Report – 38 Studios and Big Huge closure imminent

Thursday, 24 May 2012 21:03 GMT By Stephany Nunneley

Kotaku is reporting a rumor that troubled development house 38 Studios is laying off its entire staff, and closing down Big Huge Games.

Notices, missed payroll, cancelled benefits

According to a source speaking with the site, employees knew things were going south as early as April.

“38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered. We have not received a paycheck since April 30,” said the source. “On May 15, 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 the 22nd May this week.

“In my conversations today, there were no discussions about layoffs. We were just not given that confidence.”

“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.”

Meanwhile, a source familiar with the matter, has told Polygon 38 Studios laid-off remaining staff today, after the first round of lay-offs hit Tuesday.

An email sent to staff members, and forwarded to Gamasutra, stated the following: “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.”

The company had 379 full-time employees at its two studios as of March 15.

Twitter confirmations

It has been confirmed that Big Huge Games lead world designer, Colin Campbell, is one of those who have been let go.

“Big Huge Games was home for my wife and me for our adult lives so far,” he tweeted. “I’ll miss it terribly, but so proud. Good night and good luck.”

Community manager Charles Dane has also confirmed his departure, as has product manager Ryan Geddeswhich.

CEO Jen MacLean and SVP of product development John Blakely are also no longer with 38 Studios as of yesterday.

38 Studios has been in the news almost daily since it tripped up on its first loan payment pf $1.25 million to the state of Rhode Island. The first check reportedly bounced, but a second one issued cleared the bank.

Today, it was announced Helena Foulkes, the vice chair of the Rhode Island Economic Development Corporation which loaded the firm the $75 million to move to the state, has resigned.

Yesterday, 38 head Curt Schilling took to Twitter to state that KoA: Reckoing had “outperformed EA’s projections by selling 1.2 million copies,” its first 90 days on the market.

Big Huge Games was on the verge of shuttering before 38 Studios purchased the firm two years ago, when baseball legend Curt Schilling purchased the developer.

Its Kingdoms of Amalur: Reckoning action-RPG, was meant to give gamers a taste of what was to come with its Copernicus MMO – assets of which started trickling out this week.

“We gave them the million. They did not give us the tax credits, which would’ve not only payed the employees, but saved the studio most likely as we had several publishing deals in the works. The government flat out lied to us (big surprise).”

“The game failed”

During a press conference held this evening, Rhode Island governor Lincoln Chafee said he had no confirmation of the lay-offs or knowledge of whether the studios had indeed shuttered. He said he had reached out to the company, but discussions regarding lay-offs had not occurred.

“In my conversations today, there were no discussions about layoffs,” he said, adding that if so, the firm and the state were both facing “grim times.”

“We were just not given that confidence,” Chafee told the press. “It’s not a good situation. I’m not here to share good news.”

The governor said the Reckoning’s 1.2 million in unit sales was a failure, citing the need for the game to sell 3 million units in order for 38 Studios to break even, according to “experts” speaking with his office.

“The game failed,” Chafee said. “That was integral to the success of the company.”

State lawmakers have called on Chafee and the RIEDC “to immediately release all records related to 38 Studios’ financial situation and its $75 million loan guarantee.”

Coverage on the entire matter, as well as PDF files regarding the loan to 38 Studios can be found over on WPRI.

The government “flat out lied to us”

According to a Polycount forum post from Victor Cortis, an environment artist on Project Copernicus, the million dollar payment 38 Studios made to Rhode Island was “in assurance,” the firm would receive tax credits of $8 million.

“We even had buyers lined up for the credits and the government was sitting there telling us: ‘You give us the million, we give you the tax credits,’” he wrote.

“We gave them the million. They did not give us the tax credits, which would’ve not only payed the employees, but saved the studio most likely as we had several publishing deals in the works. The government flat out lied to us (big surprise).”

Cortis said he didn’t fault upper-management “too much,” as it had been “open about what’s going on,” but he said the higher ups thought the studio was going to “pull through this.”

“I’m sure the full story will eventually come out,” he said.

As of press time, neither 38 Studios, the Rhode Island Economic Development Corporation, nor Big Huge Games have responded to requests from the gaming press.

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