fumanstan

I have a very close friend that works there, so its definitely been a bummer since i've known all the stuff going down for the last few weeks.

Jay G.

More bad news for some employees:
http://www.theverge.com/gaming/2012/...some-employees

Barth

While I agree to an extent, are we seeing the next big gaming crash that happened right before Nintendo took charge in the mid-80s?
My instinct tells me no, I think there's too much money at stake for the industry just to come crashing down. The big market games are making just as much as big market movies these days. My fear is that with this we're just going to get CODs over and over again with no one taking a chance on making something new. Much like Hollywood is doing with movies now.

mhg83

I think the Indie gaming market is going to get bigger over time because of this. There are a lot of great innovative games out there on PC.

Decker

I seriously don't understand what happened here. This is a company that released one game -- and a pretty good one at that. It wasn't a huge hit, but it wasn't a flop either. This isn't like THQ spending millions and millions to bring sketch pads and U-Draw games to the 360 and PS3. Why did this company implode so badly? Were they due for failure unless Amalur sold in Skyrim/Mass Effect-like numbers?

covenant

It needed to sell over 3 million to break even. It only sold 1.22 million. It flopped, hard.

fumanstan

Some speculation on my part, but I imagine some could be poor management, or poor business decisions, but mostly shooting a bit too highly in what they were trying to do. Keep in mind the one game that was released was by Big Huge Games, a studio that 38 Studios bought and kept afloat; the main studio has been working on an MMO since it's inception 5 years ago and that has been the primary game all this time. That's 5 years of development with absolutely zero information about the status of that project or what the game was going to be like; it wasn't until all the financial news came out that a video with the flyby of the world came out.

<iframe width="560" height="315" src="http://www.youtube.com/embed/m9nvnrP0j8U" frameborder="0" allowfullscreen></iframe>

That's a lot of time without any major release information, and as far as I know without any publisher funding. Reckoning was published by EA, but EA didn't have any comments about a long term publishing agreement. It also sucks for a new studio to try and release an MMO; even big studios working on established properties like Bioware releasing Star Wars: The Old Republic is tough as it started off well but has dropped in subscriber numbers quite a bit since the holidays. Given the development costs to make an MMO, its quite a money sink for years until the game actually comes out and you start seeing subscriber numbers come in. And even then, MMO's require a lot more money to support and to keep alive. 38 employed close to 400 people when it shut down (between its main studio and Big Huge Games); thats a lot of employees for a company that's released 1 mildly successful game, and makes sense as to why a $75 million loan from the state of Rhode Island was taken.

MoviePage

There's a lot of good journalism out there surrounding this whole event (and a lot of bad journalism too, of course). Most of it heaps the majority of blame at the feet of Curt Schilling.

Duran

That editorial isn't very good, in my opinion. It blames Curt Shilling, but doesn't say why, and then gives a free pass to the CEO and management. He says the governor should resign over this? Really? Just silly.

Jay G.

I thought it was interesting that he pegged the cost of an MMO at $180 million for development, with an additional $80 million for post-launch support.

SW:TOR reportedly cost around $200 million to develop, and that appears to be all pre-launch:
http://venturebeat.com/2012/01/20/ea...-old-republic/

Obviously costs on MMOs can differ, but I guess the assumption here is the Project Copernicus was intended to be a "WOW Killer," and thus on the level of production of these titles. It seems like setting out to do that as a newly-formed company seems a very wrong-headed idea.

As for whether poor sales of Reckoning affected the company, wouldn't that depend on the publishing deal? I though publishers typically took on all the development costs, either paying for it as it goes, or buying the game once it's down. This is why a studio like Double Fine, which had two notable flops including its first title, still continues on. I suppose 38 Studios might have arranged for some other deal with EA where they shared costs in order to get a bigger cut of the profits, but I'm not sure.


Interesting story here, where one former employee explains that 38 Studios made that last loan payment on the expectation of receiving state tax credits that didn't materialize.
http://www.examiner.com/article/38-s...ut-tax-credits

flashburn

SWTOR had one of the biggest (if not the biggest) budget of any MMO, pre-release wise at least.

