The Collapse of 38 Studios

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Unfortunately, I waited way too long before starting up a dedicated thread for this (my bad) and there's way too much of this debate in the Kingdoms of Amalur: Reckoning thread to post here but if you want to catch up, the meaty discussion starts more or less here and ends more or less here. Be warned, there's some heated viewpoints.

I've written a blog post on this whole thing which takes a strong view of one side but also links off to a bunch of articles relating to how this all went down if you want to catch up. There's also a bunch of links to various stories from myself and others in the range of posts linked above.

I imagine there will be a lot to discuss about this as more details emerge. Given that a big part of this drama involves a government loan that will be defaulted on, I suspect most of the impending proceedings will be very public.

That Dunkin Donuts link in the other thread is kinda unreal. It speaks volumes about how people, both the employees at 38, and fans (to a lesser degree), are hoping against evidence about how this all went wrong. The negligence and ignorance.

Edit: Willful. Willful ignorance.

Yeah better to keep that other thread about the pretty good/great game, and discuss the business problems here.

What bothers a lot of people is that Schilling's past political views do not seem to mesh well with accepting a government loan for a game company, of all things.

If Schilling had any consistency in his ethics he never would have asked for assistance from taxpayer money in the first place, given his rather public political views. I can't say if he feels bad or not about the failure of the company and the fates of its employees, but something tells me he's not going to sleep uneasily over the impact this has on the state of Rhode Island.

Thing is, the real cost to Rhode Island of this debacle is going to be much more than the cost of the loan plus the interest. Factor in lost tax revenue, unemployment insurance, and the further loss of reputation in a state already tarnished by corruption and poor management and things are going to be even worse for an already revenue-poor state.

I can understand why they were tempted by this deal - RI is job-starved and desperate for some sort of positive growth. However that doesn't make the deal any less ill-advised. I'm not necessarily against government investment in private industry, but the risk level of this deal was through the roof and shows the lack of expertise in the industry and consideration of the long-term impacts if it failed. They had $125 million to play with and managed to blow two thirds of that out the window.

imbiginjapan wrote:

If Schilling had any consistency in his ethics he never would have asked for assistance from taxpayer money in the first place, given his rather public political views.

In fairness to him, it wasn't assistance from Rhode Island, it was a bribe by Rhode Island to get 38 Studios to move out of MA.

The housing scandal brought up in the other thread is at least partially true. This is quickly going into potentially criminal territory. I really don't know what defence there is for things like this.

Parallax Abstraction wrote:

The housing scandal brought up in the other thread is at least partially true. This is quickly going into potentially criminal territory.

If true then it's going to get really bad for management there because someone had to know what was going on..

You hear that? That's the sound of emails and paper getting deleted and shredded really really fast...the IT Directors phone is blowing up as well...and this is where things get interesting..who is recording what? And for what reason? RI will be investigating for sure but it may be to late

TheGameguru wrote:

You hear that? That's the sound of emails and paper getting deleted and shredded really really fast...the IT Directors phone is blowing up as well...and this is where things get interesting..who is recording what? And for what reason? RI will be investigating for sure but it may be to late

Couldn't they be brought up on obstruction of justice charges in that case?

TheGameguru wrote:
Parallax Abstraction wrote:

The housing scandal brought up in the other thread is at least partially true. This is quickly going into potentially criminal territory.

If true then it's going to get really bad for management there because someone had to know what was going on..

You hear that? That's the sound of emails and paper getting deleted and shredded really really fast...the IT Directors phone is blowing up as well...and this is where things get interesting..who is recording what? And for what reason? RI will be investigating for sure but it may be to late

That's not the sort of thing that's only going to be showing up in a few e-mail accounts and file cabinets. Tough to erase that kind of paper trail.

I know nothing about how US real estate laws work versus where I'm from but is this even permitted? If 38 Studios takes over your mortgage as an incentive to get you to move and they go out of business, is the city/bank seriously allowed to come after the former owner for that instead of just foreclosing on 38 Studios?

