Rhode Island Governor Delivers Harsh Post Mortem Of 38 Studios

Written by: (Twitter @winterinformal - ) | May 24, 2012 6:30 pm

41 Comments

When asked why 38 Studios‘ situation suddenly went from bad to worse to terminal, Rhode Island Governor Lincoln Chafee had a very simple explanation:

“Companies fail overnight all the time… The game failed. The game failed. That was integral to the success of the company.”

The governor held a brief press conference this afternoon, in the immediate wake of 38 Studios’ closure. By “the game,” Chafee refers to Kingdoms of Amalur: Reckoning, which 38 Studios Curt Schilling confirmed as selling 1.2 million copies and “outperformed EA‘s projections by selling 1.2mm copies in its first 90 days.”

According to Chafee, that wasn’t enough.

The experts are saying [Reckoning needed to sell] in the three million range, just to break even.

Inevitably, Chafee was asked if he or the state could have done more.

“I asked the experts, “What could we have done better?” And they were telling me, “You did everything right. You put your money in, you supported the game, and you’re better off not meddling.” If I had meddled, there wouldn’t be all this horrible violence in these games, all the sex.”

Leaning heavily on his “experts” and swiftly dismissing all the “violence” and “sex” in video games, Chafee unsurprisingly paints himself as a non-gamer. But the same would likely be the case regardless of what specialized field he found himself unwillingly thrust into judging.

Meanwhile, the vice-chair for the Rhode Island Economic Development Corporation resigned today, a week after the board’s executive director, described as the “architect and chief cheerleader of the 38 Studios deal” did the same.

Are you satisfied with Governor Chafee’s explanations? Do you agree with him that the state did as much as it could to keep 38 Studios afloat?

Let us know in the comments below!

Rhode Island Governor Delivers Harsh Post Mortem Of 38 Studios

  • http://twitter.com/Critzkreig Cody Moody

    ME3′s release stole KoA’s limelight from me. I was considering a purchase, but ME3 was due out shortly.

  • http://twitter.com/Hoigwai Hoigwai

    I’m sorry but he’s a jackass, a politician who is among the group of people who can’t balance a budget shouldn’t have anything to say on failure.

    The game company from a development of the game point of view did it’s job well. It is the management of finance that failed, which is the case in about 90% of company failures.

    • pc11

      Will people that have no understanding of business stop commenting shit please? You have no idea what you are talking about.

      Just because you own a console or gaming pc and you play games does not mean you know anything about the industry and how companies work.

      It was exactly the development team of this game that ruined the company because it was too big, too costly and producing something that did not deliver on their promisses. The finance department as you put it simply did their job and now had to tell the “visionaires” that the money was over because they didnt deliver.

  • http://twitter.com/Rilandune Vincent Minnucci

    Like many politicians he is speaking not from knowledge of the situation but from ignorance.  And of course there is that he is a politician, which most often means he is a parasite.  And an asshole.  Don’t forget the asshole part.

    Two things that spelled disaster from the beginning, the involvement of EA, and a state government.  Two organizations (term used loosely) that have historically garnered a great deal of hate from the peoples of these United States.

    So very sad, this whole situation.  Terrible, really.  A remarkable game and a remarkable company that had so great a potential, but was in the end brought down by forces (potentially) out of their control.  

    • H S

      Obviously you don’t know much about business and paying bills. The only thing sadder than this company going bankrupt is your lack of any knowledge about business or politics. 

  • http://www.facebook.com/people/Robert-Caliolo/100003765889295 Robert Caliolo

    Last I checked 1.5 mil times $50 = $75 mil… the actual amount of the loan. Granted the company sells to distributer for 50% of that so $35 mil. Guess thats a failure.

  • http://www.facebook.com/people/Robert-Caliolo/100003765889295 Robert Caliolo

    Last I checked 1.5 mil times $50 = $75 mil… the actual amount of the loan. Granted the company sells to distributer for 50% of that so $35 mil. Guess thats a failure.

  • http://twitter.com/Fantomblu FantomBlu

    I think has a little to do with ME3 coming out at that time. However, I know that with single player games like this, piracy is rampant. People don’t think about the repercussions once they go to that torrent site and start the download. THIS is what happens when you start that torrent download. I know we’re all broke these days, but as a community of gamers, we MUST stop this or a repeat of this story will be commonplace.

  • http://twitter.com/Fantomblu FantomBlu

    I think has a little to do with ME3 coming out at that time. However, I know that with single player games like this, piracy is rampant. People don’t think about the repercussions once they go to that torrent site and start the download. THIS is what happens when you start that torrent download. I know we’re all broke these days, but as a community of gamers, we MUST stop this or a repeat of this story will be commonplace.

