Entire 38 Studios Staff Laid Off, Effective Immediately

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IamLEAM1983:
...

At the same time, I'm not really sure hubris is to blame. Hi-Rez Studios managed to stay afloat with Global Agenda and has recently launched Tribes: Ascend. Granted, it's free-to-play, but some developers have been able to dip their toe into the MMO market from Day One and to survive the experience.

My guess is part of the problem really was Amalur's base concept. Yet another Fantasy game in a market that's already saturated with elves and gnomes and goblins.

Some of the most profitable new games today are free to play. I call them free to pay b/c there are certainly a lot of ways to spend money in most F2P games.

matrix3509:

Crono1973:

Must be my hatred for pointless "in before" posts talking.

...and they are pointless. Do you think anyone thinks you're clever by predicting what others will post?

I couldn't give two fat flying fluffs what anyone else thinks. What, did an "in before" post murder your parents or something? Give it a fluffing rest.

Woah man, drop enough F bombs?

Caffiene:
Wha...?

Basically "To avoid the possibility of retrenchment, youre all fired."

Maybe this is a local language thing, but around here I wouldnt call that "avoiding" the possibility of retrenchment... more like "ensuring". Does "retrenched" not equal "fired" over there in USAland?

Nope, in Australia you would know it as being made redundant, which carries with it a lot of other entitlments and obligations. Being fired you just get paid your notice and that's it. By firing the staff they have saved a lot of extra money on entitlements that the would have otherwise have owed. So they are getting screwed twice.

That's how it would work here in Oz anyway. But then again we have a decent living minimum wage among other things so it could be different in the US

Huh.. Maybe now they'll reduce the price of KoA. If it drops down to $10, I'll probably pick up a copy.

SeatedSkeleton:
Nope, in Australia you would know it as being made redundant, which carries with it a lot of other entitlments and obligations.

Ah. That makes sense.

Or the explanation does, at least. Doesnt make so much sense that you can screw people over like that.

SeatedSkeleton:

Caffiene:
Wha...?

Basically "To avoid the possibility of retrenchment, youre all fired."

Maybe this is a local language thing, but around here I wouldnt call that "avoiding" the possibility of retrenchment... more like "ensuring". Does "retrenched" not equal "fired" over there in USAland?

Nope, in Australia you would know it as being made redundant, which carries with it a lot of other entitlments and obligations. Being fired you just get paid your notice and that's it. By firing the staff they have saved a lot of extra money on entitlements that the would have otherwise have owed. So they are getting screwed twice.

That's how it would work here in Oz anyway. But then again we have a decent living minimum wage among other things so it could be different in the US

Don't you have to have done something to be fired over here though? I always thought it was illegal to just fire people with no cause, i've had friends that have sued employers and won for that very thing.

I'm glad they got to make a great game like Amalur before going.

kajinking:
Well that went downhill fast, Still I guess it was kind of expected considering they were betting on a fantasy game not only being able to compete in a market with WOW and Skyrim but also being able to go full on MMO after only one game. It just seems like they were expecting way too much out of a new IP that didn't have all the much going for it in a very over-crowed market. May as well be trying to bank an entire company on a brand new Modern Military Shooter IP when you got the resident Godzilla and Kingkong Battlefield 3 and COD fighting in the background.

Uhhh...they DID compete. They sold above expectations. Nobody was expecting this to be a WoW or Skyrim killer.

Come on.

Mygaffer:

IamLEAM1983:
...

At the same time, I'm not really sure hubris is to blame. Hi-Rez Studios managed to stay afloat with Global Agenda and has recently launched Tribes: Ascend. Granted, it's free-to-play, but some developers have been able to dip their toe into the MMO market from Day One and to survive the experience.

My guess is part of the problem really was Amalur's base concept. Yet another Fantasy game in a market that's already saturated with elves and gnomes and goblins.

Some of the most profitable new games today are free to play. I call them free to pay b/c there are certainly a lot of ways to spend money in most F2P games.

Yeah but here's another thing, Global Agenda and Tribes are not MMOs. Both of them are just multiplayer shooters. Global Agenda has a hub area where you can fly around and chat to people while buying stuff, and it has a very small open area that functions mostly as tutorial which does work like an MMO. But that ceases to be useful after level 10 or so. After that you just do the same kind of shooter stuff you see in other games, 16 on 16 or less, and 4 player co-op.

Tribes doesn't even have the hub area or tutorial zone, it's just a multiplayer shooter. It's fun, but neither one is anymore an MMO than Call of Duty is, and so have a lot less costs associated I'm assuming.

