Thousands of Documents in 38 Studios Case Released

New details about the events surrounding the controversial $75 million loan have emerged.

63 Comments

The Rhode Island Superior Court on Thursday released thousands of documents and deposition transcription excerpts pertaining to the controversial loan agreement that brought former Red Sox pitcher Curt Schilling's video game company 38 Studios (Kingdoms of Amalur: Reckoning) to Rhode Island in 2010.

These documents were previously sealed, but have now been released, and will be viewable to the public through the end of the year. Take a look at them here in this DropBox folder. The page is slammed with traffic at the moment, so you may not be able to view the documents right away, but keep trying.

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GameSpot is currently looking over the documents and will report back with what we find. One document contains the memo that was sent to then-Rhode Island governor Donald Carcieri with some revenue projections for Kingdoms of Amalur: Reckoning and the PC MMO Copernicus. Check it out below.

The Providence Journal reporter Paul Grimaldi also has a great rundown of revelations from the documents.

The collapse began when Schilling was unable to keep up on debt payments to the state of Rhode Island for a $75 million dollar loan to the developer. After that, the government assumed ownership of the company and shut it down. The government then filed a lawsuit against Schilling and other architects of the state's loan to the studio.

At an auction in December 2013, 38 Studios properties Rise of Nations and Rise of Legends were purchased, but Kingdoms of Amalur and Copernicus were not picked up. Subsidiary Big Huge Games, closed amid the 38 Studios bankruptcy, has since been resurrected by co-founder Brian Reynolds.

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NL_Skipper

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Edited By NL_Skipper

What the frack....? Who came up with the net revenue figure of $150 MILLION USD!? That's outrageous for basically ANY game, let alone a brand new IP from a brand new company... and also expecting the MMO to release only a year after the initial RPG...?

Yea, whoever believed/agreed to these insane terms had exactly what was coming to them, it's pretty obvious they had no clue about the industry they were granting a loan to.

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Rantore98980

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Edited By Rantore98980

Eddie, you will still manage to give a dumb correlation and/or reason behind the controversy even though you have court documents in front of your face.

I await your impending failure article. Just as a preventative measure, I'm reading the documents myself. Thanks for nothing and hopefully you can find a real job some day.

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Thanatos2k

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Give it up Rhode Island. You lent money to a company that failed. You gambled and lost. You're not getting your money back.

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NL_Skipper

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@Thanatos2k: That's not good enough! Now they need to spend an additional 20 million in legal fees to try (and fail) to get that money back!

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nurnberg

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Edited By nurnberg

LMAO! Their "conservative" estimate was 450 millions in revenue from Kingdom of Amalur. Then the mmo would bring 700 millions in revenue. How delusional. The government was stupid for accepting this loan.

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Thanatos2k

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Edited By Thanatos2k

@nurnberg: 450 million in revenue is a crazy number. Even at $60 a pop (all of which is not revenue due to distribution costs and discounts to retailers) you'd need to sell 7.5 million copies, which few games ever get close to, and certainly not new IP. Probably needed to sell more than 10 million to get there, which is reserved for the Call of Duties of the world ALONE.

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RSOCC

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Edited By RSOCC

The MMO landscape is dead. WOW will tinker on with mostly overseas accounts. SWTOR will leverage their brand and try to keep money coming in, but as a product it's static.

EQ and others will stick around in a Zynga fashion.

The problem with the Amalur MMO was half timing and half inept leadership. Schilling hired a bunch of 'insiders' who did not have the acumen to build a company slowly. He also hired executives with almost no small business experience. He had visions of grandeur in building a product to compete with WOW. The only issue is WOW was the result of over 10 years of solid products and a good, core small leadership team. KOA was led by disparate people brought together not by love of gaming, sans Curt, but by the gleam of money.

Anyways, it wouldn't have mattered if they had the best team in the business. You can look at even a well run company like Trion and know that the MMO world is pretty much gone until we see a paradigm shift

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Thanatos2k

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@rsocc: The Amalur MMO was never going anywhere.

Failed MMO development killed 38 studios. Failed MMO development killed THQ.

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Stiler

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@rsocc: First off, I agree that mmo's are far too static now, following the same general "formula" of the theme park world, with npc's standing about giving out quests that lead you from one level zone to the next.

It's funny that the first major gen of mmo's, Ultima Online, Everquest, Asheron's Call, were all VERY different from one another and didn't follow any similar "formula" in regarids to each other. Each game was so much fun because they weren't like the other, sadly those times seem mostly gone. You do not get that much difference outside of small Indie mmo's but those often struggle with eveni finishing the game or having the money to stay up and running to attract enough people.

Also you may not know this, but koA was made by Big Huge Games. Who were working on the game even before 38 studios. They ended up buying big huge games (this is AFTER they are already working on their mmo). They bought them and had them re-tool their game to fit in the KoA lore and things.

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gamingnerd121

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It's a shame that KoA didn't get a chance to continue, but at least it lives on in other games. For example, Dragon Age: Inquisition is using the crafting it had.

