Things have gone from bad to worst and then to even worse than that for Rhode Island-based 38 Studios, the game studio owned by former pitcher Curt Schilling. After over a week of negativity surrounding the studio and its outstanding loans to the tune of $75 million, yesterday the studio laid off the entire staff of nearly 400–288 of them based in Rhode Island and another hundred at the Maryland-based subsidiary Big Huge Games.
If that’s not bad enough, it turns out that several employees of the now-staff-less studio were told that they may be stuck with second mortgages from the houses they thought the company sold for them when they relocated to Rhode Island.
According to sources who spoke to Polygon, “One former employee said they discovered this week that their Massachusetts home, which they had been told was sold last year, actually hadn’t been. The bank contacted them this week to ask why they [sic] mortgage wasn’t being paid.”
This unsettling development seems related to the company’s relocation program when it moved from Massachusetts to Rhode Island–after being offered $75 million of Rhode Island’s money. According to Polygon, if 38 Studios used state money to pay for mortgages or finance homes, the company might have violated its agreement with the state of Rhode Island. So for some employees–who already haven’t been receiving pay since May 1st–this is just salt being poured on an open wound.
But how did this all happen? Just a few months ago, 38 Studios released the Big Huge Games-developed Kingdoms of Amalur: Reckoning to critical acclaim and over 1.2 million copies sold. Despite all that, Amalur needed to sell at least 3 million copies to break even. The company ended up defaulting on its loan from the state when it failed to make its scheduled $1.125 million payment to the Rhode Island Economic Development Corporation on May 1. From that point, things just continued to slide further and further downhill.
So now here we are, a developer of a successful game has laid off its entire staff, shutting down not only 38 Studios but also Big Huge Games, not paid its employees for almost a month, and possibly mismanaged the handling of the selling of their homes. So far Curt Schilling has stayed relatively quiet about this whole situation. His only comment about the layoffs was this tweet: “Thank you to everyone sending prayers and well wishes to the team and families of 38 Studios.”
In a show of solidarity and fellowship, members of the game industry took to Twitter to create the hashtag “#38jobs” to inform former 38 Studios employees of other game developers and publishers that are hiring. It’s nice to see that in the midst of all this awfulness, the industry is able to come together and try to help out those hurt by this situation. I hope all those who lost their jobs from this debacle land on their feet. Even if 38 Studios fades away, they should be proud of the work they did with Kingdoms of Reckoning: Amalur.