Reckoning staff unpaid since May 1, health care runs out - Report

Source says 38 Studios employees miss payroll this month, now without health care; company CEO and SVP jump ship; Kingdoms of Amalur outperforms projections, selling 1.2 million.

The tough times at Kingdoms of Amalur and Project Copernicus developer 38 Studios are not getting any better, according to a new report. A source with knowledge of the situation told Joystiq that 38 Studios staffers have not been paid since May 1 and, as of today, no longer have health care. Company employees are paid on the first and 15th of each month.

Copernicus may never see the light of day, says the source.

Asked if 38 Studios will shut down this week amid the trouble, the source would not confirm anything, saying, "Unknown at this time. Outlook is not good."

As for 38 Studios' new massively multiplayer online game Project Copernicus, which Rhode Island governor Lincoln Chafee recently revealed would ship in June 2013, the source confirmed this date was an internal target, but was not sure it will be met.

"Whether this is realistic or not is up for debate," the source said.

The trouble for 38 Studios does not end there. Rhode Island news outlet WPRI reports that the company's CEO, Jen MacLean, and senior vice president of product development, John Blakely, have left the company. MacLean has been on maternity leave for the past two months and indicated via her LinkedIn page that she left the company in March. Blakely also updated his LinkedIn page to say he left 38 Studios. Prior to joining the company, Blakely held positions at Zynga and Sony Online Entertainment.

It's not all bad news for 38 Studios. Company founder Curt Schilling wrote on Twitter last evening that Kingdoms of Amalur: Reckoning had outperformed publisher Electronic Arts' projections, selling 1.2 million copies during its first 90 days. He did not clarify if the figure represented sold-in (that is, shipped) or sold-through to consumers. As of press time, neither Schilling nor EA had responded to GameSpot's request for comment.

Asked by a user if he would use the money earned from Kingdoms of Amalur: Reckoning sales to help 38 Studios amid its ongoing troubles, Schilling said the funds have yet to come through.

"Haven't received a penny of it, and have not asked for any," he said.

Kingdoms of Amalur: Reckoning shipped in February to a warm critical reception and sold 330,000 units in the United States alone during the month.

38 Studios' troubles first came to light earlier this month, when reports from the Rhode Island government indicated 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.

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eddienoteddy

Eddie Makuch

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.
Copernicus (working title)

Copernicus (working title)

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145 comments
Rox-pox
Rox-pox

The second I don't get paid, I'll look for another job.

AceBalls
AceBalls

The worst part is this.... They will get away with it unless someone forces an inquiry.

gmromero
gmromero

So let me get this straight... KOA is out selling their predictions and yet they are still laying people off and withholding pay from current workers? And the 2 ringleaders bailed? Another disgusting example of the people on top running off with all the money while the people who actually work end up jobless and without even access to healthcare. 

AlmityGuitarist
AlmityGuitarist

My friend worked at 38. He said when they didn't get paid the management was really shady about it and didn't really give them any info until they laid everyone off. But he kind of knew it was possible once amalur didn't make the company a profit. 

Institute
Institute

This is what happens when people become greedy.

megakick
megakick

Zomg this is such a big thing Start a FUND GameSpot.

For the price of a cup of coffee you can help feed 38 Studios.

nyran125
nyran125

man these companies with successful games make SO much friggin money, whats wrong with these friggin businessman man, seriously. its a joke.

 

I think there needs to be a new legislation..managers and employers shouldnt get paid until the friggin workers do...its pathetic OR they shouldnt be producing a game they cant afford in the first place. Either or, theyve RIPPED off the people that have worked on the game and should go to prison for it.

EnchantedDaisy
EnchantedDaisy

This is really horrible. It's sad how what I assume is a mismanagement of money will hurt so many who did such a good job.

Andrew1073
Andrew1073

My cousin works for Big Huge Games and I feel horrible for him.  I am wishing him well and hope he can find work elsewhere...

Sturmfuehrer_
Sturmfuehrer_

Tragic management issue.

That's what happens if you think that, because you were good at baseball (and played a bit of WOW...), you're good at everything, namely creating a game!

But he will probably have made his cut with a nice yearly salary plus bonuses, while his 400-or-so ex-employees and the state of Rhode Island are bum-f'*ed.

lowkey254
lowkey254

If they didn't start work on their mmo this wouldn't be an ossue.

servb0ts
servb0ts

Hahaha. Developers of EA got so greedy, now they get screwed for screwing over paying consumers. Can we say Karma.

FinalDuo1886
FinalDuo1886

I will always love video games, but I'll never, EVER, ever, ever. ever, want to be a gaming dev, because of all these hideous stories that happens too these gaming devs. You get more respect working fast-food than working tough shifts working on a video game, that you don't know when, or where you'll get pay, which is just ridiculous!

