Reports: Amalur Developer 38 Studios Struggling to Stay Afloat
It seemed as though everything was going pretty well this year for 38 Studios, the Curt Schilling-founded video game developer behind EA’s new IP, Kingdoms of Amalur. Last month we had reports that the game had sold over 400,000 units in two months, a pretty impressive number considering the fact that it was a brand-new franchise. New DLC packs continue to arrive, and, overall, gamers seem pretty happy with the game.
Nonetheless, today reports of financial troubles at 38 Studios, one of the co-developers of the game, have started to swirl. An article in the Providence Journal from yesterday reveals that Rhode Island Governor Lincoln Chafee has met with 38 Studios’ executives as well as representatives from the Rhode Island Economic Development Corporation (RIEDC) to go over the studio’s finances, with hopes of “protecting the taxpayer dollars.”
Apparently the studio was loaned $75 million by the RIEDC in 2010 in order to move them from Massachusetts to Providence, says a report on WPRI. Part of the deal was that 38 Studios would employ 450 people in Rhode Island. But apparently only 288 of the company’s 379 full-time employees are in Providence, with the rest based at another office in Maryland. In addition, the $75 million in loan funding is going towards the studio’s next game, an MMO codenamed “Project Copernicus,” says the report. And last year an independent audit issued a “going concern” and noting “substantial doubt” about the company’s ability to stay in business.
It’s unclear what the fallout of these meetings will be, and what will happen if (or when) 38 Studios can’t begin the process of paying back the loan—which, according to the Journal article, will have to begin next year and continue through 2020 (relatively standard procedure for municipal loans). One of the reasons for the speculation over 38 Studios’ stability is the fact that they’ve been removed from the list of attendees of next month’s E3 conference, a move that’s usually cause for alarm considering all the business and press the conference tends to drum up for those involved.
As of this writing, 38 Studios hasn’t made any public statements about the situation.