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38 Studios employees unpaid since May 1, health insurance ends on Thursday
38 Studios employees have not been paid since May 1 and their health care will end Thursday at midnight, a source with knowledge of the situation tells Joystiq. Employees are normally paid on the first and 15th of each month.When asked if the studio would be shutting down this week, the source could only say, "Unknown at this time. Outlook is not good."We're informed that 38 Studios' MMO, "Project Copernicus," announced by Rhode Island Gov. Lincoln Chafee as launching in June 2013, did have that date as its internal target. However, "Whether this is realistic or not is up for debate."Gov. Chafee said in a press conference today that he would do what he could to prevent the studio from shutting down. Will the studio still exist within a month? "I have no idea," our source replied.
38 Studios appears to be getting no new help
The bad news continues to accumulate for Rhode Island developer 38 Studios. According to Rhode Island governor Lincoln Chafee, the company has received a grand total of no outside investment. It also has not received any of the tax credits that it requested, leaving the studio still deep in the hole. Chafee has stated that he is doing everything in his power to prevent the studio's closure. Staff members are also leaving the company at an alarming rate, with CEO Jen MacLean and senior VP of product development John Blakely both confirming their departures from the company. The hiring of both individuals was trumpeted as a mark of success as recently as March of this year, and Blakely was still employed by 38 Studios as recently as Monday evening. There's even talk of the company's health insurance running out. None of this news suggests that Curt Schilling's company will make a quick turnaround -- if indeed it makes a turnaround at all.
RI Gov. Chafee working to prevent 38 Studios shutdown, unaware of any new cash for company [update]
The situation faced by troubled MMO developer 38 Studios is not improving. According to Rhode Island Governor Lincoln Chafee, the company has not received any new investment. In a sudden press conference late today, he said the studio had not received any outside investment nor any of the new tax credits it has applied for. NBC10 reports that, when asked if 38 Studios would be closing, Chafee said he would do what he could to prevent it.WPRI reported today that CEO Jennifer MacLean removed the title of chief executive from her LinkedIn profile and listed her departure as having occurred in March. John Blakely, senior vice president of product development, also revised his LinkedIn profile to show that he left the company this month. Joystiq has also been informed of continuing layoffs at the company, and that health insurance has run out.The value of 38 Studios' Amalur intellectual property is estimated to be in the range of $20 million, according to Wedbush Securities analyst Michael Pachter. 38 Studios put up the IP as collateral against its $75 million loan, which could end up costing RI taxpayers $112 million if 38 Studios shutters.Update: 38 Studios employees have not been paid since May 1. WPRI reports 38 Studios may be ineligible for the millions of dollars in state tax credits because it isn't incorporated in Rhode Island.
Turbine hosts 300 job-seekers at Rhode Island hiring event
If you were vying for one of the 50 jobs Turbine put up for grabs at last night's job fair, well, get in line. The Providence Journal reports that 300-odd people showed up at the event, a turnout that the paper says was "higher than expected." How many of the 300 were 38 Studios refugees? That's hard to say since neither Turbine nor the job-seekers who came down wearing 38-branded jackets and sweatshirts would offer a comment. Turbine's Adam Mersky said the timing and the location of the meet-and-greet was no accident, as Turbine set up shop in a hotel mere blocks away from 38 Studios headquarters. "It's no coincidence that we're down here looking for talent," Mersky told the Journal.