I work for what I feel is a stable, ethical company but I so hope to never be involved in a situation like this. I'd be one of the guys asked to destroy data and shred documents and I just couldn't do it.

Scott Jennings/Lum the Mad posted his thoughts: http://www.brokentoys.org/2012/05/25/the-week-the-music-died/

Gremlin wrote:

Scott Jennings/Lum the Mad posted his thoughts: http://www.brokentoys.org/2012/05/25/the-week-the-music-died/

I meant to re-link that, thanks! This guy makes the point I was trying to make in my blog post except unlike me, he knows how to write worth a damn.

Parallax Abstraction wrote:

I know nothing about how US real estate laws work versus where I'm from but is this even permitted? If 38 Studios takes over your mortgage as an incentive to get you to move and they go out of business, is the city/bank seriously allowed to come after the former owner for that instead of just foreclosing on 38 Studios?

Yeah you would think in some world that made sense those banks would be first in line for bankruptcy stuff, but it should be on the company.

Apparently the company once again violated its agreement with the state by not providing 60 days notice of layoffs and the state is demanding a full audit of how their funds were used because the governor says there will be "so many lawsuits". Damn.

Interestingly, apparently 38 Studios had an agreement with IBM to have Project Copernicus' progress regularly analysed and reported to the state but at their request, they asked for that agreement to be adjusted so that IBM would only provide the state "briefings" instead of the full assessments.

Perhaps they'll pay the employees for 60 days worth of ... oh, wait, they weren't paying them already.

Watching a company implode is never fun, but this is all sorts of crazy.

Edit: And ffs can someone find a full transcript or video of the RI governor's press conference where he talks about the 3 million copies. That number sounds incredibly inflated to me and just about everyone points back to Kotaku, which merely references the press conference.

garion333 wrote:

Edit: And ffs can someone find a full transcript or video of the RI governor's press conference where he talks about the 3 million copies. That number sounds incredibly inflated to me and just about everyone points back to Kotaku, which merely references the press conference.

I was watching live, and the governor definitely said the game needed to sell 3 million to break even. Agree that it seems crazy and inflated, but it could also be that the people up top at 38 were just that misguided/poor in their planning. Hard to say for sure.

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

pkollar wrote:
garion333 wrote:

Edit: And ffs can someone find a full transcript or video of the RI governor's press conference where he talks about the 3 million copies. That number sounds incredibly inflated to me and just about everyone points back to Kotaku, which merely references the press conference.

I was watching live, and the governor definitely said the game needed to sell 3 million to break even. Agree that it seems crazy and inflated, but it could also be that the people up top at 38 were just that misguided/poor in their planning. Hard to say for sure.

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

Lol. Yeah, the quotes will take effect in a week or two. It's a way to stop spamming.

I came back to alter my comments because I realize that the Governor did in fact say that it would've taken 3 million units to break even based on experts he spoke to, but I was hoping there was more detail somewhere. Who did he talk to? 3 million units at $60 a pop or over a lifespan? etc

pkollar wrote:

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

We get a lot of spammers, so new accounts unfortunately have to start with a pretty minimal permission set.

After you've been here a short time, everything should open up and start working for you.

Also, welcome.

[Edit: merphlehauser'd]

pkollar wrote:

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

It's simply because you're new and your post count is low. Once it reaches a certain threshold/age, all your quotes turn active. A way to catch spambots, really.

(BTW -- are you Phil Kollar, games journalist? If so, cheers. If not, cheers as well.)


On topic: I'm just bummed -- I've given Amalur a few hours here and there on the full game after the demo impressed me to some degree and the crowing about it from sources that I trust on this forum sealed the deal. I was looking for an antithesis to Skyrim, and it certainly scratched that itch. I hope everyone at 38 and BHG lands on their feet, and I hope that some of the interesting wrinkles in the open-world RPG -- particularly in some of the art direction -- finds a foothold elsewhere.

