Baron_Calamity
Member
I feel really bad for those employees. This is one of the worse cases of employee screw over ever.
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Curt Schilling's '38 Studios' lays off entire staff, Big Huge Games to be closed
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AgentOtaku
Member
fuck this industry
>=(
>=(
Doc Holliday
SPOILER: Columbus finds America
This! There are only a handful of places that I would consider to be layoff safe. So fucking unstable.
Ninja Scooter
Member
What did the industry have to do with it? Poor management is going to sink any business in any industry.
outunderthestars
Banned
The industry made them spend 6 years building a game while having no current revenue stream?
True, but there does seem to be a higher percentage of naive management in the games industry.
Biggest mistake I see is people seem to build there business model on the probability 90 sales or revenue model. (The top 10 of 100 projects like this will earn this amount of money; this project will earn more than 90% of similar projects.) To put it simply, chasing Call of Duty money.
No one looks at the p10 case (90 out of 100 similar projects will earn MORE money than this one). If your p10 case kills your company, it is not worthwhile to invest. Sometimes it seems like companies invest in projects that even the p50 (half of projects will earn more, half will earn less) case will kill off the company.
Mature companies and industries look at the entire spectrum of possible outcomes, not just the average outcome or the good outcomes. After all, the p10 case is just as likely to occur as the P50 case or P90 case. Nor do they delude themselves to think they are talented enough to make sure they always hit the P90 case.
Edit. Not to mention that it appears no one ever did any cash flow analysis of the projects for this company. Reckoning probably is profitable, but the company can't survive long enough to collect the payments.
Edit2. Big Huge was actually probably a great investment. An almost complete game at a fire sale price that they rebranded. That was smart management from what little I know. It looks like it was 38 studios where the piss poor management was at.
Star Wars is also a $200 million mismanaged pile of an EPIC single player game that thought it could pass itself off as a monthly fee MMORPG.
Let's take Rift on the other hand. An MMO that started small and has grown and improved with every update. Trion has profited from Rift and is now working on several other MMO projects.
MMOs can be very profitable if run by competent people(sorry BioWare).
Also, considering that 38 Studios owned Big Huge Games and that it was KoA's failing that sent both companies into a death spiral I would say that KoA and Big Huge Games did have something to do with the fall of 38 Studios.
GungHo
Single-handedly caused Exxon-Mobil to sue FOX, start World War 3
Yeah, I'm pretty sure they fucked up people's lives to make a historical reference that would entertain people on video game forums.
After Valve? Whatever it takes to keeping a post office box open long enough for lawyers to file paperwork and then to creditors.
I disagree. If anything, the numbers would suggest the gaming industry did better through the recession than most others.
element
Member
Considering the team on Copernicus was three times the size of KoA suggests the burn rate on that project alone was what brought the company down. If anything KoA kept the studio alive by actually bring revenue into the studio by EA milestone payments during development. The loan/bond from Rhode Island was to support Copernicus, as it stipulates that the money used needs to be used for a product based in Rhode Island, not Maryland.
What numbers? Industry revenue numbers would not be indicative of good management, as that is more an indication of demand.
I haven't seen a games industry breakdown, but I do follow the quarterly reports of individual companies like EA and THQ. During the recession, many other industries got more profitable (through productivity games from trimming employees mostly and cutting back non-core business budgets). From what I have seen of individual companies in the games industry, profits have been falling and losses growing ever since the generation change.
So I would like to see what numbers you are referring to.
element said:
You are definitely correct. Big Huge is a private company so we can't see accurate numbers, but most assuredly Big Huge was acquired at a cut rate price and KoA:R was already significantly developed. Big Huge and KoA:R, selling 1.2 million or a few hundred thousand less, probably was the only thing keeping 38 studios going. KoA:R didn't sink this ship, the massive burn rate of 38 studios did.
HP_Wuvcraft
Banned
Every job ever fires people.
Yet again -- Kingdoms of Amalur had little to do with 38 Studios' demise. This company had a staff of hundreds spending 5-6 years working on a project that generated no revenue, and was AT BEST another year away from being finished. That sent both companies into a death spiral, depleting all their funds.
To blame Kingdoms of Amalur is like saying that Prey killed 3DRealms.
border said:
It depends on how you look it it. Do you want to fondly reminisce about the girl that got away? Or would you rather get the girl, find out she that despite her beauty she is a batshit crazy alcoholic who has been stealing money and valuables from your apartment?
