Final Pitch: 38 Studios & Big Huge Games Staffs Laid Off

[DoctorFinger]

The end game appears to be here for beleaguered developer 38 Studios. A day after learning the studio had missed the May 15 payroll and would be cutting off health benefits starting today, the other shoe dropped. Today everyone at both 38 Studios and subsidiary Big Huge Games were told they were being laid off. This happened just hours before a scheduled press conference by Rhode Island governor Lincoln Chafee.

This almost certainly means the studio will default on the remainder of it's $75M loan from the RI Economic Development Council. The state itself will have to cover the debt, which could be as much as $112M after interest. The state will end up with the Amalur IP as well as any work done on the Project Copernicus MMO, but analysts think that would fetch $20M tops at auction.

Source - Joystiq

[shodan2020]

Geez, awful awful news. The loan was a bad idea in the first place, but it really sucks that all these people had to get laid off.

[bean]

That's too bad. The screenshots for Project Copernicus looked quite nice.

[Xerxes]

I hope Big Huge can reform as something new.

[fitbabits]

How much of this is due to mismanagement, I wonder? It's a devastating loss for those affected, and also for RI...

[menage]

Awwwwwwwwwwwwwwwwwww.

Sad news.

[Widgetcraft]

Did they just not have a publisher, or what?

[Xerxes]

Reportedly Reckoning needed to sell 3 million to break even. That seems crazy. 1.2m seller shouldn't be a flop...

— Philip Kollar (@pkollar) May 24, 2012

Uh, wow?

[Widgetcraft]

That did not feel like a game that had that much money put into it...

[DoctorFinger]

Originally Posted by Xerxes

Reportedly Reckoning needed to sell 3 million to break even. That seems crazy. 1.2m seller shouldn't be a flop...
— Philip Kollar (@pkollar) May 24, 2012

Uh, wow?

That's the industry now. Any supposed "AAA" title that sells less than 2-3M is almost certainly a money loser. When EA or Ubisoft puts out a game like that they can eat the loss and hope to make it up on sequels. An independent studio like 38 can't.

[Exodus]

This kind of stuff makes me sad.

[bean]

Originally Posted by DoctorFinger

That's the industry now. Any supposed "AAA" title that sells less than 2-3M is almost certainly a money loser.

This is true for some AAA games, but there are plenty with a $20 million development, marketing, and distribution budget that make a solid ROI by busting a million sales.

Anyone who chose to launch a new IP with a budget larger than that is taking a large risk to establish an IP. Most of them find a way to get the job done under that amount.

[Lint of Death]

That's horrific. I love Kingdoms of Amalur and hope to get back to it someday soon. It is easily one of my favorite games.

[Deadend]

Chafee comes off like a total asshole, doing his best to throw everyone under the bus and cry DOOM! instead of trying to think of a potential good solution.
The whole thing just seems so bizarre, as no one thought 38 was hard up for money before May 1st, and suddenly they got nothing, crazy.

But they did put out some screenshots, and they look pretty, and cartoony.

[Ink Asylum]

Originally Posted by Deadend

Chafee comes off like a total asshole, doing his best to throw everyone under the bus and cry DOOM! instead of trying to think of a potential good solution.

Everyone involved with 38 Studios is going to be shrugging their shoulders and trying to pass the blame off to someone else. I don't see Curt Schilling fessing up to horribly mismanaging his company. Why should Chafee throw his reputation on the line throwing more good money after bad?

The whole thing just seems so bizarre, as no one thought 38 was hard up for money before May 1st, and suddenly they got nothing, crazy.

Having worked for a video game company that folded, the end can come quickly and not even the employees always see it coming. The upper management keeps a tight grip on the books until they can't hide the bad financial situation any longer.

[Widgetcraft]

Originally Posted by Deadend

The whole thing just seems so bizarre, as no one thought 38 was hard up for money before May 1st, and suddenly they got nothing, crazy.

Yeah, I mean... they just released some DLC not too long ago. I figured they were doing just fine.

[tacitus]

Originally Posted by Ink Asylum

Everyone involved with 38 Studios is going to be shrugging their shoulders and trying to pass the blame off to someone else. I don't see Curt Schilling fessing up to horribly mismanaging his company. Why should Chafee throw his reputation on the line throwing more good money after bad?

Nicely said - Chafee is grandstanding a bit, but he is in a bad position. He opposed it all along. Its a big sorry mess ... and I don't know if there was a good solution at this point.

[Ink Asylum]

Plus, it looks like Chafee isn't being kept well-informed by 38 Studios. He seemed like he'd just heard about the mass layoffs when he did his press conference today. Then there was the check provided last week that had to be returned.

[Stmfuller]

that really blows, they made a good game.

[Exodus]

To be honest it needed a stronger story and maybe a couple more notches on the gameplay.

It felt way too MMO'y where I was just on cruise control the whole time. It felt like playing WoW with a better combat system but I didn't give a shit I was just following whatever symbol/direction I was being pointed towards on the minimap.