Dimmerswitch wrote:

[Edit: merphlehauser'd]

pfft I said it first.

pkollar wrote:
garion333 wrote:

Edit: And ffs can someone find a full transcript or video of the RI governor's press conference where he talks about the 3 million copies. That number sounds incredibly inflated to me and just about everyone points back to Kotaku, which merely references the press conference.

I was watching live, and the governor definitely said the game needed to sell 3 million to break even. Agree that it seems crazy and inflated, but it could also be that the people up top at 38 were just that misguided/poor in their planning. Hard to say for sure.

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

New members to the site are prohibited from using various BBCode tags, in an attempt to cut down on malicious spamming. Just give it time.

Edit: T'hauser'd.

On-topic: Thanks Parallax for creating this thread; I agree that it's discussion-worthy, and doesn't deserve to clutter up the thread of a pretty fun and enjoyable game. That said, I'm not willing to blindly lay blame on any individuals at this time, Curt and other management included -- innocent until proven guilty, and all that jazz. Let ALL the facts emerge, then we can have an intelligent and informed debate.

I suppose it's wayyyyy too much to hope that Curt would be willing to sign up for a GWJCC one of these days, to share some inside baseball, as it were.

Garion is credit to team!

pkollar wrote:
garion333 wrote:

Edit: And ffs can someone find a full transcript or video of the RI governor's press conference where he talks about the 3 million copies. That number sounds incredibly inflated to me and just about everyone points back to Kotaku, which merely references the press conference.

I was watching live, and the governor definitely said the game needed to sell 3 million to break even. Agree that it seems crazy and inflated, but it could also be that the people up top at 38 were just that misguided/poor in their planning. Hard to say for sure.

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

We'll let is slide this time, but I've got my eye on you.

In other ignorant news, are MMOs really worth it? I love MMOs, but I feel for every one that succeeds, four more sink a company's reputation and money. Would 38 Studios have made it if they had just stuck to their guns? Trying to sell 3 million copies with a new high-fantasy IP is insane! Even if it was a great game that came out at a good time (When Skyrim broke!), there was no chance of it doing 3 million. As someone who's been part of CAG for many years, it's wasn't hard to tell this game was going to retail for $20-$30 in 2 months, I don't see how the people running the company couldn't either.

I'm also proud of the industry for standing up and posting all of those job offerings. I think a lot of people wanted to see these guys make it; there is real talent there. I just hope to not have to see this again for awhile. It really is a heartbreaking mess.

casual_alcoholic wrote:

In other ignorant news, are MMOs really worth it? I love MMOs, but I feel for every one that succeeds, four more sink a company's reputation and money.

Not in the way they have been doing it certainly. There's a reason why THQ is reshaping their Warhammer 40k MMO into a singleplayer game, and only then after they couldn't find a single company interested in buying it from them.

I agree with you, because it feels like a lot of them follow the same trajectory, see TOR, Vanguard, Age of Conan, etc.:
- Developer announces MMO.
- MMO is delayed for a year.
- MMO goes dark and you hear nothing about it.
- They remind you it exists but that it's going to get delayed again.
- It's delayed again and rumours surface that they already spent a bazillion dollars on making it.
- You start to wonder if maybe they cancelled it.
- It's delayed again.
- Game finally comes out, everyone complains that there isn't enough content(?!) and it dies a slow death.

kuddles wrote:
casual_alcoholic wrote:

In other ignorant news, are MMOs really worth it? I love MMOs, but I feel for every one that succeeds, four more sink a company's reputation and money.

Not in the way they have been doing it certainly. There's a reason why THQ is reshaping their Warhammer 40k MMO into a singleplayer game, and only then after they couldn't find a single company interested in buying it from them.
I agree with you, because it feels like a lot of them follow the same trajectory, see TOR, Vanguard, Age of Conan, etc.:
- Developer announces MMO.
- MMO is delayed for a year.
- MMO goes dark and you hear nothing about it.
- They remind you it exists but that it's going to get delayed again.
- It's delayed again and rumours surface that they already spent a bazillion dollars on making it.
- You start to wonder if maybe they cancelled it.
- It's delayed again.
- Game finally comes out, everyone complains that there isn't enough content(?!) and it dies a slow death.

