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Kingdoms of Amalur Creators Shut Down, Employees In Limbo

May 25, 2012

Big Huge Games, creators of Kingdoms of Amalur: Reckoning (an RPG that was modestly praised by critics), and its parent company, 38 Studios, have been shut down following dire financial woes. These troubles have dogged the company since being handed just under $50 million of a $75 million loan by the Rhode Island Economic Development Corporation in 2010.

Considering the amount of work that Major League baseball player Curt Schilling has put into the company, it makes for a sobering read. A governor at Rhode Island said that the game needed to sell three million copies to merely break even. The huge overspend on Project Copernicus, the main MMORPG project of the developer, is thought to be a cause of the money drain.

The fallout from the company’s fall has predictably hit the employees first (and perhaps hardest). Kotaku received an anonymous source from a former employee at 38 Studios today:

38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered.

We have not received a paycheck since April 30th.

On May 15th, we found out we were not getting paid when our checks did not hit our accounts.

Our medical insurance runs out tonight at midnight.

We found this out when an employee’s pregnant wife was told by her doctor, this was on Tuesday 22nd May this week.

The company has not communicated anything concrete to the team throughout this process, leaving team members to figure out insurance stop-gaps (where people could afford it), etc. on their own.

Compare this with the company’s no-frills approach to announcing its deathknell, this time from Gamasutra:

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.

Important Benefit Information:  Rhode Island Law 27-19.1-1 is Rhode Island’s mini-COBRA Law or the Extended Medical Benefits Statute. This allows laid off employees to continue their health benefits at the same group rate and level of coverage they are currently receiving. The employee will be required to pay the full group premium rate. You have thirty (30) days to elect to continue coverage.

A link to the law can be found here: http://www.rilin.state.ri.us/Statutes/TITLE27/27-19.1/27-19.1-1.HTM

Building Access: Everyone will be able to access the building tomorrow, Friday, May 25th, 2012, in order to collect any personal belongings still in the Studio.

Unemployment Insurance: Unemployment insurance benefits do apply during a lay off and you may file a claim for benefits.  The determination for eligibility is made by the RI Department of Labor & Training, not the company. Here is a link to the site where you can find the information on how to file a claim: http://www.dlt.ri.gov/ui/fileclaim2.htm

The Department of Labor’s Rapid Response Team will be onsite tomorrow, Friday, May 25th, 2012, at 11am, to conduct an unemployment orientation which will address questions such as:

•         What to do when I’m laid off?

•         When should I file for unemployment?

•         What happens if I work in RI but live in a different state?

We want to thank you for your hard work and dedication to 38 Studios.

Bill Thomas
President & Chief Operating Officer

According to former employees on Twitter, future money gained through Kingdoms of Amalur will likely be sent to Rhode Island.

To me, this is a case of defining the difference between the creator and the consumer. It is easy to say that the fall of Kingdoms of Amalur was because of stiff competition from well-known games in the same genre (take a bow, Skyrim and Mass Effect), but the reviews have been sound and sales of the game have been better than those of other companies.

There’s the point made by an community member by the name of KaraPG:

As a Rhode Island resident I was wondering if you plan to use some of the large sum of money you made playing baseball to pay back the loan you owe the state, or if you’re just going to let us middle-class taxpayers spend years paying for your mistakes?

People are angry about this ambitious project turned sour, and are now demanding to know why people invested so much money into a high-risk project headed by a person with zero experience in the industry in the first place. It is as if people thought that a celebrity who played games would be more enlightened and therefore more trustworthy with $75 million than a random kid plucked from Xbox Live or something.

Original sources: Metacritic: Kingdoms of Amalur: Reckoning; Gamasutra: Schilling Invested ‘Majority’ Of Earnings Into 38 Studios, 38 Studios, Big Huge Games lay off their entire staffKotaku: 38 Studios And Big Huge Games Shutting Down, How a Pro Athlete’s Video Game Studio Came To Owe Rhode Island Millions, Curt Schilling’s Role-Playing Game Supposedly Needed to Sell 3 Million Copies to Not Fail, Boston.com: Curt Schilling, a hypocrite about smaller government, KoT:R Forums: Meet The Team: Curt Schilling

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