Rhode Island gov working hard at 'keeping 38 Studios solvent'

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Reckoning, indeed! A developing story out of Rhode Island has Governor Lincoln Chafee talking in uncertain terms about the financial condition of Curt Schilling's 38 Studios, which the state gave a controversial $75 million loan to a couple years back to move down to Providence.

The Providence Journal reports Gov. Chafee, who was against the loan during his election, spent a "weekend of work on this subject," but wouldn't go into specifics. "We're doing everything possible, like I would for any Rhode Island company," he said this afternoon. The Journal reports he added the work was about "keeping 38 Studios solvent."

"We're concerned and just doing everything possible to ensure that 38 Studios stays part of the Rhode Island community," Governor Chafee told WPRI.com. "We're working on different issues with them." Asked if 38 Studios' issues could be resolved, Chafee said, "We're working on it."

WPRI also reports, based off a disclosure notice sent to bondholders, that last June PricewaterhouseCoopers audited the company and noted a "going concern" with the studio. The company expressed "substantial doubt" about whether the company could stay solvent.

A 38 Studios disclosure filing on March 15 stated the company had 379 full-time employees. The Providence studio held 288, while the rest were in Maryland at Big Huge Games, developer of Kingdoms of Amalur: Reckoning. There were also 34 full-time contractors and eight interns. The terms of the loan agreement with Rhode Island were that 38 Studios would have "450 direct jobs" in the state or face penalties, but it was later disclosed those penalties were more cost effective than actually meeting the terms of the deal.

Kingdoms of Amalur: Reckoning, developed by 38 Studio's Big Huge Games and published by Electronic Arts, did have a successful start, selling over 410,000 copies the US shortly after launch. However, it's quite unclear what revenue 38 Studios has actually made off the game.

38 Studios' "Project Copernicus" MMO is the game that's been in development at the Rhode Island studio. The studio has no booth planned for E3 and has given no indications as yet to have that product scheduled for launch this year.
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