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Ripper_TV

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It's all very interesting... ("roll playing game")

This game shouldn't have cost this much to make really, the end result loooks veeeery cheap. At least Shenmue looked unique and great for the time. Seems like it was simply a funds mismanagement.

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WingChopMasta

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I still can't believe no one picked up KAR. It was such and awesome and refreshing rpg world to explore. For a new IP it was great and a veteran company could've easily took this and made it even better.

We won't even see a remaster of it which is so sad.

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NL_Skipper

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Edited By NL_Skipper

@WingChopMasta: Pretty sure the only reason it never sold was because Rhode Island now owns the IP, and they were asking an absurd amount for it... for some partially developed, poorly managed, potential pieces of an MMO...

Several bids were made but all that was said is that none of them were "acceptable", so it's likely they were expecting too much... and one look at their projected revenue will show you how little they know about AAA gaming profits/values

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Ditronus

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@WingChopMasta: Except its "open world" was a series if smaller zones connected via tunnel-like pathways (look at the map). A bigger problem than that, however, was the quest design: they had bland, mmo-styled quests. Either you killed something, escorted something, or collected something; everything was trivial.

Sure, Skyrim had a similar type of questing design, but they had a lot of their famous "environmental story telling" and the first-person aspect added to the immersion while doing the quests.

KoA was decent, but wasn't amazing, and certainly didn't hold my attention with its quests or cliché storyline.

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spikepigeo

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SO glad Big Huge games came back from the ashes.

I love, love, LOVED some of the games they worked on. Worst part of all this was them getting caught in the crossfire. Couldn't forgive Schilling and co. for that.

But all may be well. Next order of business is to get a Kingdoms of Amalur sequel. Was a pretty great game.

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Sketchy_Llama

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Edited By Sketchy_Llama

@spikepigeo said:

But all may be well. Next order of business is to get a Kingdoms of Amalur sequel. Was a pretty great game.

I don't think anyone bought the IP when Rhode Island put it up for auction or am I mistaken?

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spikepigeo

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@sketchy_llama: you are correct. The state of Rhode Island currently owns it. Someone needs to buy it from them first.

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SDINH225

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KoA was an awesome and underrated action RPG, sad to see it won't see any more games for it . Compared to the likes of Skyrim, it had much better gameplay IMO especially them flaming shockram combos but it just can't compete with how big the world of TES games are and the ability to mod the hell out of them making them even more customizable to each individual's liking.

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Daian

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Edited By Daian

According to that document they predicted it would make 450 million $! That is ridiculous. That's 7.5 million copies sold at full 60$ price.

That's just extremely unrealistic expectations for a new IP.

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nurnberg

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@Daian: To make 450 millions they would need to sell at least double that amount... because EA would take a big share of the revenue from sales.

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dussan2

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@Daian: but Amalur was a really good game.

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Thanatos2k

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@dussan2: Yes, but no RPG outside of Elder Scrolls will ever get close to that number of sales. Witcher 3 MIGHT get close. And that's about it.

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soldjango

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@dussan2: Doesn't matter how good a game is--if it doesn't come from a well-known or well-respected IP then you aren't getting those kinds of sales from the first entry.

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jinzo9988

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Edited By jinzo9988

@soldjango: Not only the IP in and of itself but the developers as well. Developers matter too, case in point Destiny which was a new IP and sold over 6 million units within the first month completely on the back of the reputation that Bungie has and their previous smash success (Halo).

To me Kingdoms of Amalur came out at completely the wrong time. The consoles were nearing the end of their lifespans and so both the 360 and the PS3 had gigantic libraries at that point... and as good as Kingdoms of Amalur may have been, it's not like you couldn't have named at least 5 other games on the same platform that are just as good if not better in the same category, not to mention dozens upon dozens upon dozens of better games from all genres. I think it would've done better had it been released a few months before Witcher 3 or a few months after Witcher 3... that sweet spot where the generation is just picking up steam but the libraries haven't really taken off just yet.

It may be good to think that because you have an audience of what could've been 100 million platform owners at the time, you have a good shot at selling a ton of copies, but when consumers have so much freaking choice regarding the libraries of games and you're competing with a mountain of games, it's hard to sell anything at even 5 million copies let alone 7.5 million unless you're super well-known as a franchise.

They spent franchise money on a franchise they didn't actually have yet, and that's simply dumb management. I mean it's right up there with Zynga's rapid expansion after the success of FarmVille, as if they thought they were going to repeat that same level of success with something else.

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soldjango

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@jinzo9988: The developer matters to people like us, but if 38 wanted Kingdoms of Amalur to sell as much as they wanted, then they're selling to a mass audience and the mass audience doesn't give a **** who developed a game. Case in point, World at War outsold Call of Duty 4 despite Treyarch being far and away less popular than Infinity Ward at that point in time.

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nurnberg

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@jinzo9988: This is not comparable to Destiny. Destiny had the full backing of Activision and it had one of the biggest marketing campaign in video game history. Meanwhile Amalur was just a random game being released by EA.

