38 Studios Makes Good on First Payment for $1.125 Million

After it was revealed yesterday that Curt Schilling’s beleaguered 38 Studios—the developers of this year’s Kingdoms of Amalur: Reckoning—couldn’t make their first loan repayment, the State of Rhode Island held a press conference today announcing that the first payment is in. The $1.125 million payment was originally due on May 1, and when it was discovered that the company’s attempt to pay this week had failed, it was also revealed that 38 Studios couldn’t make payroll, and had laid off their temporary and contract employees.

But with today’s payment, Rhode Island’s taxpayers are off the hook—for now. Should the company default on its $75 million loan (of which roughly $50 million has been spent, with the rest remaining in untouchable accounts in case the company defaults), the taxpayers would have to cover the debt, paying $112.6 million through 2020 (the amount having risen from $75 million because of interest and all of that good stuff).

Just where the cash to cover this first payment hasn’t yet been revealed, though, and I’m just guessing, it’s possible that Schilling himself—a retired Major League Baseball pitcher—may be footing the bill this time around. Either way, a post on Joystiq notes that Governor Lincoln Chaffee announced at today’s press conference that the developer will be releasing an Amalur-based MMO in the summer of 2013. Of course, with no cash to speak of and no showing at E3 next month, many wonder how realistic that prediction is.

Another post on Joystiq has some more details from the press conference, including the fact that the company’s next payment is due on November 1 for a total of $2.6 million. By 2013, the company will owe $12.6 million, and as the years go on, the payments should only increase from there.

Said Governor Chaffee, who publicly stated his opposition to the loan when it was made in 2010, before he took office:

“I want to make sure we’re doing everything possible to make sure 38 doesn’t fail… We’re in deep… There’s not going to be any money from the state. They’re not coming here for easy money… I said from the beginning that it was a risky enterprise.”

So, for the moment, it seems as though 38 Studios is in the clear, though how they’ll make their next payment is unclear. The company has only one game on the stands, albeit with a few DLC packs. How they’ll be earning revenue between now and November is a mystery to me—and presumably to the State of Rhode Island as well.

Could an EA buyout be in the offing? Or another company? It’s important to note that any kind of buyout would basically amount to wanting to take ownership of the Amalur IP (which, at this point, is still of rather questionable value) and taking on $112.6 million in debt. Not the greatest deal, but we’ll see I guess.

Via WPRI, Joystiq, and Joystiq again