 

 

ggregd
ggregd

It's starting to sound like Mr. Schilling was so ideologically blinded in his politics that he refused/neglected to let his company renegotiate their loan/finances with the State of RI, even though their MMO was taking longer than expected and the company was in danger.  I doubt the state wanted the company to fail and to lose 350 jobs and any chance that they would be paid back.  They could have worked something out.

 

Maybe everyone will be hired back on if they get any KoA money.  The MMO always sounded promising since I first heard about it 6 years ago.

dre256x
dre256x

Will Ea or Activision please buys these guys out, or even Ubisoft, they can't be that expensive..

s_h_a_d_o
s_h_a_d_o

Something is rotten in the State of Rhode Island.

DeViLzzz
DeViLzzz

money, commerce, etc once again destroy creativity ....

Roger_Smith
Roger_Smith

This is why EA is ranked the worst company. When a game outperforms expectations and you still can't profit from it, something is very wrong. How can you not receive any payment or money from the supposed 1.3 million units shipped?

 

Not even the dead can know peace in this place.

jinzo9988
jinzo9988

This is what happens when people beg for new IPs rather than sequels and then don't support new IPs when they come out... granted there are other factors at play here.  I don't think they should've gone big budget right out of the starting gate, and I don't think they should've made so many wasteful decisions like hiring Todd McFarlane and R. A. Salvatore.  That's something a company like Rockstar Games would be in a position to do, not a start-up.

Gen007
Gen007

yeah i totally would not be going a month without pay and their next project is an MMO? For realz who's smoking that crak pipe i have to know because it must be amazing stuff. Their next project should def have been a follow up to KOA. Much larger companies have tried and failed at MMO and they though they'd just take a shot at it eh? If their current situation dosen't break them then the flopping of that MMO will and its highly likely. If i still worked their i would be trying to find new employment asap. Also KOA isnt the problem here folks it actually sold decent and will probably have good lifetime sales. I just doubt it will help them much. The real problem is awful decision making coming from the top.

aestevenson
aestevenson

Curt Schilling was an avid EQ and WoW player so of course he was qualified to run a video game company.  Shocking that it didn't work out really.

 

The bigger question is why such a hard core tea-partier was ok with taking huge government handouts in RI.

aestevenson
aestevenson

According to a reporter in RI, Kindoms of Amalur was largely purchased from another studio, so not sure if they can make much money from it.

toddx77
toddx77

Wow this sounds like LA Noire all over again.  Sad to see new IP's and their studios go through this.  I don't know if it matters now but I will for sure be buying this game during the steam sale this summer.

Jaga_Telesin
Jaga_Telesin

Like I mentioned in a comment elsewhere about 38 Studios - stick a fork in them, they're done.  Probably a good thing with regards to the MMO, since we really do not need another one. 

 

As a side comment - the gaming community is getting wise to companies that rush DLC out the door right after a game ships.  And when you don't provide significant support via patches, they take that almost personally like you don't care about their experience.

 

Sad to see the world of Amalur go, but someone may pick up the IP for pennies on the dollar and run with it.

SythisTaru
SythisTaru

KoA is a great game, especially when it comes to lore/dialogue. I've played Skyrim extensively (340 hours or so on my save, and 600+ on the creation kit) and I love it, but the more I play Kingdoms of Amular, the more I realized just how bland the quests and writing in Skyrim really were. People should give this game more of a chance.

Ringx55
Ringx55

Please keep in mind everyone this is more about the MMO that's been in development for over 6 years now (1 likely being planning) and less about Reckoning which outperformed EA's expectations at 1.12mil in the first 90 days.

Sepewrath
Sepewrath

Seems the mistake made here, was being too ambitious right from the start, with an unproven studio in a crowded released schedule.

pelvist
pelvist

Should have stuck to making games for PC instead of wasting all their money ( or someone elses money ) on marketing the game to console gamers. Especially since said gamers where all too busy playing that extremely overhyped game by Bethesda. When will these developers learn? How many must we loose to gready publishers and exspensive costs of console marketing?

Bozanimal
Bozanimal

To clear up some confusion:

 

Curt Schilling - an avid Everquest and MMO player - started 38 Studios (known at the time as Green Monster Games) back in 2006 with the sole purpose of creating an MMORPG. Amalur was the product of Big Huge Games, who they acquired in 2009. Copernicus is the culmination of six years of development, or what will be seven if it hits its release date.

 

For full background you can read my summary here: http://www.gamespot.com/users/Bozanimal/show_blog_entry.php?topic_id=m-100-25984555

 

You can also follow Rhode Island reporter Ted Nesi on Twitter @tednesi , who has been the primary source of information on this developing story.

brh2010
brh2010

This is the inherent problem with games like this: nobody really buys them or wants to play them (with the exception of maybe Elder Scrolls and Zelda). The market is so small that it's almost not worth the money to develop. I'm not saying that these games shouldn't be made, but at least have realistic expectations for sales. 

