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[GiantBomb]38 Studios Pays its $1.125 Million Debt, Will Receive No Additional Funds from State

post #1 of 33
5/18/12 at 11:24am
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At a press conference held today, Rhode Island governor Lincoln Chafee announced that 38 Studios had successfully paid the $1.125 million payment it had previously defaulted on when it missed its original May 1st deadline.

38 had previously attempted to make the payment yesterday, but the check was refused by the Rhode Island Economic Development Corporation when it was made clear that the studio had insufficient funds to cover the payment.

Chafee said that the total $49 million thus far loaned to the studio has reportedly been spent, though an auditor will be brought in to ensure that is the case. Chafee estimated that 38 is currently spending around $4 million a month in total expenses.

Source

I have three co-workers that worked with me on LEGO Universe when that studio closed last November and then moved 2000 miles to Rhode Island to work at 38 studios, and now they may be getting laid off again. The employees at 38 studios didn't get paid last week...

EDIT
Here's some more news on the situation at 38 studios:
http://www.necn.com/05/21/12/Schilling-meets-with-RI-officials-over-3/landing_business.html?blockID=711780&feedID=4209

and

http://www.gamasutra.com/view/news/170730/38_Studios_ongoing_financial_issues_lead_to_staff_layoffs.php
Edited by lordikon - 5/22/12 at 9:36am
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post #2 of 33
5/18/12 at 11:34am
$4M a month? On what?
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post #3 of 33
5/18/12 at 12:17pm
$4 million a month in expenses? Even if I snorted coke ten times a day at $200 a pop and spent $1500 a day on hookers, that's only $105,000. Unless there's 38 employees and each of them do the same, I guess I can see $4 million a month being spent. tongue.gif
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post #4 of 33
5/18/12 at 12:34pm
They have ~300 employees, and a rather expensive way of living, when looking at their website. No surprise they spend so much wink.gif
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post #5 of 33
5/18/12 at 12:48pm
Quote:
Originally Posted by Setzer View Post

They have ~300 employees, and a rather expensive way of living, when looking at their website. No surprise they spend so much wink.gif

<--- Thats a lot of hookers and blow.
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post #6 of 33
5/18/12 at 1:22pm
Quote:
Originally Posted by Boinz View Post

<--- Thats a lot of hookers and blow.

sharing is caring.

along with the booze. Never forget the booze. thumb.gif
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post #7 of 33
5/18/12 at 1:24pm
Quote:
Originally Posted by Raiden911 View Post

sharing is caring.

Sounds like a breeding ground for STD's if you ask me.
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post #8 of 33
5/18/12 at 1:33pm
I grew up in RI and now live in the first town or the line in MA so this story is close to me even if I no longer pay taxes to RI.

This situation is a tragedy. It was extremely controversial when the state wooed the studio from MA back in 2010 (the height of the recession) with 80 million dollars for the promise of 300 FTEs. Now if they default and become insolvent the taxpayers are left holding the bill for the tune of approx 112 million.

Already the state is in rough financial shape with one of their cities becoming bankrupt and ending up in receivership and other issues. Already they are looking at increasing sales tax again (with a special 10% tax on prepared foods).

Unfortunately it looks like it was a risk that shouldn't hae been taken.

On an aside, the fact they wrote a bad check is absolutely ridiculous.
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post #9 of 33
5/18/12 at 1:40pm
Quote:
Originally Posted by bce22 View Post

I grew up in RI and now live in the first town or the line in MA so this story is close to me even if I no longer pay taxes to RI.
This situation is a tragedy. It was extremely controversial when the state wooed the studio from MA back in 2010 (the height of the recession) with 80 million dollars for the promise of 300 FTEs. Now if they default and become insolvent the taxpayers are left holding the bill for the tune of approx 112 million.
Already the state is in rough financial shape with one of their cities becoming bankrupt and ending up in receivership and other issues. Already they are looking at increasing sales tax again (with a special 10% tax on prepared foods).
Unfortunately it looks like it was a risk that shouldn't hae been taken.
On an aside, the fact they wrote a bad check is absolutely ridiculous.
^ +1
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post #10 of 33
5/18/12 at 1:44pm
Yeah I feel for the people of RI. That said I hope this company makes it. As a fan of MMOs I like Shillings obvious passion for them. I hope he is able to get his company together and put a decent game out. If they could even have a Rift sized hit they could bring home some pretty decent profits for a long time.

On the other hand basically every MMO goes through a long and awful development phase. If they are having this much trouble now with nary a peep about the game except that it's 'coming' that doesn't bode particularly well.

The other crazy thing about this is that KoA sold 600k copies in the US. For a new IP that is actually a pretty fantastic number. Two months after that and we're hearing about money problems? Sounds like bad mismanagement.
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