I'm curious if EA will get off their butts and offer support for KOA now. There are issues in the game that need fixed. After playing the game for 100hrs, and now on the Silence Falls glitch, I'm not starting the thing over again until the issue is fixed.
Kingdoms of Amalur developer met cold investor reception for Project Copernicus MMO in drying market.
38 Studios, the now-bankrupt company behind Kingdoms of Amalur: Reckoning and in-development massively multiplayer online game Project Copernicus, spent more than $133 million before it collapsed according to newly released documents. WPRI.com detailed the company's various expenses, which were paid for largely by state loans from Rhode Island and the personal fortune of founder and former Red Sox pitcher Curt Schilling.
38 Studios spent $118 million in the period between its founding in August 2006 and the end of 2011, before it began to take in any appreciable revenue from the release of Reckoning. When the role-playing game finally hit shelves it sold 1.3 million copies. For the company to make back its $28.7 million advance from Reckoning publisher Electronic Arts and begin to receive royalties, sales would have had to surpass 2 million.
"I don't think 2 million was an unreasonable estimate--I thought it would do 2 million to 3 million," said Wedbush Securities analyst Michael Pachter. "They may have been counting on an extra $30 million to $40 million of revenue from the game."
Less-than-anticipated revenue from Reckoning and drying investor interest left the company unable to cover massive expenses laid down for research and development on Project Copernicus--$104.5 million as of March. That figure did not surprise National Alliance Capital Markets analyst Michael Hickey, who said a typical high-end MMO game will take "north of $100 million" to bring to market. The studio's six years of work and a development team of 400 (some of its hiring was encouraged by state loan job creation stipulations) raised the stakes for the project's success.
But EA MMO game Star Wars: The Old Republic's colder-than-expected subscriber retention over the winter put a serious damper on the developer's efforts to attract investors to its own game. "I honestly think if 38 Studios had moved to get financing months earlier they would have been fine," Pachter said. "Had they been out in the market in December I think they would have been fine."
A Boston magazine feature on Schilling's role in 38 Studios' demise said the developer was courting Take-Two to publish a potential sequel to Reckoning in May, and in talks with Korean MMO game publisher Nexon. Nexon declined comment, and a Take-Two representative told Boston he wasn't aware of any negotiations.
Saul Kaplan, who was executive director of the Rhode Island Economic Development Corporation until 2008, said the new documents suggested at least another $60 million would have been needed to complete development on Copernicus. "I can't imagine a scenario where anyone was going to put that capital in," he said.
For all the good elements of KOA the game was overly long... 70+ hours is fine for a game like FF or Lost Odyssey, it's way less than you can easily put into Skyrim... but there wasn't the variety in KOA to warrant that long a game.
Oh, I'm sorry, they should have made it into an eight hour campaign like Mass Effect 3, complete with auto dialouge and choices that don't even matter. Ho hum.
@samantha_sneez Who lied, cheated, and stole?
The amount 38 Studios spent was within the expected range for both its size in terms of employees and the nature of the game they were developing, according to this and supporting articles.
They ran out of money.
100 million for research and development...........what in the bloody hell is there to research? player kill stuff, player get loot and experience..........done
Developers should drop this whole "AAA Game" thing, all they are doing is risking outrageous amounts of money, jobs, and resources making mediocre games with expensive graphics. Whatever happened to the days where developers started humble, and slowly climbed their way up to gamer's preferences?
@harold317 couldn't have said it better. I had more fun playing Bastion than I had playing The Reckoning
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There is no evidence of any wrongdoing in any way by Schilling.
The guy chased his dream and, when times got tough, he ate some humble pie and took a loan from Rhode Island to try and keep his business afloat and employees employed. It was not a government bailout- it was venture capital for a speculative business. Schilling sank everything he had into the company - everything - and there is ample evidence to back that up.
The only entity really at fault here is the RI EDC, which failed to conduct appropriate due diligence when they evaluated 38 Studios. That loan never should have been approved, and RI taxpayers are taking the hit on the default.
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A slush fund is a money specifically allocated to either illegal activity or entertainment. While The RI EDC spent their money like idiots, they did not do so maliciously or with illegal intent, or at least it would be very difficult to prove in a court of law. They were established to provide incentives for employers to come to RI, and that's what they did, they just didn't do it with diligence, failing the taxpayers.
Also, a criminal probe HAS been launched into 38 Studios, started back in June. You should really do your due diligence before throwing around wild accusations of a slush fund and a scam: There are a lot of honest, hard-working people that got swept up in the mess.
You might wonder why I put all this effort into responding, and it's not because I'm trying to be a jerk or troll you, it's because it's important that people really understand what happened and understand what caused all of the issues so that it can be prevented in the future.
Pointing fingers is not productive. The problem is with the management of the RI EDC, which needs to be restructured and include better oversight and accountability to make sure they are investing taxpayer money in job incentives that will benefit residents over the long term. This might mean police and fire, or it could mean tax incentives for companies headquartered in the state, or physical development of office buildings.
