Ninja Scooter
Member
Maybe he could have borrowed $1.5 million dollars to hire RA Salvatore to write the sign for him.
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Curt Schilling's "38 Studios" in trouble, skips payroll, bounces check to RI
- Thread starter jbug617
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Maybe he could have borrowed $1.5 million dollars to hire RA Salvatore to write the sign for him.
Except that they can't downsize because of their loan agreement with Rhode Island. They're required to have a minimum employee count - with a minimum average salary for the employees - or they face penalties. It's why they expanded so fast.
Now, that agreement could be renegotiated, but if it's done so, RI will lose money on the deal even if 38 survives and pays it all back.
Im sure that that agreement and all its requirements would go out the window once they default and the state takes ownership.
At that point, the company no longer exists. The state doesn't have any rights to the company, just the IP. Which would, as you said, go to auction most likely.
It just looks like this thing is on a bullet train to insolvency and unless they can carve that studio out and sell it within the next week or two, I dont see anyway Big Huge survives unscathed.
June 2013? There is no way they can last that long if they are already completely broke. I would think that finding an investor to hop on your sinking/sunken ship would be almost impossible.
Why would an investor join up if they already know that when (not if) you default, that the intellectual rights go to the state of Rhode Island. Its not like you can put $20 million in and still end up with even the ability to sell the game or engine to anyone else.
Why would an investor join up if they already know that when (not if) you default, that the intellectual rights go to the state of Rhode Island. Its not like you can put $20 million in and still end up with even the ability to sell the game or engine to anyone else.
NervousXtian
Thought Emoji Movie was good. Take that as you will.
I'm pretty sure any other outside investor would negotiate directly with the State to work if things went south.
i've been talking to my friend up at 38 studios this morning
he said all the employees there had no idea anything was happening and basically found out the same time we did
and they're all still at work, and have no idea what's going on.
you'd think curt would fucking talk to his own employees
if i were them i'd riot
he said all the employees there had no idea anything was happening and basically found out the same time we did
and they're all still at work, and have no idea what's going on.
you'd think curt would fucking talk to his own employees
if i were them i'd riot
Which would make me steer clear if I had to work out a deal with the state. I really think it would be hard for them to find enough funding to last 12-13 months.
U n i o n 0015
Member
Sounds pretty typical of companies in this type of situation. All the execs act like "Baghdad Bob."
Companies tend to not want to disclose bad news to employees until they absolutely have to. Otherwise they know that people will start jumping ship (which is inevitable at 38 at this point).
Jive Turkey
Unconfirmed Member
Coming from a rather large family of educators I can safely say you have no fucking clue what you're talking about. My dad would spend roughly $500 a year of his own money just so his students would have school supplies. It's scary to think there are people out there dumb enough to think that many public schools aren't critically underfunded.
HP_Wuvcraft
Banned
That's.... outstanding.
EDIT: How can he talk to his employees when he is too busy talking to the internet?
Sorry but this is complete BS. This is not true at all.
Back on topic. This situation just seems to be getting worse. I can only imagine what those still expected to work are going through at the moment.
Exactly.
My medium to small sized district lost over $13 million dollars in funding just this year alone due to state budget issues. We have 9 total schools, so each school lost over $1 million dollars. You take any business that already doesnt generate income and take away $1 million dollars.
And this is a business where regular people wake up every day, dress their kids and send them to school expecting them to receive a quality education, for apparently zero dollars.
They had no idea the company cant make payroll? Ouch.
http://www.joystiq.com/2012/05/18/38-studios-successfully-pays-1-125-million-to-rhode-island/
Can someone tell me why people believe that they're actually completely screwed? Yes, they missed a payment, but they have since corrected that mistake, and they've only used 49 of the 75 million from the loan.
Can someone tell me why people believe that they're actually completely screwed? Yes, they missed a payment, but they have since corrected that mistake, and they've only used 49 of the 75 million from the loan.
Baconsammy
Banned
All contractors and temps let go, all the money being sunk into an MMO. Skaroooooood.
