SEC launches investigation into Rhode Island's 38 Studios deal

United States Securities & Exchange Commission to investigate controversial 2010 $75 million taxpayer-backed loan for Curt Schilling's since-failed game company.

A new chapter has been opened in the ongoing case involving defunct Kingdoms of Amalur: Reckoning developer 38 Studios.

Image credit: Steven Senne, AP

WPRI reports that the United States Securities & Exchange Commission is investigating the controversial $75 million taxpayer-backed loan from the Rhode Island Economic Development Corporation that brought 38 Studios to the Ocean State in 2010.

It is not clear what specifically the SEC is investigating with regard to the deal. Neither the SEC nor the EDC would provide specifics on the investigation.

An EDC representative told WPRI that the group had retained lawyers to handle the investigation and that it "doesn't discuss ongoing matters related to 38 Studios and maintains a level of confidentiality as requested by the SEC."

Rhode Island is suing Schilling and other former 38 Studios executives over the failed company. This lawsuit is ongoing.

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Eddie Makuch

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.
Kingdoms of Amalur: Reckoning

Kingdoms of Amalur: Reckoning

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62 comments
Supabul
Supabul

reason this happened nobody bought the game

BarkingSpider81
BarkingSpider81

Just make us another Kingdoms of Amalur game dammit!!!!!!

smokeless_0225
smokeless_0225

Hey EA, do you wanna bring back some of your long forgotten fans after so many failed games? Why don't you resurrect this IP and make a sequel? lol

jsmoke03
jsmoke03

why are they suing studio 38? really i dont get it.

ux1077
ux1077

They need to use a new picture, sites been using the same picture for every single article, every time I look at it, I keep thinking: OMG, that guy is having a heart attack!!!

BioWpn
BioWpn

Even though the the game had heaps of bugs on release, it was still a pretty good game and loved the whole action rpg sense of it. Its just shame that we might never see anything from this I.P again

mcfez
mcfez

@BioWpn Completely agree. I loved the game for its creativity in combat and variety in zones. Would have loved to see a more polished sequel. The MMO they were developing at the same time crushed them financially and is the cause for the bankruptcy. 

Vodoo
Vodoo

Maybe they heard the word "Schilling" and thought of gold. But when they realized it was a Boston Red Sox player they knew they were gonna get the shaft. 

PS- I'm obviously a NY'er

highlanderjimd
highlanderjimd

such a shame, the game was very good indeed. MUCH better than skyrim which launched around the same time.

valium88
valium88

@highlanderjimd  

That's a matter of preference, I found KOA quite boring with a stereotypical WOW art-style. That's just me though.

smokeless_0225
smokeless_0225

@valium88 @highlanderjimd Well the art style might not be better than Skyrim, but the story that went along with the game-play mechanics was like ten-times better imo.

bouff
bouff

does anyone know if another studio has bought Kingdoms of Amalur yet? would love to see a sequel at some point

CROAT_56
CROAT_56

@bouff Well EA published it so maybe they might buy the IP but there is no news on the matter last I heard it was going to be auctioned.

sargentpsgamer
sargentpsgamer

They should take all the money out of Schilling's pocket......

aoemickey
aoemickey

That guy looks like Curt Schilling

Llama345
Llama345

I will never understand how the state can act like a bank; furthermore, I don't know why these guys allowed EA to take so much from them.  They needed to sell 3 million to break even. 3 MILLION! For a first time studio that is just plain stupid. Only a handful of games have ever sold that many games.  

---Cipher---
---Cipher---

Whats to investigate?

State officials handed a huge bag of money that wasn't their's based on an ill conceived pipedream. Said I'll conceived pipedream was mismanaged and overextended it's own resources trying to produce a AAA game. State officials burned any chance of fixing the problems and turning it around to the ground. State continue to burn money in an effort to regain some of the money it through away. State refuses to see that even if they got 100% of the money they can get out of it, they'll never recoup their losses since 100% of 0 is still 0...

That about sum it up? Bad decisions made by people who had no experience in that market...

decoy1978
decoy1978

@---Cipher--- Exactly sums it up... the company was mismanaged, funds were mismanaged. The fact that it was state backed and not say... Bank of America, Chase, or big banking institutions should have raised a few eyebrows.

Whoever was in the state that agreed to this loan should be fired along with their supervisors. None of this gets passed unless multiple people agree on it.

Its a bad investment and someone should have done their homework on 38 Studios more. When you think about it... an ex baseball player wanting to start his own video game studio....kinda farfetched to be signing off on a loan...

