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Entire 38 Studios workforce laid off

24 May 2012  by   Peter Parrish
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In what was perhaps an inevitable conclusion to the saga of Curt Schilling’s 38 Studios, its big-budget MMO project and a $75 million USD loan from the state of Rhode Island, multiple sources are reporting that the studio has today laid off every single employee.
A company-wide email sent to an estimated 379 members of staff read as follows:
“The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.
These layoffs are non-voluntary and non-disciplinary.
This is your official notice of lay off, effective today, Thursday, May 24th, 2012.”
Troubles began to emerge last week, when it was revealed that 38 was unable to pay its workforce and seemingly unable to find the funds to make a $1.125 million USD loan repayment to Rhode Island.
That payment was eventually made, but yesterday rumours began to circulate that the employees had not been paid since 1 May and that health insurance benefits were due to run out later this week (a fact not communicated to the staff by management). It was also reported yesterday that CEO Jan MacLean and senior vice president of product development John Blakely had bailed out of the sinking company.
Big Huge Games, the Maryland-based developer owned by 38 Studios (whose RPG Ascendant was re-configured to become Kingdoms of Amular: Reckoning), is also reported to have laid off its entire staff.
38′s financial woes are the result of an expensive MMO project (dubbed ‘Project Copernicus’) which has been in development since 2008 and has so far drained $49 million of the $75 million Rhode Island loan. In terms of details about the game, all we really knew was that it was scheduled for June 2013 (inadvertantly revealed by Lincoln Chafee, the governor of Rhode Island) and based in the Amalur universe.
Last week the studio released a ‘fly-by’ video showing some locations in the game, and today (somewhat ironically) saw the release of a few screenshots which can be seen around this article. Now, the MMO is almost certain to be canned.
The failure of 38 Studios leaves Rhode Island holding a rather expensive taxpayer bill, but may also lead to the state gaining control of the developer’s intellectual property, put up as collateral in the loan deal. That raises the mouthwatering prospect of an MMO set in Rhode Island.
Not everybody suffered in this deal, of course. Curt Schilling reportedly used the taxpayer money to repay himself $4 million USD that he’d invested in the company, and Kingdoms of Amalur contributory writer R.A. Salvatore apparently trousered $5 million in royalties.
In a somewhat heartwarming show of solidarity, other game development companies appear to be doing what they can to accomodate the 38 Studios staff who’ve been laid off.
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Sources: theverge.com, blogs.wpri.com

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