They couldn't play their employees this week.
HP_Wuvcraft
Banned
Oh, they played them alright.
It sounds like someone made an accounting error along the way, and they mistakenly overreached. Hence the initial lack of payment, and the employee payroll problems. They still HAVE 26 million, in money that they should receive from a loan, and they have since followed through on the payment to Rhode Island. As long as their employees get paid soon, it shouldn't be too big of a concern. I've had payroll mistakes occur to me as well; such as them not correctly clocking my hours, blah blah blah etc. It happens. It shouldn't happen to a company of this scale, butttt... Yeah.
When this company finally collapses and investigations are launched by RI officials preening for local news cameras, the thing I will be most interested to learn is how much cash was drained by hacks like Salvatore and McFarlane. The more "creative partners" Schilling announced, the more 38 seemed like some kind of artistic black hole.
Let's see:
- Making a game in a genre that is over-saturated
- Previous game did alright, but nothing spectacular
- Defaulting on a government loan for 17 days
- Withdrawing from E3 this year because they've missed goal dates
- Failing to be able to make payroll payments this week, with indications that they will also be unable to pay the next payroll
- Giving a bad check to Rhode Island
- Laying off all contractors and temp employees
- Being unable to rely on layoffs to ease financial burden due to loan agreements
- Independent audit from June of 2011 cites substantial doubt that the company would be able to remain solvent
They mistakenly overreached on paying a loan payment that was already 15 days overdue?
HP_Wuvcraft
Banned
Well, shit. There goes one of my Bingo squares.
I don't believe that's public. But I believe it may be related to milestones.
Zero-Crescent
Member
They didn't spend all of it because most of the remainder was specifically set aside for making bond payments, and that's likely what they used to pay for it now. The state could change the deal to allow the company to dip into that fund, but that wouldn't be a very wise move unless the MMO is ready to launch this year.
http://blogs.wpri.com/2012/05/15/ri-taxpayers-actually-on-the-hook-for-112-6m-with-38-studios/
-MMORPG genre is... difficult, but I do honestly believe it's possible to crack. WoW is old as FUCK and looks super outdated, and Star Wars really wasn't that hot either. If they can do something different to the MMO market with some good looking art and exciting combat (the combat in Amalur was fantastic, so that bodes well) they stand a chance, IMO.
-Previous game did well, and beat EA's expectations. I don't believe they expected it to be "spectacular"
-Withdrawing from E3? Eh, whatever. They're not the only ones.
-Like I said, Payroll is something that needs to be resolved soon. Give it until Monday or Tuesday.
-Once again, same thing. Bad check could have been a mistake. Payment has been made.
-Contractors and temps is something that could be a real cause for concern, but we still haven't seen the game so we don't know the state about it.
-Yeah, this is also a problem, but this is something that may be able to be negotiated.
-I haven't seen this audit. This is also a problem.
Hrm. Well, hopefully the game is ontrack then isn't it?
I'm not trying to be an apologist, I just think this thread is full of people going ZOMFG when nobody has real numerical facts. The signs there aren't good, but we are suffering from a distinct lack of information. We basically need to wait and see how this plays out.
Ah. I didn't know that the remainder was set aside for bond payments. Huh.
The Rhode Island Governor let slip that they're targeting June 2013, which is an awful long time to go without any real revenue coming in. The vast majority of what they'll make off of Reckoning has likely already come in.
Basically, all signs are that the company will require major outside investment to continue going, and some of us have doubts they'll be able to find that.
I saw that. With that knowledge, I'm surprised that they haven't shown anything yet. Especially as they should be trying to get people hype for the MMO. They need a marketing campaign to kick off asap. With the newfound knowledge that the remaining 26 million is for bond payments... yeah.... :/
Jive Turkey
Unconfirmed Member
If they can hold off for another month and a half they they might be able to get some quick cash from the Steam sale (Amalur was self-published there right?) if properly priced. I doubt that would do much to help them in the long run though.