There's a lot of ways they could have spent that money more wisely.
If you read closely, you'll see that we're actually in agreement, I'm merely allocating the blame differently.
Consider, I have a friend that pisses away money and never pays back her debts. Now if I make a loan to her, who is at fault? Ultimately RI EDC is responsible for inappropriate lending practices.
If you have a problem with that money being allocated to the RI EDC instead of teachers and policement, then your problem should be with the RI EDC (literally the nature of its existence), not 38 Studios or Schilling.
@Bozanimal That is a truly sad, compelling article. :-(
A better question would be, "Why are you attacking him?" There is zero - ZERO - evidence he did anything other than try to keep his company afloat. He never took any money for personal gain: He lost his entire fortune trying to keep 38 Studios afloat, which is well-documented. He never "took" government money, he took a loan from the RI EDC, which invested taxpayer dollars in an effort to bring desperately needed jobs to RI.
In fact, the only people associated with this debacle that are at direct fault are the RI EDC employees that gave the loan to 38 Studios the green light. They should have done their homework.
So on one hand I agree with you: government has - in most cases - no business trying to be a venture capitalist. Saving a major company with strong prospects of recovery is one thing, investing in a speculative venture is another.
On the other hand you attack Schilling without giving any references of substance. Everything I've read from Day 1 of this sad, sad story points to him being a decent man, but a poor businessman without the experience or know-how to run a company- particularly a startup. It didn't help that the business plan was never sound from the get-go.
I think this is probably one of the better bits on Schilling. It doesn't talk much about the story behind the downfall of 38, but it does paint a picture of the man at the helm. You might find it an interesting read:
@Serpentes420 Man I know a lot of those people who lost their jobs from top to bottom and making dumb remarks on how they could have done better is stupid. There are many reasons why things didnt work out for that company and a lot of them you'll never know.
and @BlackSquare We in the industry have to fight to get money for funding, so when a state is willing to help we take anything we can get. It allows us to bring our art to the people and if wasn't for that kind of help you probably wouldn't play have the games you do. We need more help to make sure that we can continue to make content for you.
@AustinMaestre seems to me then that there is something wrong with the industry then, publishers are racking in the billions and you guys loose out, wish the devs could cut the c**p about piracy and 2nd hand sales and go after the real problem..........
greedy A** shareholders/publishers thats the main issue, there needs to be a serious revolution from the devs and from the gamers alike, its the publishers/shareholders and their greedy pockets that cause this and NOT gamers.
@chimpdaddy thats why i support indie game makers, when they have good concepts and deliverd pretty good, even if their game isnt "perfect" . new talent has to start somewhere
When doesn't EA take all its money its been hording off of paying customers with Online passes and Shady DLC practices, and payback what they owe. I feel no remorse for this company whatsoever.
What sort of morons create a brand new company and simultaneously develop two games? And to make it worse one of those games is an MMO an expensive game to produce in a waning genre and that's besides the fact the MMO. I still feel bad for the employees, but company management deserved to fail for being ambitious to the point of stupidity.
@Serpentes420 They didn't simultaneously develop two games. Green Monster Games - which later became 38 Studios - was founded in 2006 for the sole purpose of developing an MMO. They acquired Big Huge Games a few years later. Big Huge had almost completed Amalur at that point.
What is Rhode Island using taxpayer money for a gaming company? Have they not heard of the free market? No wonder it went bankrupt. Another Solyndra. Guess the "government did build that." LOL
Moreover you are going to stay in business in Rhode Island. The Carolinas, Florida, Utah, Colorado, Texas even the Dakotas are better. So Rhode Island taxes people out of the wazzoh to only go around and give the money to a gaming company who goes bankrupt. Yah good job. Would of been cheaper to rewrite your entire tax code and regulation system. Took literally two years to the day to fail. Bailouts = Fail.
""I don't think 2 million was an unreasonable estimate--I thought it would do 2 million to 3 million," said Wedbush Securities analyst Michael Pachter.""
And yet again, Pachter puts foot in mouth. Can he be any more of a tool? I know sh*t about sh*t, and even I know 2 million sales was a long shot for a new IP from an unproven company.
Thats why it failed, Pachter said it would do well. Anytime this happens place your $ on the opposite of his predictions.
I think the one thing we can all take from this article beyond anything else is...
Michael Pachter was wrong about something again.
The MMO market has definitely become stale. There's just so many of them out right now and it's no longer something fresh and novel. WoW may have enticed a lot of people with its success and longstanding income stream, but it's starting to dry up and I dont think the market is ever going to return to those golden days.
I followed the game pretty closely. Schilling had some big dreams, and damn near reached them. I loved the game, and really hope he can get a sequel going.