    • MMO_Doubter

       I am certainly opposed to piracy, but that didn’t kill this company.

    • pc11

      LOL for your information games that sell up to 3 million copies are even more torrented than this one and the companies are making money out of them. You have no idea what you are talking about.

  • http://twitter.com/FishBaitism Fish Bait

    It`s a shame they couldn`t broker a deal, letting 38 defer payments for a some time & therefore possibly keeping the staff there employed.

    • MMO_Doubter

      After seeing the shenanigans involved in Stargate Worlds’ development – they were wise to kill it now. It would have just become an even bigger money pit.

    • Kagitaar

      That would require Chafee to a person with sense and not a politician.

  • http://profile.yahoo.com/Z36GPOU3Q2QIQYBIDVNQAVGNGE Raul

    if you zoom in closely on his eyes, You can almost see the dollar signs he has instead of pupils.

    Yes, by all means, take no responsibility for Your greed – based decisions.

  • Sathure

    The game didn’t fail. It was fairly successful. The issue was they overstretched themselves. The reason why it needed to reach 3 mil is to keep funding Copernicus development.

    A fledgeling game studio shouldn’t be attempting to push an a Triple A MMO as their first title. Especially on an unknown new IP. MMOs are the largest most expensive games you can make. They should of kept it low key and went with smaller projects, Build up the 38 and Amular brand. Get some cash flow going. Get investor/publishers interested. Then you can try taking a swing at an MMO.

    • MMO_Doubter

       1.2 million for a high profile project IS a failure.

      • Trollslicer

         Dude you need to stop acting like you’re some kind of omnipotent industry insider. You do it everywhere you go and it’s annoying…

      • Trollslicer

          Dude you need to stop acting like you’re some kind of omnipotent
        industry insider. You do it everywhere you go and it’s annoying…

    • pc11

      The game failed since its sales did not cover development, marketing and distribution costs. That is what matters and box sales must always be put up agaisnt these numbers.
      Just read Business for Dummies and you will be fine.

      • Sathure

        3 Million Copies to stay afloat for a new IP single Player RPG? I don’t think so. The average AAA game costs UP TO 25 mill. Hell Dark Souls only sold 1.6 mil and it’s a known popular IP from Demon Souls. Until you can point to solid numbers for development/marketing costs I’m damn
        certain it’s Copernicus development costs coupled with the loan payments
        is what did them in.

        It’s MMOs that cost 75 Million and up.

        It beat EA’s sales projections. I doubt EA would of published the game if they projected it as a commercial failure.

  • blonyandcheese

    “Companies fail overnight all the time… The game failed. The game failed. That was integral to the success of the company.”
    And in pretty much every, single, other case, the Governor shuts his friggin mouth. States make loans to businesses ALL the time and you NEVER, EVER, see a state official act the way this douche is. Curt should sue Rhode Island just on principle alone. Let’s face it, Curt knew months ago that this day was coming, and I bet he was already looking for investors to help bail him out. So D-Day comes along and here is Gov. Chafing, ready and waiting to ruin any chance at all at 38 Studios locating other funding. The real nail in the coffin was this asshole announcing the game’s potential launch date. Who the fuck is this guy? And who in the hell is going to want to move their company into Rhode Island now? 
    I don’t even live in Rhode Island and this burns my ass. We have our own ass-clown to deal with here in Mass.

    The end.

    • Kagitaar

      Yeah, can’t see any company wanting to deal with this guy.

  • http://www.facebook.com/profile.php?id=545365392 Michael Ponte

    welcome to Rhode Island Politics rest of the world. This place is insane. Governor Gump strikes again.

  • samhainous

    Seems like public defamation of what was actually a popular game. I heard 4th highest selling of last year. Sue your way back to the top guys!

    • http://twitter.com/Jayeluu Jason Winter

      Unlikely. First, KOA:R was released in 2012. However, here’s a chart of 2011 game sales:
      http://www.vgchartz.com/yearly/2011/Global/

      They’re separated by platform, and KOA:R was launched on 3 platforms, which means each one was probably no more than about 500,000 sales. (VGChartz says 570k for X360.) That wouldn’t even make the top 100 in 2011 sales.

      • Old Ben

        To be fair, VGC’s list is only of retail sales, it doesn’t include downloads (ex., Steam / Origin), so the PC numbers are very incomplete. But it’s still highly unlikely that Amalur will be anywhere in the top-50.