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hystavito

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Edited By hystavito

@soldjango: Even over a 4yr period as stated it does seem like a pretty high estimate. However, the estimates did come from 38 themselves so it's no surprise they would be high, pretty common in business.

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nurnberg

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@hystavito: There is a difference between high and deluded. 38 was deluded.

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hystavito

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@nurnberg: :)

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msauce32

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It's crazy to think that Amalur is already that old. Such a solid RPG, and it released around the same time Darksiders 2 released as well. Two very good RPG's and both companies folded shortly thereafter. In games quality does not always equal sales and success.

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Sketchy_Llama

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One of their missteps is releasing it so closely to Skyrim at least I believe so they were similar in approach to the genre although the graphical content was vastly different. It was a well done game story was pretty decent. One of the hamstrings in my opinion also was the shallow character creation.

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ballaShotCaller

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Edited By ballaShotCaller

@sketchy_llama: Their biggest misstep is to spend 75 million on creating a product they know nothing about. They should have started with some small games and built up to it. Patience is a virtue.

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AyatollaofRnR

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Those revenue projections seem crazy.

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nurnberg

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@AyatollaofRnR: They are. The government is dumb for lending them all this money with such unrealistic numbers.

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wyndman

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It was foolhardy of the State to call in the debt so soon, we've spent much more than seventy-five million on other ill fated projects. This was just the former governor shaking a political stick at his predecessor. As a employee of the SOR I've seen much greater waste than Mr. Schilling's loan payments. They should have just negotiated the terms of the loan if they truly were not grabbing for headlines.

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mrbojangles25

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Edited By mrbojangles25  Online

Dammmmmmmmmmmmn Schilling fronted 75% of the initial 40 million? Wonder if he made any of that back? Probably not.

I actually kind of feel bad for him now, he obviously believed in this game.

*Lol they expected it to net over 1 billion dollars by 2015. That's just hilarious.

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nurnberg

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Edited By nurnberg

@mrbojangles25: http://www.celebritynetworth.com/articles/celebrity/curt-schilling-will-los-entire-50-million-fortune-failed-video-game-company/ Basically he went broke and lost everything.

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mrbojangles25

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Edited By mrbojangles25  Online

I enjoyed Kingdoms of Amular, I am sad this did not take off, but at the same time this is government handouts gone wrong.

I'm not some diehard capitalist swine, I believe in some government assistance, but this was just a stupid gamble.

Also, iirc, Amular was sort of a setup to an MMO they were working on I think. Or maybe it was a sidetracked MMO they turned singleplayer. Something funny like that.

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subsided94

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Kingdoms of amalur was excellent and the game deserved to be that successful , sadly it wasn't

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DaVillain-

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DaVillain-  Moderator

Even if Amalur had sold well, it would barely have put a dent in the debt that was poured into its creation. This is what happens when a bunch of people who know nothing about an industry risk other people's money trying to pick a winner.

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Sketchy_Llama

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@davillain-: Except they were not just using the funds for KoA they were also using some of it for Project Copernicus. They were building the assets and the world that would have followed in Proj. Copernicus. But the idiot gov devalued it beyond repair. Well that and mismanagement of the talent they had. Funny thing is most of the people that worked on it still talk and are on pretty good terms.

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Lpedraja2002

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Edited By Lpedraja2002

@sketchy_llama: The financial advisors and analysts should be the ones to blame, they dropped the ball big time or probably lied to make the game get funded. I don't think any new IP, no matter how good will gain that much revenue, they need to establish a fanbase first then start escalating things. They went straight for a World of Warcraft competitor and just skipped all the years Blizzard had put in to establish the IP and fanbase. This case will surely be studied in video game development cand economy courses.

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mrbojangles25

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mrbojangles25  Online

@davillain-: Yeah I don't know what genius went "Baseball player? Video games? HOW COULD THIS POSSIBLY GO WRONG!?"

The game was solid, which makes it all the more shameful it was not properly managed.

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ThePope2k6

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@mrbojangles25 : Curt Schilling was a gamer's gamer. He was well-known in the Everquest community and managed to play regularly, even during the baseball season. Hearing him to talk, back before this blew up, it was clear that this was a passion project, and not a vanity project.

Heck, he invested $30 million of his own money.

The only issue here was that the state called in the loan way too prematurely

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mrbojangles25

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mrbojangles25  Online

@ThePope2k6: Well whatever happened, it's a damn shame. I enjoyed that game very much.

Hell I don't think I even finished it, the game was pretty massive.

Maybe I should reload.

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twaitsfan

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@ThePope2k6: No, the issue is he knew nothing about running a business. He blew through his money way too fast and deluded himself that his first release was going to be bigger than WOW and that another investor was always just around the corner.

He actually talked about business in terms of baseball and not giving up in the ninth inning and other naive hubris. He treated it like a game because all his life, a game is all he's had experience with. And in handling it like that, he took it right to the "ninth inning" and left his employees high and dry with unpaid benefits.

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luert

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@davillain-: very true

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