This was going to end badly no matter what. Is it better that the game didn't get finished, or better that it didn't get finish and then crash and burn?
Second-hand rumor going right now is that RI told 38 that if 38 paid the outstanding $1.2 million, RI would give them tax credits for something like $8 million. 38 already had buyers for them, and the plan was to immediately sell those tax credits and use that money to pay payroll and act as a bridge loan until a publishing deal was secured, which they were close to securing.
But apparently after 38 made the payment RI told them no tax credits and the whole thing came crumbling down.
This is obviously 38's view of the events.
But apparently after 38 made the payment RI told them no tax credits and the whole thing came crumbling down.
This is obviously 38's view of the events.
cartoon_soldier
Member
This. You can't expect KoA to make enough money to also fund their MMO
HP_Wuvcraft
Banned
Damn. This is like that one time on The West Wing when they killed Sam's campaign. Those were sad times.
Even if you take them at their word, why did they wait until the 11th hour to try and find a publisher? Clearly they should have seen this shortfall months ago.
I suspect their claim that they were on the verge of finding a publisher is a bit dubious as well. Who in their right mind would have picked this game up and funneled another year's worth of money into it? Rhode Island was dumb enough to give them 50 million dollars, but even with laymen's eyes they could see there was no end in sight for Copernicus (which is why 38 Studios got cut off). If a bunch of government boobs can see that much, what would an auditor from a real publishing house say?
Yes, I'm suspicious of that claim as well. I'm sure THEY thought they were close. Whether the publishers felt the same way is another matter. And even the $8 million would have only kept them up and running another 2 months at most at their current burn rate.
I'm still shocked they didn't attempt to unload BHG. I think they probably could have gotten a decent amount of money for it.
3 mill? How many copies did Dead Space sell? I feel really bad with the constant state of flux these employees must live in, but am still also finding irony in a famous conservative being unable to repay taxpayer funding, maybe Curt can drop in gaf and tell us he shall return and will be fine.
HP_Wuvcraft
Banned
Unloading BHG after taking their game IP? That would have probably caused more bad blood than they would have wanted this early in their life.
NervousXtian
Thought Emoji Movie was good. Take that as you will.
What makes you think they waited? They could have been negotiating for months without us knowing. And RI giving 38 more money was political suicide, the whole "tossing good money at bad" argument. Unless the game was ready to release ASAP, they'd get slaughtered for tossing more money 38S's way.
What the government says is politically motivated, and what a publisher would look at would be financial viability.
Give it a few weeks and I'm sure more real information will come out, but in the end this just looks like another studio that reached a bit too far and didn't plan for all the extra delays and costs when things didn't go according to plan.
It was a project build out of love for the games, not just making money, and it probably should have been more about making a viable product instead of just trying to build that dream.
I feel for those who lost their jobs, but anyone who thinks them shuttering a few months ago when they knew things were going bad would have left people less pissed off are being a bit naive.
SolidSnakex
Member
The original sold 1.4m in 7 months. DS2 apparently sold around 2m in a week.
Zero-Crescent
Member
While it is true that 38 was seeking a Rhode Island Film production tax credit, WPRI pointed out earlier that it was unlikely that they would receive the credit, since it requires that the company be incorporated in Rhode Island. 38 registered as an out-of-state LLC incorporated in Delaware, when in fact they should have created a subsidiary that is incorporated in Rhode Island to be eligible for the tax credit.
Also true. As I said, that was 38's view. My personal guess? RI agreed to look into tax credits upon payment, but definitely did not agree. However, 38 was desperate and looking at anything as a life preserver interpreted that as a sign that they would definitely get them.
38 may have also felt that, if pushed, RI would give the tax credits to the company as the company surviving would benefit RI more than the company failing.
Damn, so it woulda had to do double Dead Space, or combined Dead Space 1+2 sales, really puts in prespective how unrealistic, if the 3 million number is accurate.
38 Studios has been working on the same game since 2006, without a publisher. That the failure of the company could somehow hinge on a measly 8 million in tax credits nearly 6 years later is a little ridiculous. Taking that long to find a publisher qualifies more as procrastination than waiting.
