Saw this on another forum –http://www.history.com/this-day-in-history/copernicus-dies … yeah.
LOL! That’s gotta mean something. End of the world or some such.
For an RPG from a brand new studio set in a brand new world, Amalur sold tremendously well. The problem is that 38 was playing an entirely different sport and their home run barely made it past the second baseman.
I should have said that Amalur sold decently, but not spectacularly.
You’re right – they needed Amalur to be a grand slam home run to keep the company alive, and instead they got a respectable double.
I’m not sure that that’s entirely true.
For over a decade, he’s been involved with Multi-Man Publishing, a company which publishes traditional (i.e., paper) wargames, particularly Advanced Squad Leader (which they license from Avalon Hill / Hasbro). Schilling is (or, at least, was) an avid ASL player. That said, I’m not sure how actively involved he is (or ever has been) in day-to-day management of the company, and it’s far, far smaller than 38 Studios.
I remember hearing about his involvement in ASL now that you mention it, I always got the impression he was just a super-hobbyist who was selling some stuff on the side. MMP looks like a very small venture, small enough that probably a regular Joe could run something like that if they felt the need. I guess it is a type of business experience, but I’m not sure it’s very relevant to what Schilling was trying to do with 38 Studios.
Incidentally, updated sales figures I’ve seen from Ars Technica indicate Amalur sold 1.3m copies. How many new studios that sell over 1m copies of their first game go under like this? I imagine most don’t, I imagine a lot at least make it to a second release and/or get bought up by larger companies at that point. The problem is the way Schilling decided to expand the company was disastrous. It really looks to me that accepting that loan was essentially a death sentence for 38 Studios. I genuinely don’t know why they did it, I can only guess Schilling saw it as a way to get a big capital infusion and he was so certain he’d be able to rebrand an RPG already being developed by BHG with his game’s universe and make enough to make the loan payments (and recoup the cost of buying BHG) and keep growing that he saw it as win/win.
The way I see that loan was a clusterfuck stupid mistake. It was stupid to accept (it forced expansion in that it required 38 Studios to hire more staff to comply with the terms and created a strict requirement for revenue to meet loan payments) and it was colossally stupid for Rhode Island to issue.
Most State governments have outfits that provide sort of public venture capital financing, and for a state the size of Rhode Island $115m (which is what their total projected loss from this is going to be) is huge. I know of similar sized states whose entire fund for development entrepreneurship projects like this is $25-30m. The whole budget for the state of Rhode Island is only around $7.8bn this fiasco is going to cost around 1.4% of that. They have major State scholarship initiatives that cost less than this thing. It’s truly horrific that Rhode Island’s citizens are going to have to pay such a heavy cost for such stupid, stupid decisions by their elected officials.
This fact makes the failure of the company even more damning.
[ul]
[li]They knew their monthly burn rate.[/li][li]They knew they weren’t going to ship another title until 2013.[/li][li]They had a revenue stream which exceeded projections.[/li][/ul]
I’ve been assuming that Amalur’s poor sales dragged them down. But if Amalur sold **better **than they were expecting, then how in the hell were they planning to fund the company until the MMO shipped in 2013? Five minutes with a spreadsheet should have told them that they were going to hit the wall. It should have been obvious that they were in dire straits last fall, long before Amalur shipped. A responsible studio owner would have been looking for a way to structure a soft landing. Instead Schilling and his management team appear to have closed their eyes, stuck their fingers in their ears, and prayed for a miracle right up to the moment when the whole operation slammed nose-first into the ground.
Many of my friends and past coworkers have been hit hard by this fiasco. I can think of at least five people who left my current studio to go work for 38. Heck, even the recruiter who got me this job quit hers to go work for Schilling! I had even thought about doing it- 38 Studios was my fallback job. I’m glad it didn’t come to that.
And the hits just keep on coming. Apparently, employees who were moved to Rhode Island from Massachusetts were assured by 38 that their home mortgages would be assumed by the company so they wouldn’t have to deal with selling their homes… but it looks like 38 hasn’t been paying on those mortgages or even communicating with the banks.
The more I read about this situation, the angrier I get. I’m glad that my studio, at least, seems to be run ethically.
Studio 38 filed for bankruptcy today-and owes over $280 million!
How did they blow such a pile of cash?
Skip left the starter in too long. Shoulda brought that left-handed phenom in to pitch the ninth.
Slight bit of thread resuscitation here, but I thought this was a really interesting read on the decisions and fate of 38 studios:
Thanks, Airk. It’s a really nice summary.
There’s also a new bit up on Gamasutra from a 38 Studios spouse about how badly the company screwed her family. They relocated to Rhode Island from the west coast in December 2011 and are still on the hook for moving expenses that the company had promised to pay.
Humorously, I found the link the article I posted in the comments of the article you posted. 
I thought the spouse piece was interesting from a “Jeez, way to F-over your employees, 38 studios!” perspective, but from a WTF actually happened and why did things go this bad perspective, the other article was more interesting.
Schilling says he has lost $50 million and might be broke, although I imagine it’s hard to really say what his financial status is at this point. I never liked the guy, but jeez.
I’m willing to bet that his version of “broke” is a bit different from the “broke” that his ex-employees are now experiencing.
I doubt he’s truly “broke” since he has a six-figure job at ESPN awaiting him whenever he wants to go back.
I know a few people who have lost their jobs with the 38 studios thing and I don’t really feel bad for them nor do they. Many of 38 studios employees knew it was doomed to fail from their first job offer. 38 was hiring people at a much higher pay rate then one would expect. The logic the people I know that took the jobs was ‘Well they are offering 1.5 times my current salary for me to join them, hell even if they only survive a few years it’s a ship worth boarding.’ Now it’s sunk and I’m sure there are a few people that lacked the foresight to bring a life preserver but those people weren’t smart enough to notice the lack of lifeboats either. It does suck now because the economy has tanked so many would have been better off with a more stable job rather then trying to find one now but that was part of the gamble.
As a MA citizen I’m so glad we didn’t agree to any deals with Schilling. He basically said give me a sweetheart deal because I’m Curt Schilling or I’ll move. There was certainly pressure from fanboys to give him an offer but smarter people prevailed. Instead RI said we’ll do it. All yours RI hows that working out for you.
Oh, yeah, it’s a tough life, only being given $75 million or whatever of taxpayer money to run your little this-is-my hobby company, completely mismanaging it, and then having the taxpayers have the unmitigated gall not to bail you out. And imagine the shame and emotional pain the poor guy is going through, considering the number of people mocking him for being such a pro-capitalist anti-government-handouts cheerleader before failing at capitalism even with huge government handouts. Not to mention how wretched and self-betraying he must feel when he complains the government didn’t do enough to help him, considering his former anti-government bluster. Must sting a lot I’m sure. Nearly as much as blaming the Governor of RI for not working closely enough with a potential investor, when there are tons of stories out there about how many venture capitalists walked away from Schilling because he had too many conditions for their investment.
And ohh, yes, losing $50 million that you got paid for PLAYING A BALL GAME! That really makes my heart bleed for you, yes it does.
Now, the taxpayers of Rhode Island, them I feel sorry for.
The wikipedia entry for the Studio 38 game Kingdoms Of Amalur: Reckoning has this about Kurt Schilling the game’s inability to recoup costs:
Wonder how long that will last before an edit?