Party started big and loud...everyone got drunk....then police came in...everybody ran...only the house owner kept to apologize and clean all the mess...poor little Schilling...better stayed at baseball business.
Just wondering, what would those indie developers like Mojang could create with, AT LEAST, 20 millions of those 133?.....hummm....just thinking....
This game took nearly 6 years to make??? 133million to 400 people almost seems low...yet unkempt.
Anyway, thanks Rhode Island and Red Sox guy.
I'm still playing the game that couldn't have been made otherwise.
It's like magic.
You dont need so much money to make a good game... look at all the awesome indie games out there... look at super meet boy or minecraft, im sure it didnt cost millions to make those games yet they sold like hot cakes because those games are fun and thats all that matter.
@Jane_22 they are totally different games, super meat boy is a 2d side scroller which is easyer to make. and mincraft the modeling is just cube models very easy to make.
Kingdoms of Amalur in the otehr hard have more complex modeling and coding to do, and its a 3D game, not a 2D game. this is so much stuff that goes into making a game like Kingdoms of Amalur, you should have picked a better list of 3D indie games. maybe like Hard Reset, or EYE.
And none of them are AAA MMO games now are they. That is where all the money went as MMOs are expensive to build and maintain.
Please keep in mind everyone that the 133mil is largely for 38 Studios working on their MMO. MMO's aren't cheap to make and having forced to have a large staff as a start up made it very hard to sustain making the game.
Not funny how the game industry is collapsing. Closing studios, few good games out there for the current systems, milking and overcharging their customers, high development costs, lack of new IP's, gimmick peripherals, online paid subscriptions, VIDEOGAMES going mainstream is the worst that could ever happened. The current gen game library doesn't even compare to the previous one. Online killed single player...the list goes on.
@bradocki Like Yogi Berra said "Place is so popular nobody goes there anymore"
The sky isn't falling, we're just at the end of a generation cycle. Sales will be large again very soon, when people start paying for new console smell again.
They spent that much money but came out with THAT game? Mass Effect 3, The Witcher 2 or the entire Dragon Age series probably didn't even cost half of that!
No, they spent that much money on it AND the MMO Copernicus they were working on. AAA MMOs are very expensive to build as they require a lot of infrastructure as well as development.
@FreakshowGamer well the entire Dragon age series would be a bunch of money for DAO and about 20 dollars for DA2
What's that? Pachter wrong again? Clearly you don't actually have to know anything to do this guy's job.
@RaddaRaddaRadda Yeh you do you need to know who is gonna go good and say that it will be the other option.
1.3 million copies of a new IP is a success. The amount of money that the studio spent is absolutely baffling. To spend so much before you have any revenue coming is awful business and economic practice, You have spend money to make money but you have to do it wisely.
@Texasguy I agree that 1.3 million copies is a success...I also think an expectation of 2 to 3 million copies is very unrealistic for a brand new IP.
KoA:R looked like a good game and it had some well know publishers. The only problem will this game is that it should of came out in 2009 or 2010. there are so many role playing games now of days people only go for the ones that are worth there money (skyrim). The same thing happened to (War in the north)
@Ramhole An excellent point, KoA: R did not distinguish itself from other sword and sorcery RPGs, there are lots of them out there and KoA really only had 2 things going for it marketing wise: Curt Shilling and cross promotion with ME3. That was not enough when it was going up against not only the juggernaut that is Skyrim, but I believe Witcher 2's PC release was around that same time too. So it had to compete with not one but two good established franchises. If they had been smart and released/focused on gaining some success with KoA before plunging into the MMO genre they would likely still be in business, but instead they shot for too much too quickly.
I bought Skyrim and KoA:R around the same time and I know this - I stopped playing Skyrim after a short while and have played KoA a lot more. KoA is immensely fun and rewarding gaming experience, much better than the overhyped Skyrim. I feel gamers today are like sheep buying something in droves because media hyped it to being "cool". e.g. Call of Duty, Diablo, God Of War. Not saying these games are bad, but because of the media, they're instant platinum hits and the devs don't have to work much to make money nor innovate. Take away features or sell features as $15 DLC and people buy it in millions. Naive sheep gamers are the big problem.
@fanirama I put about 80 hours into Reckoning (Xbox only) and north of 300 in Skyrim (Xbox and PC editions combined). Reckoning is definitely fun and the combat is better than Skyrim's, but Skyrim has it beat just about everywhere else (even in plot, and Bethesda is terrible in that department).
Ultimately, it comes down to whether you prefer fun combat or deeper exploration and more variety.
@fanirama In this case, the big problem was that they spent $118 million before the game hit the shelves. The game sold fairly well, but the development was horribly mismanaged.
You realize that the majority of that money went into the development of the MMO they were working on and not KOA:Reckoning don't you? Alamur did not cost that much to make, even with the acquisition of Big Huge games.
@fanirama ITT: My opinion is better than your opinion.
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