"The company has told state officials its operating costs are running at more than $4 million a month, according to Chafee. "
It's from the same article everybody's quoting, but I didn't see anybody quote this directly.
4 million a month operating costs + june 2013 release date = 48 million required to finish the MMO, and that's assuming no schedule change!!!
Just thought that needed to get more attention. Where the hell is that money supposed to come from? Even if they could use the remaining 26M for development and are getting royalties, it wouldn't be enough! No wonder they already blew through the 49M.
It's from the same article everybody's quoting, but I didn't see anybody quote this directly.
4 million a month operating costs + june 2013 release date = 48 million required to finish the MMO, and that's assuming no schedule change!!!
Just thought that needed to get more attention. Where the hell is that money supposed to come from? Even if they could use the remaining 26M for development and are getting royalties, it wouldn't be enough! No wonder they already blew through the 49M.
If the combo of the Star Wars license, EA Money and Bioware development couldnt make a significant dent in the MMO market for more than 2 months, there is no way in hell that this game is doing it.
ActStriker
Member
megamerican
Member
This is so hard to watch.
When the best case scenario is them scraping by long enough to release an MMO that will inevitably collapse and go F2P, it's pretty fucked.
KOA was good, and has the potential to be great. It also sold really well for a new IP this late in the generation with relatively little marketing. I hope we get a sequel.
When the best case scenario is them scraping by long enough to release an MMO that will inevitably collapse and go F2P, it's pretty fucked.
KOA was good, and has the potential to be great. It also sold really well for a new IP this late in the generation with relatively little marketing. I hope we get a sequel.
NervousXtian
Thought Emoji Movie was good. Take that as you will.
diffusionx
Gold Member
Star Wars/EA/Bioware set out to create WoW with lightsabers even though everybody with a brain knew that anyone who wanted to play WoW was playing WoW.
I don't know what 38's MMO was going to be like but I do think there is room for something different. See: all the excitement about Guild Wars 2.
NervousXtian said:
Sunk cost fallacy. The state just wants their money.
Crazymoogle
Member
That's great, but the simple fact of the matter is that they can't start on a new game. 1 year is not enough time to start from scratch. They've built a staff and tech for one reason, and if they can't finish that then there is definitely nothing left for the state.
(They also can't slim down staff due to the terms of the loan.)
It's up to the state to decide whether it's possible to resurrect the company long enough to ship and see some sort of return, or bail out and take the loss, I suppose. But there doesn't seem to be an inbetween.
semiconscious
Gold Member
sounds like 'it'll be different this time' to me...
they should salvage whatever assets they've created for the mmo, & incorporate them into koa:r sequels. the dream is over, & to fly in the face of this is to continue throwing good money after bad...
dave is ok
aztek is ok
Oh Curt Schilling. This is why you should keep your political views to yourself.
Guild wars 2 is hardly different. People are excited because it has no monthly cost. It plays and runs mediocre, worse than TOR.
FieryBalrog
Member
From what little we know of it from Curt's comments on forums and interviews, it's pretty much another heavily WoW-inspired title.
Makes sense too, when you see when all these MMOs began development- they (by which I include TOR, Elder Scrolls Online, Rift and this one) were all started back in 2007 when WoW was still showing meteoric growth, was just entering its mature phase and that seemed to be the perpetual future of the market. These companies started development then, and by the time the games arrived, that ship had already begun sailing.
It depends on the school district, and many schools spend a shit-ton of money in inefficient and wasteful ways (teachers union negotiated salary systems, administrative red tape, textbooks), or on unnecessary things (hugely expensive sports spending on the top of the list, obviously).
There are of course districts which are woefully underfunded too, but the amount of money the government wastes on education is criminal.
HP_Wuvcraft
Banned
The studio is losing money and going under. It's really that simple.
There's nothing deeper than that just because they made your favorite game.
SquiddyCracker
Banned
Turbine is recruiting next week in (where else?) Rhode Island
Looks like Turbine is intent on snagging some 38 Studios employees
Looks like Turbine is intent on snagging some 38 Studios employees
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