  • DoctorOverlord

    Good coverage.   Nice to see the quick and informative updates on this story.   It doesn’t sound like it’s over even though the company has closed their doors.  

  • Kagitaar

    What I’m waiting to see is how the lawsuits pan out. There are a lot of employees that will most likely form a class action lawsuit to get paid with Shilling and now Chafee/RI in their sights. Chafee probably thought it’d be a great move politically, I’m giddy to see it all burn around him. This is such a great time to be publicly firing a lot of people, lots of great press there.

  • Old Ben

    Not sure what people expect the government to do. Obviously you don’t think the state bureaucrats would be capable of managing a game studio, right? Should they sink more taxpayer money into it, leave the same people in charge, and hope that they learn how to do basic maths (and pray that Copernicus is a huge hit)?

    There’s still a page saying “We’re hiring!” on 38′s website. Hiring? When you can’t even pay salaries (and obviously realized that you were running out of money several months ago)…? I hope they were hiring for the accounting department.

    And can someone remind me who actually publishes 38 Studios’ games…? I bet it’s some poor small company that can’t survive without state funding…

    • MMO_Doubter

       LOL. Yeah.

      A tiny indie called Electronic Arts (or something).

  • pc11

    This was bound to happen and needed to happen. Since the beggining of the century game developers turned from creating games to making money, with games increasingly becoming reskinned versions of the same genres over and over.
     
    Is it a big surprise that there is a huge movement of revival for 90s games? Why indie, and small company games are selling thousands of copies through Steam? Why a free mod for a game that never was that popular made it come back to top selling charts (Arma with WorldZ)?
     
    Old gamers are crying for the games that made them gamers, and new gamers are learning that fun in gaming goes past last tech graphics and version 3, 4, 5, … of the same style of game.
     
    Let SWTOR keep sinking EA’s stock (by the way the reason why EA is not jumping in to save these guys), let 38 Studios close, and hopefully the gaming industry will go back to the right track.
     
    38 studios had the most arrogant premise for its success. Lets copy WOW gameplay into a single player with the combat of Darksiders/God of War and hire some famous names to be in the project. People will beg us to sell them our game right? uuuuh no.
    ¨
    PS: that governor is an ignorant douche coming forward to blame the game’s failure on violent and sexual content

    • David Alcon

      *stands up and starts a slow clap*

    • http://www.facebook.com/people/Ronny-Sunrock/100002737688676 Ronny Sunrock

       Well I have been a hardcore gamer sens the 80′s and I really don’t get the revival of all the old classics through indie games. I have already plaid the original games. I want new.

      But my take on way Reckoning never sold as good as it could have done was because people compared it to Skyrim. And skyrim is just so much better game.

      I bought Reckoning to my PS3 but never finished it. But I would not say it’s a bad game. Just a decent game that was released at the wrong point in time.

  • Avan Gore

    Politicians all over the world spewing uninformed nonsense about anything involving video games has stopped being fun over 20 years ago. :(

    • Jado Cast

      related to Al?  I think he invented video games.  XD,   just kidding you!

  • http://twitter.com/Tidonius Tidonius

    I love the video news clips in the breaks makes the breaks feel like they should be on TV.

  • http://www.facebook.com/kparrott Kimberly Parrott

    lol Chafee on Gamebreaker this is for the win

  • pandora005

    Thats one dumb governor … if I was responsible for 38 studios I would be sueing him for vicious slander and being responsible for part of the failure. 

    • MMO_Doubter

       They are going to be plenty busy in court as it is. Heard about the mortgage fiasco yet?

  • Jaycephus

    Another example of the government picking the ‘winner’ in the economy, and finding themselves with a loser, all on the taxpayer’s dime. Solyndra? GM? Chrysler? More than half of the so-called Green Jobs companies that have received money in some way? It’s all the same. The taxpayer ends up holding the stock of a loser. And often, it seems that this corporatism, known as facism in the past, isn’t even an honest attempt to pick a winner or guide the economy… it is pure theft, where fat-cats take the subsidy, kick back to the politicians a fat $million-plus donation, and then jump out of the mess with a golden parachute. GM? That’s not a success, despite the lies told in the media. They still owe a massive amount of money to the taxpayer, and the government still owns half the stock, and if the government were to sell that stock, it would realize a loss, not a win. Just the act of selling that stock right now would likely lead to a bankrupt GM again, as the stock price plumetted, necessitating another bail-out. And all that’s after the company was stolen from the bond-holders, which includes blue-collar pension funds, and given outright to the union.

    But hey, let’s all vote for the same old politicians, like George Bush the III to have his second term, or George Bush the IV to have his first! Maybe this time, it will be different!

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