38 Studios The Latest To Shut Its Doors

The list grows ever longer. We first heard reports that 38 Studios was in financial trouble a couple of weeks ago when it was reported that they missed a repayment of the loan that they been given by the state of Rhode Island in return for setting up shop there. That payment did indeed come the following week, however matters were complicated by the failure to pay the employees in the same week. That was the 15th of May, in effect meaning that almost a month has passed since anyone received their due for the work that they were doing.

Today’s official closure of the studio was precipitated by a mass exodus by those in executive positions since the beginning of the week. Arguably the most galling fact of all in this situation is the manner in which the employees received their dismissal notice. It came on Thursday afternoon to each of the 279 members of staff on board at 38 and its satellite Big Huge Games:

“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.”

Having begun business back in 2006, the studio had pushed out only a single title in that timeframe, the well-received Kingdoms of Amalur: Reckoning. It managed to sell 1.2 million copies but this was not enough to break even on the development as this would have required over 3 million copies sold. This led the Rhode Island Governor to deem it a failure, backing the closure as a sound financial move as the venture could not possibly have been profitable for at least a year when their second game, the MMO known as Project Copernicus, was due for release.

It’s all history now. The Amalur IP has been turned over the Rhode Island government as it was used as collateral in the first instance and that’s that. It really is a shame to see such a promising development studio come to a premature end, but that’s the nature of the beast in this highly competitive industry. We can do nothing more now than hope that everyone affected by this manages to find work again in the near future.

Source - [WPRI]