Zachary Amaranth:

kajinking:
Well that went downhill fast, Still I guess it was kind of expected considering they were betting on a fantasy game not only being able to compete in a market with WOW and Skyrim but also being able to go full on MMO after only one game. It just seems like they were expecting way too much out of a new IP that didn't have all the much going for it in a very over-crowed market. May as well be trying to bank an entire company on a brand new Modern Military Shooter IP when you got the resident Godzilla and Kingkong Battlefield 3 and COD fighting in the background.

Uhhh...they DID compete. They sold above expectations. Nobody was expecting this to be a WoW or Skyrim killer.

Come on.

Except, apparently, them.

My heart goes out to those workers. Hopefully they'll find employment in other studios or will have the resources to make their own studio.

That blows, but from the amount of support being provided by the numerous companies, it sounds like most of the employees will be able to land on their feet. So there's that, at least.

That's a real shame~ I loved KoA, I haven't finished it yet, but that's the ADD talking and not the quality of the game. In fact I have both KoA and Skyrim and I enjoyed KoA a million times more than Skyrim. KoA is bright, colorful has interesting quests and creatures in it, and Skyrim well, imo it looks terrible~ The color pallet is as gray/brown as so many other games now, and I know the game world is probably bigger than KoA but I'm really not looking forward to having to trudge through a million identical snowy field/mountains to get there. Also FPSword has always been imo been a shitty idea. Yes you can go to third person if you want but then your character slides around the world all weird like.

Anyway long story short I'm really sad they've gone out of business~ They made a great game, and everyone turned their nose up at it, and didn't give it a chance.
I hope the employee get work in other studio, they obviously have talent in game making so I think they'll bring something great to whatever team they join in he future~

EDIT: Been reading some of the other comments and am surprised at the amount of 'oh maybe it'll go down in price now and I'll buy a copy' Well it's to fucking late now guys! If you were interested in the game you should have bought a copy when it first came out, that would have actually helped the studio stay together! Buying a copy now, though you should do it anyway cause it is an awesome game that you should play, cause the price might go down is just augh! The reason so many game studios are struggling is because people don't buy games when they're released anymore, they wait until it gets to a point where from the studio's financial point of view it doesn't matter anymore.

gyroscopeboy:

SeatedSkeleton:

Caffiene:
Wha...?

Basically "To avoid the possibility of retrenchment, youre all fired."

Maybe this is a local language thing, but around here I wouldnt call that "avoiding" the possibility of retrenchment... more like "ensuring". Does "retrenched" not equal "fired" over there in USAland?

Nope, in Australia you would know it as being made redundant, which carries with it a lot of other entitlments and obligations. Being fired you just get paid your notice and that's it. By firing the staff they have saved a lot of extra money on entitlements that the would have otherwise have owed. So they are getting screwed twice.

That's how it would work here in Oz anyway. But then again we have a decent living minimum wage among other things so it could be different in the US

Don't you have to have done something to be fired over here though? I always thought it was illegal to just fire people with no cause, i've had friends that have sued employers and won for that very thing.

yep, you're right. prob gave the wrong impression there. in Oz the employees would have almost certainly been made redundant in this situation. i was just talking in the context of the US, presumably the US system is a lot less fair for employees.

OT: it is sad. i thought KoA was pretty good ignoring some flaws. Was looking forward to a bunch of improvements the 'inevitable' sequal.

I need to ask my sister about this. I'm pretty sure she knows one of these guys and EA used underhanded business tactics to cheat everyone out of money. I'll edit in the answer in a bit...
Edit: Ok she's not answering. Ignore this post.

The interesting thing is that some people already sort of knew this was going to happen...

http://youtu.be/KQRxxd74yCk

:P

Caffiene:
Wha...?

Basically "To avoid the possibility of retrenchment, youre all fired."

Maybe this is a local language thing, but around here I wouldnt call that "avoiding" the possibility of retrenchment... more like "ensuring". Does "retrenched" not equal "fired" over there in USAland?

The company still exists, in as much as the people who weren't doing actual work got to keep all the money they would have lost actually paying employees who did a good job by firing them as soon as they get the game out. This is actually more or less common, just not for such a big game.

Rrk... Y'know, I'm usually sorry when something like this happens- I don't like to see people lose their jobs, I've generally heard that Amalur was not at all a bad first effort, the industry is rarely stronger for losing companies that are putting some effort into creative contributions to the medium, and all that.

But I have to confess that part of me is going, "You know, I think if you gave me $75 million I could come up with more than a single game and a trailer (for what will probably now be vaporware) before going under." I may be "armchair quarterbacking", but jeez. It seems like it ought to be possible to keep a modest-sized programming pool in Coke and ramen (so to speak) with the interest on $75 million.

1.2 million and now they have to close the doors to the studio? How much did that game cost to make anyway?