 

Let's face it: the majority of video game players play either shooters, sports games, or family friendly mini games (a la Wii). That's just the way things are. If you're going to dump money into an RPG at least realize that you'll only be appealing to a small segment of the market and spend the money accordingly. And don't act surprised when your game doesn't have blockbuster sales.

Triton
Triton

Wow, and I thought I had it bad at work from the last 4 years. I wish them well.

sortajan
sortajan

I'll bet they blame it either on piracy or second-hand games.

MJ12-Conspiracy
MJ12-Conspiracy

I think what happened was they wanted to do something grand like Elder Scrolls or Baldur's Gate, Neverwinter Nights.....an epic RPG with an Epic story......

The problem is when Baldur's Gate was made it wasn't like now how everything is high res, BG was simple it didn't have high res textures and the detail on characters weren't that detailed but the focus was on story.....

With Elder Scrolls they had the same thing in the first game, it looked like crap compared to modern games but it had all of the provinces of the Empire and the story was epic [or so I've heard] the point here is it took awhile for Bethesda to get to the level of Morrowind, Oblivion and Skyrim.....

I'm not really sure where it all fell apart though.....

they had a legendary author of very successful books yet the story was forgettable...

they had an artist working on the monsters who is legendary for creating characters....memorable characters yet monsters and characters mostly looked ordinary.... then you add the man who made Morrowind and Oblivion what they were...

It diodn't even feel like the different parts were trying to compete with one another, everything was just forgettable....So yeah I think they looked at all the major legends of RPG makers and thought I wanna be that but fell very short.....

 

Given all the bad news I don't see them lasting much longer....

xMoonDevilx
xMoonDevilx

If they haven't gotten the funds from the 1.2 million yet for Amular...which about $72 mill....then where did they get the money for the $1.125 mill loan payment?

Ringx55
Ringx55

Rumors and more rumors. They have missed payroll for the 15th of May it still unknown if people have been paid yet or not. It's entirely possible by now they found some funds to pay them.Until a statement from 38S themselves I'd hold off. 

Darkeus
Darkeus

And the game sold above expectations.  What happened here?

svaubel
svaubel

Something smells fishy here. Methinks CEO and SVP helped themselves to a bit of money, then jumped ship to try to avoid suspicion.

rasputin177
rasputin177

I never liked Curt Schilling. He refused to to a trade to cleveland even when it meant a trip to the playoffs. He also constantly lets his views on political matters be heard in new england. Always bashing the poor and less fortunate of this country for taking hand outs. Welll, Curt your game was decent (although flawed in many ways) but it was better then this. I guess this is what you get for being a macho conservative dick always so opinionated when it comes to the problems of other people. Enjoy you hypocrit.

 

 

Does anyone remember listening to him when he did the talk show circuit? Get rid of him and find a new backing for the MMO. The team is not without talent.

terrascythe
terrascythe

More investors can't save this company if their not making money to begin with.  Plus they still owe the state of RI like $100 million.  Kingdoms of Amalur outperformed projections--great news....  but it means little if they can't pay their employees.

XanderZane
XanderZane

Hope they are able to get their MMO out. Seems unlikely now, as no publisher will touch it. Looks like they need a new investor. Microsoft, are you listening? MMO? Exclusive sequel. Hello? lol!!

TruthTellers
TruthTellers

38 studios should have started small and worked their way up. Now, they're just about done.

jking142
jking142

Starting a new business is hard, even when you know what you are doing.  Cash flow is the number one challenge for most.  I have seen very smart people drink the kool-aid instead of planning for shortfalls.

 

...I have never heard of a CEO going on maternity leave.

aamir69
aamir69

Really? I didn't knew that Reckoning company head was an arab cause that's definitely an arab trait

Squirrelatwar
Squirrelatwar

Sold better than expected and failing to pay employees? Sounds like terrible administration to me.

Sgthombre
Sgthombre

I feel like there is more here than meets the eye. There's no way you can over perform but be in this deep financial shit. Perhaps somebody in accounting got a little greedy or something else of questionable legality. 

Michael83917
Michael83917

Hmm. They sold better than expected. Why are they having money troubles?

Well first of all the money doesn't go to the studio directly, it goes to the publisher, then to the studio. So this leaves us with two possibilities - EA is screwing them over and not paying them, or EA paid them but their costs were higher than the income.

walders
walders

I applaud Schilling for his effort, but he was in way over his head. IMO He tried to make a Big Budget game without knowing all of the ins and outs of the industry or running a business. If you outperform projections you should be able to pay your employees. Not doing that is a sign that Schilling is a thief or incompetent. He should have started smaller like Runic Games did with Torchlight, and then build off of that.