38 Studios Lays Off Entire Staff
Today, news broke that Curt Schilling’s 38 Studios, dogged by reports of financial troubles over the last two weeks, has laid off its entire staff, including the entire staff of its subsidiary studio, Big Huge Games.
A report on WPRI today has the text of an e-mail sent to the staff today, which reads as follows:
“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.”
According to the report, 379 people have lost their jobs today.
A post on Joystiq earlier today reveals that, according to Rhode Island Governor Lincoln Chafee, the studio needed to sell three million copies of Kingdoms of Amalur: Reckoning just to break even. Shortly after the game’s release, NPD had reported that the game sold over 400,000 copies, a very respectable number for a brand new IP being released in late-winter. The Joystiq post reports that the game has sold “1.22 million copies in its first 90 days,” according to Curt Schilling himself.
It was revealed just yesterday that the company hadn’t paid its staff since May 1. For the moment, the Rhode Island Government still seems confident that the studio continues to expect their next loan repayments, says another Joystiq post. And this does make a certain amount of sense: without having to pay staff, any revenue that comes in from sales is pure profit!
But, of course, with no staff, there’s no way to continue working on the in-development “Project Copernicus,” which could generate more revenue than the currently available Amalur would. No new products equals no new revenue—so it’s something of an open question as to where the rest of the money that’s owed to Rhode Island on the $75 million loan will come from.
Don’t be surprised if we hear that the company has filed for bankruptcy tomorrow, at which point the assets will be liquidated, the cash from which will go to the government, and the taxpayers will spend the next few years footing the bill.
Our condolences go out to the people who lost their jobs today.