And that's the best case scenario!

RSPaulette wrote:
pkollar wrote:

EDIT: Also quoting didn't seem to work correctly? I'm new here. Please don't ban me.

It's simply because you're new and your post count is low. Once it reaches a certain threshold/age, all your quotes turn active. A way to catch spambots, really.

(BTW -- are you Phil Kollar, games journalist? If so, cheers. If not, cheers as well.)

Afraid so. Glad to have the quote thing cleared up, makes sense well enough.

And yes, I think between this and The Old Republic, MMOs -- especially triple-A, subscription-based MMOs -- are in serious trouble.

pkollar wrote:

And yes, I think between this and The Old Republic, MMOs -- especially triple-A, subscription-based MMOs -- are in serious trouble.

I still don't understand how WoW and EVE are charging $15 a month and surviving.

There's so much to play for free... good stuff, like DCUO, STO, CoH, DDO, and LotRO that were all once pay games.

And even always free stuff like Spiral Knights or non-MMOs like Super MNC or League of Legends are just waiting out there for people to spend hundreds of hours on for free.

Why in the hell anyone would pay monthly to play something only slightly better (which is pretty subjective) is beyond me...

I probably had more general FUN playing DCUO than any other MMO (and I've played everything I listed in my post), with it's action-y combat and familiar hero tie-ins and guest appearances. But still I can't find the time to go back and finish leveling to 30. Much less time for all the rest of these free things. Or the pile of non-online games I have to play.

The last thing I ever want to see released is more MMOs.

Welcome Phil! I presume you're here cause of our little Twitter exchange this afternoon. It's a good place here. Very anti-Internet.

I think TERA is the last AAA MMO we're going to see launch with a subscription for a very long time. And funny enough, I was in the beta (not playing retail) and got an e-mail coupon this afternoon for 25% off the game. This close to release, I don't take that as a good sign. I'm certain even Blizzard's Titan MMO will be F2P or a hybrid model like Guild Wars as GG said and WoW will definitely go that way too once the numbers start dropping fast enough. I guarantee you Blizzard has that framework in place already. I don't think in an era where these alternative business models are taking off like a shot does a subscription make sense anymore. At the rate things are going, I don't think $60 retail games have much of a life left either. That worries me in terms of single player games but that's another discussion.

I can't imagine what the employees in this housing situation must be going through now. If I lost my job, my health insurance and then had that bomb dropped on me, that would possible convince me to re-enact Falling Down. This is beginning to feel a lot like a gaming industry Enron of sorts. At least it wasn't a huge publisher with thousands instead of hundreds of employees that this happened to. I guess.

Stele wrote:

I still don't understand how WoW and EVE are charging $15 a month and surviving.

I don't understand WoW either but EVE has incredible niche appeal and no other game can match what CCP is doing with that one. They've found a way to make money and keep developing other stuff on I think less than half a million subscribers. Amazing what happens when you design your business around realistic expectations. Though being in Iceland doesn't hurt them either. I think EVE is amazing and if I had that kind of free time and was interested in no other games, I'd probably pay and play it. The stories and videos I see of that just look so amazing but I just don't have the time to put into it. Like the Burn Jita thing? Look that up if you don't know what I mean. Amazing! But the model works for them because they found a formula that works and are just nurturing that, not trying to do things that don't make sense for them. I think EVE and CCP in general is an amazing case study for the video games industry in how to do things right. But both it and WoW have F2P up their sleeves for when they need it I'm sure.

Parallax Abstraction wrote:

I can't imagine what the employees in this housing situation must be going through now. If I lost my job, my health insurance and then had that bomb dropped on me, that would possible convince me to re-enact Falling Down. This is beginning to feel a lot like a gaming industry Enron of sorts. At least it wasn't a huge publisher with thousands instead of hundreds of employees that this happened to. I guess.

I'm honestly worried about the employees. This kind of housing/health-insurance mess can really f*ck your life up but good. And that's even without throwing lost employment into the pile!

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