38 Studios Specter Haunts Rhode Island

38 Studios Specter Haunts Rhode Island

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Governor Lincoln Chafee says the 38 Studios debacle "remains an economic development crisis" for the state.

It's been almost four months since Kingdoms of Amalur: Reckoning developer 38 Studios declared bankruptcy, but Rhode Island is still struggling with the fallout. Governor Lincoln Chafee is now considering a plan to restructure the state's economic development system, which currently falls under the aegis of the Rhode Island Economic Development Corporation, and to create a new agency "to oversee broader economic policy and development."

Unfortunately for the EDC, it approved a $75 million loan guarantee to Curt Schilling's startup, for which the state was left on the hook when the studio went under. For the tiny state of Rhode Island, with a population of just over a million people and the second-highest rate of unemployment in the U.S., that's a serious albatross.

"38 Studios was and remains an economic development crisis for the state of Rhode Island," Chafee said in a statement. "I will continue to digest the report over the coming weeks as my administration works to put in place the best structure for sustained and long-term business growth."

Former Governor Donald Carcieri was a big booster of the 38 Studios loan early on, saying in 2010, "I am confident that 38 Studios will serve as a touchstone for growth in the interactive entertainment and digital media industry." Earlier this month he accepted responsibility for it but also suggested that a lack of proper oversight once he left office may have contributed to its failure. Schilling himself has also blamed Chafee, Carcieri's successor, for the company's collapse, but others have pointed the finger at internal "dysfunction" and a lack of effective and experienced leadership as the primary source of trouble.

Source: Reuters

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Well I guess they'll just have to put up the Family Guy theme park ahead of schedule.

Well Mr Chafee, it looks like stupidity got you into that mess, it just remains to be seen if stupidity can get you out again.

Kingdoms of Amalur was pretty awesome, too bad buying more copies doesn't really help anyone.

How does the blame for this fall on Chafee? He was against the deal from the start and by the time he was elected, there was no turning back.

Did the state really recoup none of their investments? I'd assumed that they would have gotten something back after KOA moved 1.35 million or so units. Did that all go towards business and development costs?

Rhode Islander here.

It is rather bad right now. But this isn't Chafee's fault. By all accounts, he did all that he could to stem the tide of bullshit my fellow Rhodies and I are knee-deep in. To be fair, however, our unemployment rate has been staggeringly high for years now, and 38's failure isn't the sole (or even major) cause of it.

axlryder:
Did the state really recoup none of their losses? I'd assumed that they would have gotten something back after the whole debacle.

Not really. 38 blew their expenses. Total asset recovery can't have been over $500k, if that.

Andy Chalk:
How does the blame for this fall on Chafee? He was against the deal from the start and by the time he was elected, there was no turning back.

Schilling's upset that Chafee cut him off instead of supplying him with more taxpayer money that we don't have. You are correct - there was nothing he could really do other than shut down the problem before it got worse.

Dead Raen:
Rhode Islander here.

It is rather bad right now. But this isn't Chafee's fault. By all accounts, he did all that he could to stem the tide of bullshit my fellow Rhodies and I are knee-deep in.

axlryder:
Did the state really recoup none of their losses? I'd assumed that they would have gotten something back after the whole debacle.

Not really. 38 blew their expenses. Total asset recovery can't have been over $500k, if that.

Ah, I was thinking of profit from game sales more than liquidation of physical assets (if that's what you were referring to), but considering how many people they employed I can see how that money might have been spoken for before they even got it.

axlryder:
Ah, I was thinking of profit from game sales more than liquidation of physical assets (if that's what you were referring to), but considering how many people they employed I can see how that money might have been spoken for before they even got it.

Honestly I don't know where all the money went, but I'm sure after the workers (I think there were 80-90?) got their last paychecks and physical assets were liquidated, the rest of the money, such as from game sales, would go into EA's pocket. I think that, because RI technically owns 38, we'd be getting 38's cut from EA, but even if we do - it's a single, unpopular game. We're not going to get much.

Dead Raen:

axlryder:
Ah, I was thinking of profit from game sales more than liquidation of physical assets (if that's what you were referring to), but considering how many people they employed I can see how that money might have been spoken for before they even got it.

Honestly I don't know where all the money went, but I'm sure after the workers (I think there were 80-90?) got their last paychecks and physical assets were liquidated, the rest of the money, such as from game sales, would go into EA's pocket. I think that, because RI technically owns 38, we'd be getting 38's cut from EA, but even if we do - it's a single, unpopular game. We're not going to get much.