Analyst estimates Amalur IP worth $20 million, 38 Studios employees head to job fair
The value of 38 Studios' Amalur intellectual property is estimated to be in the range of $20 million. We asked Wedbush Securities analyst Michael Pachter for his valuation following confirmation of layoffs at the studio and coverage of 38 Studios employees flocking to Turbine's recruitment drive in Providence last night."Nobody is buying MMOs after Star Wars fizzled. I think value is low, probably $20 million or so," Pachter said. "There is just no demand for game assets right now, as THQ proved when it tried to sell the Warhammer MMO. I think [Electronic Arts] could step in, since they are the publisher, so you might see some alternative way to get 38 some bridge financing."Electronic Arts had been the publisher on the Big Huge Games developed Kingdoms of Amalur: Reckoning, but has yet to confirm it would publish 38 Studios' "Project Copernicus.""Nope – never been an announcement on that," Jeff Brown of EA corporate communications told Joystiq. "We don't have any new announcements to make regarding 38 Studios. We enjoyed working with Curt and his team on their first game, Kingdoms of Amalur: Reckoning. Like game fans all over the world, we look forward to what 38 Studios creates next."With reports out of Providence delivering an uncertain near future for the studio, it wouldn't be surprising if publishers tried to pick up the Amalur IP for pennies on the dollar. However, with documents showing that 38 Studios put up the IP as collateral against the $75 million loan, anybody trying to pick up the IP will be negotiating with the state of Rhode Island for control of Amalur.
RI governor confirms 38 Studios layoffs
Rhode Island Governor Lincoln Chafee has confirmed layoffs at 38 Studios. The governor made the statement this evening following a scheduled meeting of the Rhode Island Economic Development Corporation (RIEDC), where about as little happened to resolve 38 Studios' troubled situation as at last Wednesday's "emergency meeting."On Friday Gov. Chafee held a surprise press conference about 38 Studios, in which he said the government was done providing easy money for the developer, and gave "Project Copernicus" a launch window of June 2013.WPRI reporter Ted Nesi told Joystiq that Gov. Chafee confirmed the layoffs, but was ambiguous about whether employees at the studio were being paid.38 Studios continues to remain silent and has not made any official statement about anything since this whole mess started early last week. According to the AP, 38 Studios founder Curt Schilling brushed past reporters on his way out of the meeting this evening, saying there was "misinformation" he couldn't clear up in a sound bite.Not at all coincidental, Warner Bros. owned Boston-area MMO developer Turbine will hold a recruitment event at the Hotel Providence Tuesday night from 5-9PM. The studio currently has over 50 open positions.We continue to leave the line open if 38 Studios or any employees wish to share their side of what's going on at the developer.Update: Avalanche Studios, which opened up a studio in New York last year, will also hold a recruitment drive at the Westin Providence Hotel on Thursday, May 24, from 12-7PM.
Layoffs confirmed for 38 Studios, Rhode Island takes no action
If last week's Project Copernicus flythrough had been a hopeful note, the latest news out of 38 Studios is another downturn. Following a meeting today, the Rhode Island EDC board decided to take no action to help the ailing company at this time. Governor Lincoln Chafee said following the meeting that the financial situation of the studio remains unchanged from last week, but did note that the company has seen some layoffs and underwent unspecified internal shifts. Founder Curt Schilling did not directly respond to press inquiries, stating that he would answer questions when he is able to do so. He did, however, state that he was not taking further taxpayer money. Whether or not there will be a company there to take any money in the near future is still very much in doubt, however, and while Chafee has been a bit more diplomatic about aiding the studio, he has stressed that any assistance would be far on the conservative side.
New flythrough video previews Project Copernicus
In the wake of the Rhode Island governor's release announcement, all eyes are on 38 Studios and Project Copernicus. Up until now the title has been talked about only in hushed tones, but today we've gotten a little something more: a flythrough of some areas of the game, showing off what we can expect from the environments. And suddenly that announced release date seems just a touch more plausible because the environments certainly look gorgeous. Players of Kingdoms of Amalur: Reckoning will no doubt recognize some of the environmental looks if not the exact locations, but everyone can appreciate the design that's gone into each region. Of course, it's a long road between showing a pretty place and making a playable game, and 38 Studios is still struggling to keep its head above water. But the MMO the studio has promised seems a bit more plausible now, and hopefully there's a light at the end of this particular tunnel. [Thanks to all the tipsters who sent this in!]