If Final Fantasy 13-2 can sell 500'000 copies in japan and still make back a decent chunk of profit (more from the extra 400'000 JP copies sold and the overseas release) how can KoA not? 3million copies was more than a new IP could handle (L.A. Noire is an exception due to the HUGE marketing campaign and not even that made back much profit)

Hell, Capcom thinks Dragons Dogma will 100% sell 10million copies (the crash and burn will be horrible)

Crono1973:

matrix3509:

Crono1973:

You are the only one, doesn't that make you feel stupid?

I said "In before". Before you start throwing insults around, I suggest you learn how to read.

Must be my hatred for pointless "in before" posts talking.

...and they are pointless. Do you think anyone thinks you're clever by predicting what others will post?

Actually failing to predict what others post :) Most are lamenting how such a great game could have been deemed a failure.

Crono1973:

Blade_125:

Crono1973:
Well, this will sound mean but we didn't need another damn MMO and maybe this will be a lesson to other start ups trying to enter the market with an MMO. Maybe it will be a lesson to established companies too, most MMO's don't make it and the overhead is high. Hope all the employees find another, more stable company soon.

Also, why is KoA still at $60? This should be seeing a price cut soon and then I will buy it.

Look for sales. I bought my copy about a month ago for $40. Also Steam and gamespot had sales at $40 even before that (I got mine for the PS3).

Considering the game is not likely to get any more patches (which I have read that it needs one for balance issues), it is no longer worth $40.

I won't disagree with that (although I've only found one real bug in the game so far).

I will also bet it will drop in price again pretty soon.

For the record, games no longer rule the industry, developers no longer decide how games are developed, and consumers are nothing more than wallets to be exploited.

Thank god we have these publishers calling the shots. Heaven forbid the industry doesn't collapse again.

gyroscopeboy:

Don't you have to have done something to be fired over here though? I always thought it was illegal to just fire people with no cause, i've had friends that have sued employers and won for that very thing.

Nope. For a lot of jobs, an employer can fire an employee for any reason, or no reason. It's called at-will employment. I work in software (though not in the game industry) and that's the way my employment contract works.

However, there's a big tangle of law about this that varies from state to state. It's unlawful to fire someone on the basis of discrimination, which can be tricky to prove or disprove. There are some other exceptions depending on where you live, and where the company is headquartered, etc. As is true with most legal stuff, it's complicated.

Regarding KoA, that sucks. I've played the game through and enjoyed it, though I wouldn't put it on my top-10 list. I thought the combat was nicely done, and it was fun to feel like an acrobatic badass even as a wizard-like character. I'm sure Turbine will pick up some of the ex-employees, and it's heartening to see other tech companies pitch in to support those laid off.

Aiddon:
well, that sucks. It's a pretty bad state for the industry when you can't break even on a game that sells 1.2 mil. Dev costs NEED to go down. It also would have helped if they hadn't sank a lot of money into that MMO.

A few people have been saying stuff luck this but I don't think it's really a reflection of the industry. Maybe I'm wrong but from the outside 38 Studios seemed to have the makings of a big budget dot bomb era web startup. The requirement to sell 3 million games to break even probably had a lot to do with ambitious MMO development before they even got their first game out the door. Now I haven't played KoA, but was this really a game that need a full time staff of almost 400 employees to create? Not to mention having big names on board like RA Salvatore. Seems to me like they thought with some startup money from a baseball player they could skip the baby steps and immediately become the next Bioware.

As for the employees, it's sad they went 3 weeks without pay before getting fired, but someone please tell me at least the CEO's got to bail with their money!

Numerous unaffiliated gaming companies such as PopCap, Cryptic, Gearbox,and EA have already begun to offer their support, immediately considering applicants from affected ex-38 Studios employees.

Well it's great to see support from the other game companies.
And LOOK! EA is offering support!

I bet that upsets a lot of Escapist readers who like to think of EA as the gaming Antichrist.
Imagine that! EA is staffed by human beings who also want to help others and not diabolical rapists, murderers and paedophiles.

[disclosure; While I do not support the general idiocy shown in many of EA's decisions, I do like to keep an open mind and not write them off as inherently evil, as many Escapists tend to do.]

Icehearted:
For the record, games no longer rule the industry, developers no longer decide how games are developed, and consumers are nothing more than wallets to be exploited.

Thank god we have these publishers calling the shots. Heaven forbid the industry doesn't collapse again.

Welcome to capitalism, where people ARE walking wallets (seriously, that's the idea) and products are developed according to demand.

You're not part of the majority demand, get used to it. I have.

Didn't play KoA, but it is sad to see how things can really come crashing down so fast. The impersonal method of laying off the company's employees was also...well that was just pathetic, really.