I can buy into the idea that Rhode Island has been playing hardball since the loan was politically unpopular. But at the same time, what publisher would have seen Copernicus as financially viable? SWTOR's lukewarm reception has pretty much soured all the big publishers out of the MMO business. If they had actually gotten a publisher a few years ago when people were still willing to risk a lot money on the genre they would be in much better shape.
2 semi-interesting articles, light on content but interesting to hear some additional perspective
Listening in on employees ordering coffee: http://www.joystiq.com/2012/05/25/editorial-38-studios-and-the-dunkin-delusions/
Good re-cap / analysis of existing info: http://networkedblogs.com/y3N6w
Listening in on employees ordering coffee: http://www.joystiq.com/2012/05/25/editorial-38-studios-and-the-dunkin-delusions/
Good re-cap / analysis of existing info: http://networkedblogs.com/y3N6w
Amalur was 38's IP, they just bought BHG and copy pasted Amalur into the RPG they were already making. I can't imagine the BHG people are all that attached, it's not an IP they created or had control over.
BHG is actually a pretty decent studio. They're not the most productive of studios, but both major games they've released have been critical and commercial successes. Not sure why THQ wanted rid of them.
Edit: Since there probably aren't any severance packages, does that mean there are probably aren't any NDAs involved either? Hopefully we can get the full story from the employees.
outlawedprod
Member
http://www.necn.com/05/25/12/Czar-o...ng_newengland.html?blockID=714028&feedID=4206
Saw this on Scott Jennings blog. Czar of Amalur blames governor.
I think the only conclusion that sane readers can come to is that the staff of 38 studios was indoctrinated.
Saw this on Scott Jennings blog. Czar of Amalur blames governor.
I think the only conclusion that sane readers can come to is that the staff of 38 studios was indoctrinated.
Perhaps I don't know the exact details of these tax credits, but a tax credit isn't the government throwing money at you, it's just a reduction of your tax burden when it comes to paying it. If your company can't make payroll, and can't hardly pay the government, how would an $8M tax credit help keep everyone employed now?
Last Hearth
Member
Rhode Island probably did screw them over, then again when you get in bed with the politicians like this you're selling your soul anyway and should expect to be screwed over.
NervousXtian
Thought Emoji Movie was good. Take that as you will.
They had funding in 2006, then in 2010 to last for some time. I don't think they thought that half way into 2012 they wouldn't have a game to release yet.
SWTOR's falling down has very little bearing on things prior to the last what, 3 or 4 months? Also it's still a big market that can make a lot of money, SWTOR's failing is more to do with it being a shitty product than the overall state/health of MMORPG.
I sort of believe the 1mil for 8mil scenario, as it makes no sense what-so-ever to pay the million to just shutter a few weeks later.. they wasted the million that could of paid payroll.
RI made a bad deal, and 38S signed into it. The game would have had to have released already at this point to have been viable.
I seriously don´t get FOH and it´s pull on the mmorpg industry. Bunch of elitist pricks that think they know better.
Because in some fashion that I don't understand, they were planning on selling those tax credits to another company for cash.
How is that even legal?
Last Hearth
Member
Yeah I'm inclined to believe that 1 million for 8 million scenario as well. Basically the employees got screwed over by the politicians, that last 1 million probably could have covered payroll and health insurance that they are now out of, because if 38 knew they would not get the $8 million why would they spend their last million paying the state back, when it gets them nothing?
It's definitely legal.
Were you around during early eq days? if not, you probably won't get it.
D
Deleted member 17706
Unconfirmed Member
Does anyone know how many employees 38 Studios actually had?
Seems like they would easily be burning over a million per month just with payroll if they actually had 400 people on staff (excluding BHG).
Seems like they would easily be burning over a million per month just with payroll if they actually had 400 people on staff (excluding BHG).
We already know their monthly burn rate was $4 million.
Yes, that was the kiss of death. Not the people in charge of these clusterfucks.
Winnie the Pimp
Member
damn shame hmm
i was gonna buy Amalur in a Steam sale too... is it safe to wait for that or will they pull it from the store eventually (or maybe not but it won't ever go on sale now?)
i was gonna buy Amalur in a Steam sale too... is it safe to wait for that or will they pull it from the store eventually (or maybe not but it won't ever go on sale now?)
Criminal Upper
Banned
Can't wait for sad stories like this to happen every other month once next-gen starts.
Probably last as long as 38 still exists. Which may be a while, as their next loan payment isn't due until November.