First video of 38 Studios' 'Project Copernicus' MMO flies over Amalur
38 Studios released a "Project Copernicus" sizzle reel this afternoon, featuring locales in Amalur's MMO game world. The timing of this video is certainly interesting, since it comes on the same day that 38 Studios handed over an overdue check to the state of Rhode Island and its governor, Lincoln Chafee, announced "Project Copernicus" would launch in June 2013.
38 Studios' Project Copernicus to release in June 2013, says RI governor
It is not every day that a U.S. governor is the one to announce the launch window for an MMO, so savor the weirdness while you can: Rhode Island Governor Lincoln Chafee announced at a press conference that 38 Studios will be releasing code-name Project Copernicus next summer. "What I understand is Copernicus is June of '13," Chafee said. He also stated that he thought the financial deal was a "risky enterprise" from the start. 38 Studios Founder and Chairman Curt Schilling said on Facebook that rumors of his using the state funds to repay his personal investment in the company was "not true." In a separate post, Schilling attempted to set an optimistic tone: "We will find a way, and the strength, to endure." We have been following the financial turmoil that 38 Studios is in following its default on paying back Rhode Island for its $75 million loan. The studio and state are looking for options, but in the meanwhile, 38 Studios has been struggling to make payments by holding back employee paychecks and seeking additional capital from private investors.
Rhode Island governor gives 38 Studios' Copernicus MMO a June 2013 launch
Rhode Island governor Lincoln Chafee told attendees of a 38 Studios-related press conference that the long awaited 38 Studios MMO – only known currently as "Project Copernicus" – is set to launch in June of 2013. Chafee said, "What I understand is Copernicus is June of '13."Considering we've literally never heard any information on the Amalur-based MMO (aside from the fact that it's an Amalur-based MMO), it's a bit hard for us to believe that the game will arrive by next year. "I said from the beginning that it was a risky enterprise," Chafee told press of the troubled business deal between 38 and Rhode Island.38 Studios is supposed to start paying back its $75 million loan – facilitated by the state of Rhode Island and supported by bond investors – by the beginning of 2013. It's unclear how 38 will afford those payments, but Chafee repeatedly pointed out 38's intention to seek private capital (read: more money from private investors – and not from the state). Said private capital has yet to be secured, Chafee said.
38 Studios successfully pays $1.125 million to Rhode Island
38 Studios's $1.125 million check to the state of Rhode Island has cleared, governor Lincoln Chafee announced during a press conference this afternoon, thus fulfilling the first required payment on the studio's loan from the Rhode Island Economic Development Corporation.Rhode Island is changing its legislation on tax breaks, closing loopholes pertaining to state funds being used for motion-picture endeavors, Chafee said. The state's interest lies in protecting the taxpayers, balanced with keeping 38 Studios solvent, since "taxpayers have had a very generous deal for 38 studios," Chafee said."It's time for them to go out and get private capital funding," Chafee said. "That's the deal. It's a generous deal, but stick to it."Rhode Island officials believe that the total of the $49 million loaned to 38 has been spent. Chafee said that until late April, meetings with 38 suggested that they would make their May payment. "I want to make sure we're doing everything possible to make sure 38 doesn't fail," Chafee said. "We're in deep." Everything possible except giving them more money."There's not going to be any money from the state. They're not coming here for easy money."According to Chafee, "Basically, the access to private capital hasn't materialized."38 Studios' next payment is a debt service payment due November 1 of $2.6 million, and Rhode Island officials believe the studio will have the capital to cover it.38 Studios will then owe $12.6 million in full annual debt service in 2013, and "that's on their dime," officials said.Chafee said he recognized the risk involved in starting a new gaming studio, but the state would have benefited greatly from the studio's "huge success" had it done well."I said from the beginning that it was a risky enterprise," Chafee said. Regarding how 38 Studios will function if it doesn't have the funds to pay its employees, Chafee reiterated, "Again, these are the ramifications of being in a risky business."Chafee doesn't plan on taking a gamble of this nature again: "Never, never ever. Not under my watch," he said.