Fandango

Also, Schilling says, he stands to lose $50 million of the fortune he earned as a professional baseball player and committed to the venture.

Within 72 hours of Chafee's May 14 statement that the state was trying to keep 38 Studios "solvent," Schilling says, a video-game publisher pulled out of a $35-million deal to finance a sequel to Kingdoms of Amalur: Reckoning, the fantasy game that 38 Studios released in February.

http://news.providencejournal.com/br...ting-schi.html

chuckd21

I don't even know why the governor should resign over this. The deal was put in place by his predecessor.

UncleGramps

In more positive news, I just bought a used copy of this game for $20 on Amazon. Yay!

chuckd21

You're the reason they went under. Retroactively.

TGM

I will probably pick this up at $10 price point.

Kedrix

5 dollar bargin bin for me! J/k (I'll probably buy it at like $20 when best buy or fry's holds a sale)...seriously though if over a million sold on a basically unknown game is enough to put the studio under, then that studio had zero clue how to budget. And unless somebody in the gaming community mentioned it to me, they also had zero clue on how to market it too.

Decker

You mean putting out a flawed demo that made you create a character, then sit through 30 minutes of exposition/tutorial before sending you out into the open game world to encounter a random demo-ending glitch isn't the best way to market a new IP?

UncleGramps

I liked the demo.

Also, I'm with Kedrix. The game was fine, and sold well for a non-established franchise. Clearly there were some shenanigans afoot within 38 Studios management.

tonyc3742

It was fun. It's not great, but it's not crap. I think I've played it about as much as I have played Skyrim. Right before launch, wasn't it getting all sorts of "Perfect combat!" "Awesome game!" buzz?

I'm sorry to hear of any studio going under, especially one that is made of up, or led by, gamers, and that hasn't really seemed to want to nickel-and-dime their customers.

Jay G.

New article, where a lot of former employees speak out. Interestingly, they have mostly nice things to say about Schilling, and pin most of the blame on RI governor Lincoln Chafee:
http://www.gamasutra.com/view/news/1...tra_Report.php

I still think that their business model: which was apparently to continually court new investors to inject new money into the ever increasing budget for Copernicus, probably wasn't the best model for developing an MMO, even if Chafee did more or less sabotage all interest by potential investors.

The article does also attempt to dismiss the notion that the sales of Kingdoms of Amalur: Reckoning had anything to do with the studio's collapse.

fumanstan

Yeah, my friends there don't have anything bad to say about Schilling and echo the sentiments in that article. All the former employees have nothing but good things to say.

Setzer

Well they didn't fail because of Kingdoms of Amalur being a bad game, it was actually a solid RPG. Having to sell 3 million copies to break even? That's ridiculous, especially for a new IP. This isn't like Diablo or a Halo game where you can expect to sell millions of copies. Poor management and planning on their part. Selling 1.2 million copies for a new game franchise should have been pretty damn good.

glassdragon

Honestly, I'm sure the company was full of great devs and I don't think you can throw it all on schilling. I really want the game and will probably get it at one point, but this may not have been the greatest time for a new company to release an unestablished IP for a full 60 dollar price point. And the amount they would have to sell to make it back is ridiculous. To sell 3 million copies on consoles typically means you need to have Call of duty in your title somewhere sadly.

I will say though that emailing them the day they were to be laid off with a "CYA" was probably not the best way to handle this. If this was going to happen they should have given some notice to at least let the devs get some affairs in order and some resume's out instead of just saying "Hey, you no longer have a job after today, good luck".

Jay G.

It didn't have to sell 3 million to break even. From the article I last linked to, the 3 million point would've fulfilled a clause whereby publisher Electronic Arts would start paying a cut to the studio. But the indication is that otherwise the game was successful for 38 Studios in the sense that they successfully sold it to the studio and made their money back (and probably a nice profit).

Reckoning wasn't the problem. The problem was Copernicus was a huge money sink that wasn't generating revenue and needed more funds to be finished.