I have no experience in building a car, would RI lend me money to startup one....

Gladestone1
Gladestone1

The game isn't half bad in itself..Like it over skyrim well ok some things over skyrim.The combat in itself is kills elder scrolls games..Wish it made enough to do a sequal..The quests where kind of boring..My only gripe with it..Ra Salvatore story was stripped also..Story itself sucked kind of well mostly..

TheLeftHandDoom
TheLeftHandDoom

Hey, Rhode Island,  When David Ortiz asks for $75 million dollars to start a sports nutrition company, don't do it.  



krystyla
krystyla

These idiots went to the press and devastated any chance of finding an investor. 

Given 38 studios were way to unknown to start a self funded mmorpg and the release of amalur was just stupid shortly after Skyrim


its so sad because R.A. Salvatore wrote the lore and TES lore is crap compared to that

Stiler
Stiler

@bouff @krystyla @b74kd3th The MMO (project Corpernicus(sp) was being developed before Kingdom's of Amalur. 

Kingdoms of Amalur was being developed by Big Huge Games and then 38 studios bought them and had them take the game they were making and turn it into Kingdoms of Amalur. 

They did this all while they were also working ont he MMO which was started long before KOA shippd.

That was the biggest problem with 38 studios, making their first game an MMO and then deciding to also buy another studio and release a single player rpg. 

They should have just mad ea single player game first.

SKaREO
SKaREO

Rhode Island Economic Development Corporation funding game studios with $75 million worth of tax paying dollars? What the hell...? No wonder they are investigating. Something is very fishy here.

rarerichz
rarerichz

@SKaREO only thing fishy here is your government using your tax paying dollars to make weapons and go to war.

RedLegZeff
RedLegZeff

The really depressing thing about this story is they launched what could have been a successful series. If the company was given another couple years they might have turned things around big time. The company might be at fault, but sometimes there are better solutions then just suing them.

smoker1993
smoker1993

@RedLegZeff Well the legal systems of the western world seem to think that its better to spend millions upon millions on legal fees to gain nothing then to save  that money and gain nothing.

waterghost
waterghost

Poor Kurt, the guy clearly has passion for gaming, but he just doesn't know how to manage a business........

nigelholden
nigelholden

@waterghost To be fair, RI kind of freaked out without understanding how the industry worked and created a panic.

nigelholden
nigelholden

This has gotten ridiculous but somehow it makes me think that the 75+ hours I put into KoA is now worth a lot more money per.

nigelholden
nigelholden

@G4m3r0uTL4wZ After playing through the 3rd act of Neverwinter Nights 2, I can plow through anything.

CyhortI82
CyhortI82

And yet not a single investigation into all the taxpayer subsidies to "green" technology companies that never produced a single product and went belly up because the owners lined their pockets with the money? Yep. Glad to see our government is tackling the important issues like always.

CrimsonDepartur
CrimsonDepartur

I want KoA 2 so damn bad... It would be EPIC! Especially if they brought Salvatore and McFarlane back for it.. Wish they could incorporate Drizzt :D

Shadowsnake
Shadowsnake

@CrimsonDepartur That's not even the same world setting with Drizzt so kiss that notion goodbye along with seeing any sequel. The game itself was decent, not legendary by any means. Expect this IP to get lost before it gets found again. 

CrimsonDepartur
CrimsonDepartur

@Shadowsnake @CrimsonDepartur It actually made a pretty big impact and it's legendary in it's own way. I loved everything about the game and it sets itself apart from others. I know Drizzt isn't from the same world, like I said, I wish they could "incorporate" him into the game. Find a way to put him there. Hell Salvatore has even talked about wanting to make an IP all about Drizzt.

krystyla
krystyla

@CrimsonDepartur @Shadowsnake I do believe Wizards/Hasbro own Drizzt so it'd be theirs to decide. I am still wondering why Wizard isnt doing more with the Forgotten Realms imagine a game on the scales of Skyrim/Witcher 3 set in Faerun

Shadowsnake
Shadowsnake

@CrimsonDepartur  Well I'd sooner expect an IP all about Drizzt than to find him incorporated into an unlikely sequel. However if they were to actually make one I'd play it. Hell why not

gastankkiller
gastankkiller

I can't believe how stupid Rhode Island elected officials are. 

This is how the US/local government works now days. If I lived in Rhode Island. I would be asking for every recall known to man and I hate recall BS, but this is just to out there.