38 Studios paying state back by not paying employees
If you're familiar with the phrase "robbing Peter to pay Paul," you'll understand the latest episode in the ongoing 38 Studios financial crisis. Except replace "Paul" with "the state of Rhode Island" and "Peter" with "the company's employees." Yes, in order to make the most recent payment to the state that sparked this whole crisis, the Rhode Island Economic Development Corporation has been informed that Curt Schilling's company is paying the state but not paying any of the company's employees. According to anonymous sources, all temporary employees and contractors have also been terminated. While this measure might help forestall immediate action, the company is still on the hook for a $75 million loan, and Rhode Island governor Lincoln Chafee has made it clear that the company is looking for more assistance from the state in order to remain viable. 38 Studios continues to make no public statements at this time. We'll no doubt have more on this story in the coming days as it continues to develop.
38 Studios doesn't make payroll, can't pay state either [update]
38 Studios was unable to make payroll this week, but is in the process of making the $1.125 million payment that set off the company's crisis earlier this week. WPRI reports that a spokesperson for the Rhode Island Economic Development Corporation (RIEDC) did confirm that former Red Sox player Curt Schilling's video game company was unable to pay its employees.A source tells Joystiq that beyond not making payroll, all temps and contractors at 38 Studios were let go this week.At the same time, Governor Lincoln Chafee's office stated 38 Studios is in the process of making the overdue payment to the state. The head of the RIEDC, Keith Stokes, who approved the $75 million loan to 38 Studios in 2010, resigned late last night.If 38 Studios does close, Rhode Island taxpayers will have to repay the $75 million bond (plus interest) through 2020, but they'll own the intellectual property of the developer, which would likely be sold at auction.If the company does make the payment to the state, the next round will be owed in 2013. Of course, there won't be a 38 Studios much longer if it isn't paying employees.Update: The hand-delivered check for the overdue $1.125 million payment has been returned by the EDC to 38 Studios after the company's chief financial officer said there were insufficient funds to cover it.
The scene following 38 Studios' 'emergency meeting' with Rhode Island officials
To get a real sense of the severity of the situation between 38 Studios and the state of Rhode Island, here's a package by the Providence Journal. The events shown immediately follow today's "emergency meeting," where officials decided they didn't know what to do about the studio.
Rhode Island owns Amalur, all other 38 Studios intellectual property if studio defaults
If 38 Studios does shutter, beyond Rhode Island taxpayers having to pay off the $75 million bond (plus interest) through 2020, it appears the state will also own the intellectual property of the developer as a parting gift. Reviewing updated documentation released by the Rhode Island Economic Development Corporation (RIEDC) today, it appears 38 Studios put up all present and future IP by the company as collateral.According to the documentation, 38 Studios' intellectual property rights and other collateral were pledged to the RIEDC and assigned to a trustee, which we've confirmed by pulling Uniform Commercial Code documentation. Any proceeds made from the sale of the collateral would go back to the bondholders. This covers "all rights, title and interest in any projects, including video game projects," such as Kingdoms of Amalur: Reckoning and "Project Copernicus" – the title currently in development at 38 Studios."Based on what information I've been able to review on the 38 Studios situation, it appears that the funds they received from the RIEDC were secured by collateral that amounts to all of 38 Studios assets, including all of their intellectual property," attorney and Law of the Game editor Mark Methenitis told Joystiq this afternoon. "That would include all the rights to Kingdoms of Amalur and any other games they may have in development, even if no information about those titles has ever reached the light of day."
No relief in sight for 38 Studios after emergency meeting [Updated]
Generally, when your company defaults on a major loan, you might expect an emergency meeting about the loan and the company's future would produce some results. But apparently today's meeting between 38 Studios owner Curt Schilling and Rhode Island governor Lincoln Chafee resulted in... absolutely nothing. Specifically, Rhode Island's Economic Development Corporation will take no immediate action to prevent the studio from going under, with Chafee on record as asking, "How do we avoid throwing good money after bad?" It's a loaded question if you consider that the failure of 38 Studios would put the state's taxpayers on the hook for more than $112 million. Schilling has declined to elaborate on the company's state in interviews, and he has not made public how much more funding the company is seeking. It's bad news for the studio, bad news for the state, and bad news for any fans still looking forward to the possibility of Project Copernicus in the future. [Update: Joystiq reports that "it appears 38 Studios put up all present and future IP by the company as collateral," meaning that if the studio defaults, the state of Rhode Island will own all of its game assets. We've tucked some of the ensuing news coverage in the video behind the break.]