To be fair, it wasn't that unpopular. It moved 1.35 or so million copies. But yeah, I see where you're coming from. I doubt the company had any idea how to probably manage costs and ended up extending themselves way beyond their means, leaving very little left over for either EA or RI.

Andy Chalk:
How does the blame for this fall on Chafee? He was against the deal from the start and by the time he was elected, there was no turning back.

I don't blame Chafee for 38 Studio's meltdown, but I do think he antagonized them when he could have been helping them land softly. It wouldn't have prevented a mess, but it could have reduced it.

Hungry Donner:

Andy Chalk:
How does the blame for this fall on Chafee? He was against the deal from the start and by the time he was elected, there was no turning back.

I don't blame Chafee for 38 Studio's meltdown, but I do think he antagonized them when he could have been helping them land softly. It wouldn't have prevented a mess, but it could have reduced it.

The only people he could have reduced the blow to would be schilling and 38 studios. To do so he would have had to make it even worse for Rhode Islanders.

75 million dollars?
Gone?

Wow... I wonder what they spent it all on.

Andy Chalk:
How does the blame for this fall on Chafee? He was against the deal from the start and by the time he was elected, there was no turning back.

Well, there was Schilling's claim that Chafee actively sabotaged the studio's ability to court investors, by publicly announcing the studio's financial trouble as quickly as he could.

Starke:
Well, there was Schilling's claim that Chafee actively sabotaged the studio's ability to court investors, by publicly announcing the studio's financial trouble as quickly as he could.

I think it's been fairly well documented that 38 Studios was in trouble long before Chafee revealed it to the world. The reports I've read indicate that by the time Chafee was sounding the alarm, things were already in dire shape.

lancar:
75 million dollars?
Gone?

Wow... I wonder what they spent it all on.

Cocaine and beef jerky. What else is there?

Andy Chalk:

Starke:
Well, there was Schilling's claim that Chafee actively sabotaged the studio's ability to court investors, by publicly announcing the studio's financial trouble as quickly as he could.

I think it's been fairly well documented that 38 Studios was in trouble long before Chafee revealed it to the world. The reports I've read indicate that by the time Chafee was sounding the alarm, things were already in dire shape.

Yeah, hence the phrase "Schilling's claim". As I recall, there for a while he was trying to lay the blame of the entire debacle at Chafee's feet, (legitimately (or more likely) otherwise).

axlryder:

Dead Raen:

axlryder:
Ah, I was thinking of profit from game sales more than liquidation of physical assets (if that's what you were referring to), but considering how many people they employed I can see how that money might have been spoken for before they even got it.

Honestly I don't know where all the money went, but I'm sure after the workers (I think there were 80-90?) got their last paychecks and physical assets were liquidated, the rest of the money, such as from game sales, would go into EA's pocket. I think that, because RI technically owns 38, we'd be getting 38's cut from EA, but even if we do - it's a single, unpopular game. We're not going to get much.

To be fair, it wasn't that unpopular. It moved 1.35 or so million copies. But yeah, I see where you're coming from. I doubt the company had any idea how to probably manage costs and ended up extending themselves way beyond their means, leaving very little left over for either EA or RI.

Problems of managing costs aside, most of the money went towards the MMO they were working on. So essentially it was a blackhole in a situation where they couldn't afford it. So yeah in hindsight it's fairly easy to see that something was gonna go badly somewhere along the line. A shame as I rather enjoyed KoA.

lancar:
75 million dollars?
Gone?

Wow... I wonder what they spent it all on.

Bananas... really big ones.

I suddenly recall the bell curve of the age groups on this forum, which means that maybe two other people will get my reference. So this is for you:

"...well, we still don't have a chief executive! Sargent at arms: Send in the 436th man in line to be President of the United States."

---

I didn't notice this article until now. This is sad, because I actually liked Reckoning. It was one of the only three games I've ever bought brand new. I've logged probably 500 hours among all of my characters.

I choose to blame Curt Schilling. The game wasn't that unpopular, I just think he messed up the profits somehow. And I think it wouldn't have done even as badly if they didn't have R. A. Salvatore as the head writer. Listen, call me a lout if you like, but it's hard to care about a fantasy that strays too far from that which we can imagine.

I think it would've worked better if the main character was sucked into that world from ours, Erfworld style. Then we could've learned the basics at the same time as our character.

Anyway, I got off topic... who was in charge of the money? It was that guy's fault.

 

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