Editorial 38 Studios End Game

[VentilatorOfDoom]

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?”

 

[Morkar Left]

sked 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?”

Though, it was - of course - everybody else fault but he is generous enough to take the responsibility for it. A true saint!

 

[Brother None]

It's a big read but anyone with a passing interest in this should read the entire thing. It's the best piece I've seen on the studios' downfall, and details the arrogance that led to it very well.

 

[Kane]

 

[Morkar Left]

It's a big read but anyone with a passing interest in this should read the entire thing. It's the best piece I've seen on the studios' downfall, and details the arrogance that led to it very well.

Ok, will give it a try then.

 

[Mother Russia]

The most stupid thing of all though, is how the heck could they have allowed costs to so spiral out of control that they needed 3 MILLION in sales just to breakeven, much less make a profit? Seriously, were they living in lala land? Did someone tell schilling that games like Diablo and WoW were the norm, rather than the exception when it came to sales and revenues? Didn't anyone in their management know about a little something called ' a business plan/forecast'?

And they paid Salvatore what, like $ 3 million for his work? That's a lot of money for an author of fantasy to write background and lore for a vidya game. Seriously, they could have hired me to do a pretty good job at it for 1/8th of that amount.

What a bunch dumbfucks!

 

[Infinitron]

People just can't say no to a CELEBRUHTY. Curt Schilling, meet George Lucas.

 

[Morkar Left]

I read the article. Typical gifted sports talent with no clue how life really works. At least he has some experience now.

The most stupid thing of all though, is how the heck could they have allowed costs to so spiral out of control that they needed 3 MILLION in sales just to breakeven, much less make a profit? Seriously, were they living in lala land? Did someone tell schilling that games like Diablo and WoW were the norm, rather than the exception when it came to sales and revenues? Didn't anyone in their management know about a little something called ' a business plan/forecast'?

And they paid Salvatore what, like $ 3 million for his work? That's a lot of money for an author of fantasy to write background and lore for a vidya game. Seriously, they could have hired me to do a pretty good job at it for 1/8th of that amount.

What a bunch dumbfucks!

Read the article and you will know why (in short: hybris and the business deal with Rode island required to hire a huge amount of employees)

 

[Metro]

Basically just reaffirms what most people knew: Curt Schilling's obsession with producing his own MMO clouded what little judgment/business sense he might have had.

 

[Curious_Tongue]

By 2006, Curt Schilling had earned more than $90 million playing baseball, not including endorsements. But what he really aspired to was being “Bill Gates rich.” He admired the global impact the Microsoft founder had made through his philanthropy, and wanted to do the same. Schilling, who has an autistic son, imagined providing $200 million to open the Shonda Schilling Center for Autism Research. Creating a video game would be what catapulted him to that wealth. More specifically, he would build a massively multiplayer online game (or, blessedly abbreviated, an MMO) — the type that allows people from across the world to play with and against one another. As a kid, Schilling had been obsessed with computers (his first was an Apple II), and during his baseball career, rather than go out carousing, he spent his time playing MMOs. A favorite of his was the industry leader, World of Warcraft, a vast fantasy landscape filled with wizards, elves, and warriors that has more than 10 million paying subscribers.

I'm 28 years old, and I'm still constantly shocked when I find that people out of touch with reality isn't the exception, it seems to be the norm.

 

[Metro]

The funny thing is he probably could just have used his celebrity status to simply raise $200 million for such a foundation through other people's donations rather than simply making an impractical risk to self-fund it.

 

[Phelot]

Yeah, he could have easily sponsored an Autism awareness charity or something. He's a legend in New England and is well liked in general baseball.

 

[Stabwound]

Monumental business fuckups aside, they could have gotten off to a better start than they did with Kingdoms of Amalur. The fact that the company tanked so quickly after the game came out proves that it was just a stillborn corpse they put out to try to recoup their losses. The game didn't even receive a single patch, and at least one of the devs themselves said they were working on releasing one that would increase/tweak the difficulty. If the game wasn't so pathetically easy it could have possibly been a decent mindless loot game.

Releasing it so close to Skyrim didn't do them any favors either.

 

[Kane]

i think with 1.3 million in sales they got more than they deserved.

 

[Stabwound]

While 1.3 isn't even remotely close to Skyrim's numbers (is that across all 3 platforms?) it's still pretty damn respectable. Their problem was drilling their debt into the bottom of the sea. Looking for 3 mill to break even is just pie in the sky. It goes to show you that being a game fanatic with a lot of money in no way qualifies you to run a game studio as well as release a game that you expect AAA-level sales from to even get into the green.

 

[Roguey]

The 3 million number was scare mongering from the governor this article says the 1.3 million exceeded EA's expectations but it needed to sell 2 million for the studio itself to actually receive any royalty payments. EA profited while Schilling suffered.

 

[Metro]

His fault for signing up with EA. Totally unnecessary.

 

[Azrael the cat]

And they paid Salvatore what, like $ 3 million for his work? That's a lot of money for an author of fantasy to write background and lore for a vidya game. Seriously, they could have hired me to do a pretty good job at it for 1/8th of that amount.

What a bunch dumbfucks!

That's what really got me. They could have chosen from the best film and television writers for that kind of money (and they'd still be paying them way more than their usual fee, so that would factor in the extra hours game writnig requires). Those guys are 'working writers' - they're USED to writing on contract, and they do it a fuckload better than your pulp franchise hacks. At $3 million, they could have got the kind of writer who writes lead on Mad Men, Breaking Bad etc. Different genre, sure, but that kind of flexibility is part of being a working film/tv writer.