38 Studios, Schilling ask Rhode Island for more money; state officials freeze
Today's emergency meeting by Rhode Island officials to determine what they are going to do about Curt Schilling's 38 Studios has concluded with officials freezing like deer in headlights. Nothing happened.Rhode Island's Economic Development Corporation will take no immediate action to aid the developer, following a closed-door meeting attended by Governor Lincoln Chafee and Schilling, who asked for additional help to save the company. Schilling refused to answer press inquiries and officials wouldn't declare how much money the studio is seeking."How do we avoid throwing good money after bad?" Chafee is quoted by the Associated Press as saying after the three-hour emergency meeting finished."The company still has the option to cure the existing default by paying the $1,125,000 guaranty fee that is past due," reads an official statement by the EDC board. "In the meantime, we will continue to talk with 38 Studios and develop additional information, and will resume the Board meeting at our regularly scheduled meeting on May 21. The members of the Board may not discuss the confidential information received and discussed today."If the studio doesn't receive assistance, it appears Rhode Island taxpayers may very well be on the hook for the $75 million 38 Studios loan that, after interest, would require paying back $112.6 million through 2020.
38 Studios whiffed last loan payment, received nearly $50 million from Rhode Island thus far
The hits keep coming for ex-baseballer Curt Schillings' 38 Studios. The company reportedly missed its latest loan payment of $1.125 million to the state of Rhode Island on May 1, effectively defaulting its $75 million loan. WPRI spoke with Rhode Island House Speaker Gordon Fox who confirmed the news.The loan's facilitator, Rhode Island's Economic Development Corporation, called an "emergency meeting" for tomorrow morning, wherein it will discuss "an unexpected occurrence that requires immediate action to protect the public regarding the 38 Studios financing." As reported earlier, if 38 Studios were to fully default on its loan obligations to investors supplying the loan via the Rhode Island government, the responsibility would fall to Rhode Island's taxpayers – to the tune of $112.6 million.Of the $75 million borrowed by 38 Studios from the state of Rhode Island, $49.8 million was received by the studio as of March 15, WPRI reports. Given that, it seems worrisome at best that 38 Studios was unable to fulfill its recent payment of $1.125 million. 38 Studios is working on the Kingdoms of Amalur MMO – the game was originally promised for a launch ahead of 2013, when 38 Studios is set to begin paying back bondholders on its $75 million loan. It's unclear what stage its MMO is at, and 38 Studios hasn't made a public statement regarding its recent issues.[Image credit: 38 Studios]
If 38 Studios goes under, Rhode Island taxpayers will be footing the bill [Updated]
Project Copernicus and Kingdoms of Amalur: Reckoning developer 38 Studios is in some hot water, but it looks like that may be the least of your worries if you're a Rhode Island resident. Rhode Island's WPRI reports that if the studio founders and can't pay back the bonds given to it by the state, then the onus of doing so will fall upon Rhode Island taxpayers. How much moolah are we talking about? Something to the tune of $112.6 million US. According to Joystiq, "If 38 Studios can't pay, the governor is required to ask the General Assembly to repay bondholders," which means that Rhode Island taxpayers will be responsible for footing the bill by 2020. For now, though, both the studio and the Rhode Island government are tight-lipped on the studio's future, and by association, the future of Project Copernicus, so we'll just have to wait and see how this plays out. [Update: Our sister site Joystiq reports that 38 Studios "missed its latest loan payment of $1.125 million to the state of Rhode Island on May 1, effectively defaulting [on] its $75 million loan." Rhode Island's Economic Development Corporation will hold an emergency meeting tomorrow morning to discuss the situation.]
