when KOA is not making money like Skyrim, they shoved in what's remain of the game revenue and kick out their staff to starve. T-T

Astarsis
Astarsis

 @4quarters

 costs don't really rise, in fact they decrease. It gets easier to make that stuff. Just look at japanese free software .... if a guy in his spare time pill off something like miku miku dance ... I get suspicious when companies arround here need 3 million copies sold to break even ... sounds fishy... could be money laundering, or could be they just decided they were not getting the 1000% payof they expected, so they sank the ship and left with all the money. the usual golden parachute cheat

JoshX042
JoshX042

The game wasn't my cup of tea, but it was far from bad. Regardless, I don't like to see massive layoffs like this, no matter who it is.

Astarsis
Astarsis

 @nyran125

 indeed. I try to do the maths as genrous as I could. they put the money in their pockets and decidend to steal the extra 18 M from the workers because they could.

taisui
taisui

 @nyran125 So out of the $60, $15 probably goes to the console maker, likely another $15 for the retailer, $5 for the cost, $10 for the PR, leaving probably $10 to $15 to the studio, so no, it's not going to break even.

rcarp711
rcarp711

 @rarson It's the Economic Development Corporation of RI.  That's what they do.  Besides, 1.2-million sales in the first 90 days would be a rousing success for just about any other game development company.

rasputin177
rasputin177

 @dmdavenport

 Exactly. I am from Maine and the unemployment is rampant. Hell, I would quit my job to work for them. I am a writer and I am positive I could do better then the half assed story found in Amalur.

 

alcalde
alcalde

 @rcarp711 No, you do it by spending far more than you could ever expect to recoup in sales. This is a fault of management allowing massive cost overruns, as explained in the article where it was said they would have had to sell 3 million copies just to break even.

WillyChong
WillyChong

 @Astarsis EA don't want 3 million copies, they want 30 million copies in order to break Skyrim record, and Activision 4billion?!? record, the only reason EA still not fuck around with DICE  and Crytek is that DICE owned the FROSTBITE ENGINE and nearly every EA recent game based on that engine, and Crytek still hold the CryEngine. If EA get hold on both engine, they practically can and will dissolved both company. 

Astarsis
Astarsis

 @taisui

 tatsui, it has not worked the way you describe in a long time. there is a lot of pressure due to the easyness of selling online. some indies devs manage to get millionaires just from online sales.

 

the cost is arround 1$ all included. dvds are ridiculously cheap. so it's really just the box and manual - if there is one - skyrim was a simple dvd case with almost nothing but the dvd - must have costed 50 cents

 

what are you callking pr ? publicity ? you don't factor it as per item, and it gets dwarfed by the other costs.

 

the only real cost is really shipping (distributor) and retail point - who used to take a big chunk and leave 25%, but these days I'm certain they leave over 50% otherwise peoples would stick with amazon.com and let the retaillers sink

 

no matter how you look at it, slicing 72 by 4 is still 18 million and that's based on a ridiculous staff of 300+ that also sounds odd as a number for a single game. I mean what do they do !!! too many doesn't work faster. they just step on each other feet.

UniversalCypher
UniversalCypher

 @taisui exactly. this studio had way more debts to pay than just the employees. its a sad story.

taisui
taisui

 @Astarsis it has been almost a decade since I last worked on video games, so perhaps things has changed for the better.  From what I gather, 38/BHG burns about 4M / month to keep running, given your 18M I just don't see how it's sustainable.  Too bad for the tax payers at RI, but at least ex-BHG guys can join Epic now.