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38 Studios End Game

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38 Studios End Game

Editorial - posted by VentilatorOfDoom on Tue 24 July 2012, 09:30:46

Tags: 38 Studios; Kingdoms of Amalur: Reckoning

Some of you might remember 38 Studios, the makers of Kingdoms of Amalur: Reckoning, who went belly up after the game failed to achieve the 3 million sales necessary to "break even". Boston magazine caught up with Curt Schilling and a few other ex-employees for a 9-page feature covering the company's rise and downfall.

Despite keeping an uncharacteristically low media profile of late, Schilling has agreed to meet with me. So while the players wait for their next game of the tournament, the former pitcher takes a seat in a lawn chair and performs what winds up being an emotional, two-hour-long autopsy of 38 Studios. The company’s death was grisly: Before going under, it defaulted on the $75 million guaranteed loan that the state of Rhode Island had used in 2010 to lure it to Providence. As the money ran out, the company encouraged its 379 employees to continue coming into work, even though it knew it could not pay them. Staffers realized they’d been stiffed only when they noticed the money missing from their bank accounts. A pregnant woman had to find out from her doctor that her healthcare benefits had been cut off.

Add it all up, including interest, and already-cash-strapped Rhode Island could be out as much as $110 million on the loans. As Schilling sits beside the softball diamond, his company, with nearly $151 million in debt and just $22 million in assets, is being liquidated through Chapter 7 bankruptcy.

Asked about 38 Studios’ failure, Schilling says his management team suffered from “significant dysfunction” and that his video-game developers worked too slowly. Those problems, he allows, are his fault. “As the chairman and founder,” he says, “who’s above me?”

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