Man, this really is a sad thing to read first on my day :/ I hope all of them get enough support from other companies

Ouch. Just. Fucking. Ouch.
Kingdom's on Amalur wasn't a great game, but it wasn't a bad game either.
There was no need for this, and I don't forsee any other games coming out of 38 studios, even if they are just worker overhauling.

Captcha: labour of love.
It truly was Captcha, it truly was.

... Ouch. Somewhat predictable, but still... damn.
All the best to those affected, and I hope they find new employment very soon.

Sounds like really poor management.
1.2 million in the first 3 months and still at full price now, so a very conservative estimate would put gross revenue at 40 million, enough for the development of 2 top tier AAA games.

Well dang, all I know about KoA is the review Yahtzee did so I can't speak with any certainty, but if it sold well is this just a case of execs saying 'screw you' and taking all the money? I can't see any other reason that this would have happened with over a million copies sold.
It's nice to see a sense of community in the gaming world though, immediately accepting applications of this unfortunate circumstance, hopefully they all find places that aren't dicks.

doctorjackal777:
That's a real shame~ I loved KoA, I haven't finished it yet, but that's the ADD talking and not the quality of the game. In fact I have both KoA and Skyrim and I enjoyed KoA a million times more than Skyrim. KoA is bright, colorful has interesting quests and creatures in it, and Skyrim well, imo it looks terrible~ The color pallet is as gray/brown as so many other games now, and I know the game world is probably bigger than KoA but I'm really not looking forward to having to trudge through a million identical snowy field/mountains to get there. Also FPSword has always been imo been a shitty idea. Yes you can go to third person if you want but then your character slides around the world all weird like.

Anyway long story short I'm really sad they've gone out of business~ They made a great game, and everyone turned their nose up at it, and didn't give it a chance.
I hope the employee get work in other studio, they obviously have talent in game making so I think they'll bring something great to whatever team they join in he future~

EDIT: Been reading some of the other comments and am surprised at the amount of 'oh maybe it'll go down in price now and I'll buy a copy' Well it's to fucking late now guys! If you were interested in the game you should have bought a copy when it first came out, that would have actually helped the studio stay together! Buying a copy now, though you should do it anyway cause it is an awesome game that you should play, cause the price might go down is just augh! The reason so many game studios are struggling is because people don't buy games when they're released anymore, they wait until it gets to a point where from the studio's financial point of view it doesn't matter anymore.

Not every game is worth $60 (that number going up even more in other countries) and they wasted an absurd amount of money on a horrible business idea in the first place. The Witcher 2 was made with around $10 million and 38 studios just wasted over $70 million. If you are honestly wasting that much money to the point your game has to be that massive a hit just to break even you need to reconsider what you are doing. I didn't buy the game at all because I tried the demo and didn't care for it one bit. I feel sorry for the people who lost their jobs but to say this couldn't have been predicted is beyond inaccurate. They were trying to make an MMO in the first place with no brand recognition whatsoever they would have all lost eventually. Blaming the consumer for not buying a game they didn't want to pay $60 for is just stupid. Not to mention they knew they were dying and still didn't try to do anything. The sales I've seen on KoA are negligible with barely anything off and if they were so desperate to survive they should have put up a massive sale to try getting as much revenue as possible going. However they didn't and now they are gone. They died because of their own problems no one elses.

The Random One:
It is. When a game sells a million copies in a few months and that causes the company to implode in bankrupcy it's a sign the industry is doing something wrong.

No it isn't. It's a sign that this particular company did something wrong. The problem is simply that they spent a certain amount of money making the game, and needed a certain number of sales to make it back. Where they went wrong was in expecting a reasonably competent but utterly generic fantasy game to sell that well. This says absolutely nothing about the industry as a whole (other than it currently being chock full of generic fantasy games). Clearly there are plenty of companies that make games much more cheaply and therefore are successful with far fewer sales, and there are quite a few companies that make more expensive games that sell much better and also make their money back.

38 simply chose a high risk business strategy, and it didn't pay off. If they'd stuck to a smaller scale and lower budget, they wouldn't have needed such high sales, and would have had much less to lose in the event of a failure. But instead they went with a single big budget product and were screwed when it failed to be successful enough. Sure, it sucks for those involved that this has happened. But there are plenty of other companies, both big and small, that haven't made these mistakes and continue to do well. So let's not pretend that the failure of of one business that took a huge risk somehow says anything about the state of the industry as a whole.

This game was destined to fail..it came out with in 6 months of Skyrim. That certainly didn't help it's sales as every fantasy rpg going be compared to it. It seemed like an alright game, but I already had my fill of the fantasy world setting by time it came around and want something else. I'll likely pick it at some point but it's not going be soon enough save any of these people's jobs.

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