To have that kind of cash to throw at a writer (on TOP of the usual writing team to implement all the minor quests and NPCs) and then throw it at a franchise hack is fucking unbelievable.

 

[Mother Russia]

And they paid Salvatore what, like $ 3 million for his work? That's a lot of money for an author of fantasy to write background and lore for a vidya game. Seriously, they could have hired me to do a pretty good job at it for 1/8th of that amount.

What a bunch dumbfucks!

That's what really got me. They could have chosen from the best film and television writers for that kind of money (and they'd still be paying them way more than their usual fee, so that would factor in the extra hours game writnig requires). Those guys are 'working writers' - they're USED to writing on contract, and they do it a fuckload better than your pulp franchise hacks. At $3 million, they could have got the kind of writer who writes lead on Mad Men, Breaking Bad etc. Different genre, sure, but that kind of flexibility is part of being a working film/tv writer.

To have that kind of cash to throw at a writer (on TOP of the usual writing team to implement all the minor quests and NPCs) and then throw it at a franchise hack is fucking unbelievable.

Well, in retrospect I do kinda get where they are coming from: Get a very popular fantasy author to write the games backstory, and there is a good chance most of his 'tarded fans will buy the game(s). Still, it rankles.

 

[Mother Russia]

Here is the trailer the employees made right before they left, as a last hurrah:

http://www.youtube.com/watch?v=ICtQX6DHh2A

Wow, looks underwhelming to be honest. This took them 6 years?? And they spend 50 million on this, while TOR took 200 million (with advertising I think though)

And can't anyone get magic right in MMO's? Only Ultima Online was on the right track, but after that every MMO has had glittery glammery CRAP that looks gay and not powerful or deadly at all.

Also, from the article:

His company is now under federal and state investigation. Schilling denies any legal wrongdoing, and while Roger Williams Law School professor Michael Yelnosky says it’s unlikely that Schilling will be held personally accountable for the unpaid salaries under Rhode Island law, there is federal precedent that could force him to pay the wages back, plus damages. Schilling says he would have paid his employees the roughly $1.5 million they’re owed out of his pocket, but he doesn’t have the money. That doesn’t bode well for a lawsuit Citizens Bank filed against him, which seeks to recover $2.4 million in loans to 38 Studios that he’d personally guaranteed. Presumably, either the suit or having to repay lost wages could push him into personal bankruptcy.

Uhm, wasn't he supposed to have a personal fortune of around $90 millions, according to this same article? Sure he gave $5 million + to employees...but that was it. What happened to the rest? Now he can't pay 1.5 million, or repay bank debts?

The fuck? Has he stashed his cash in switzerland or cayman islands?

Also, they guy sounds like he is living in a fantasy world. He wanted to be Bill Gates rich? He already has (had?) 90 million bucks...seriously, how greedy can you get? And the tale of him wanting to be that rich to donate money to autism sounds suspect to me, for some reason. Why 200 million? Why that exact figure? Oh and how the fuck did he think he could compete with Gates with a fucking MMO? Gates got his mooolah from Widows and Office, both of which are in EVERY SINGLE PC in the ENTIRE WORLD. I am talking hundreds of millions of ppl, if not a Billion plus. To compare, WoW, the most successful MMO to date has 10 million subscribers. Sure, they pay money every month, but a new windows or a new office is released every couple of years too...

Lastly, there was no real mention of Amalur. Where did the money to do that come from? How much did it cost?

 

[Roguey]

Lastly, there was no real mention of Amalur. Where did the money to do that come from? How much did it cost?

Look at the article I posted earlier, it cost $30 million, with EA advancing them $28.7 million of that number.

 

[Curious_Tongue]

That's what really got me. They could have chosen from the best film and television writers for that kind of money (and they'd still be paying them way more than their usual fee, so that would factor in the extra hours game writnig requires). Those guys are 'working writers' - they're USED to writing on contract, and they do it a fuckload better than your pulp franchise hacks. At $3 million, they could have got the kind of writer who writes lead on Mad Men, Breaking Bad etc. Different genre, sure, but that kind of flexibility is part of being a working film/tv writer.

To have that kind of cash to throw at a writer (on TOP of the usual writing team to implement all the minor quests and NPCs) and then throw it at a franchise hack is fucking unbelievable.

Have any of those film and television writers had any experience in creating a fleshed out fantasy world? He wanted to create an open world RPG, where the goal is to have the world created and let the player make his/her own story. It's one thing to create a characters and scenarios they face in contemporary or historical settings, like those in Breaking Bad and Mad Men, it's another to create a world from scratch.

Look at Star Trek, they used have people write things into an episode for storytelling purposes which sometimes used to fuck with the lore and piss of those invested in the Star Trek universe. Schilling may have wanted a writer who could create the lore first, and he obviously though Salvatore could do it.

 

[waywardOne]

Schilling may have wanted a writer who could create the lore first, and he obviously though Salvatore could do it.

The point is that Schilling is in no position to judge quality world-building. That he thinks Salvatore was capable proves it.

 

[waywardOne]

A good read. Every time my cynicism is proven correct, I have to indulge my hedonism.

38 Studios: Curt Schilling's Crony Capitalism Debacle
The 2012 bankruptcy of Rhode Island-based video-game developer 38 Studios isn't just a sad tale of a start-up tech company falling victim to the vagaries of a rough economy. It is a completely predictable story of crony capitalism, featuring star-struck legislators and the hubris of a larger-than-life athlete completely unprepared to compete in business.

 

[Metro]

It'll be interesting to see how much they can recoup selling off the Amalur IP. My guess is... not very much considering it basically has no future and the game routinely sells for $15 or less in most digital retailer sales. Apparently they got under a million after they auctioned off the physical assets.