38 Studios lays off all staff....

All staff at 38 Studios and its subsidiary Big Huge Games, the developer of Kingdoms of Amalur, have been laid off, according to reports.

The Kingdoms of Amalur: Reckoning Screenshot
An affected source passed the following internal email to 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."

It is sad news, but not too unexpected given the company's recent financial problems. Last week the company failed to pay employees, as well as to make the first repayment of a $49 million loan it received from the state of Rhode Island. In the end it did make the $1.125 million loan repayment, but it was facing another $2.6 million payment in November and a $12.6 million one in 2013.

During a Rhode Island press conference yesterday, governor Lincoln Chafee said Kingdoms of Amalur's lack of success was partly to blame for the situation. "The game failed," he stated, claiming that in order to break even it needed to sell more than three million copies, a target it didn't come close to hitting.

The first screenshots for 38 Studios' Project Copernicus emerged online earlier this week. The MMO, which appears unlikely to ever see the light of day, shared the land of Amalur with the company's recent RPG and was scheduled for release in June 2013.



A real shame this as Kindoms of Amalur turned out to be a stupidly good RPG

this game is what fable 3 should have been - was really taken with this game.

Seems a shame, I have only played the demo of Amalur and will pick up the full game at some point. It can't have helped being released at a similar time to Skyrim.

It appears there has been a big case of Fraud going on:

Yesterday, hundreds of staff from the beleaguered studio behind Kingdoms of Amalur: Reckoning were laid off. Today, if the latest reports are to be believed, things have got much, much worse.

Apparently, some of the employees from ex-baseball star Curt Schilling’s 38 Studios have been informed by banks that the homes they thought had been sold to the company have remained in their name.

That means that not only have they lost their job, they’re also unknowingly defaulting on a mortgage they were assured they no longer had. Unpaid mortgages can lead to personal bankruptcy and homelessness.

It’s being speculated that those involved with 38 Studios’ relocation program are the victims. While moving from Massachusetts to Rhode Island, 38 Studios offered to buy their employee’s old homes to make the process of relocation a little quicker and easier. Except it would seem that didn’t happen.

Or, at least, it didn’t happen in the way that employees had been led to believe. Instead it’s being suggested that 38 Studios did not buy the homes from those employees at all.

While much of the story is yet to be fleshed out, Polygon are claiming that “several sources” have confirmed that they’ve received massages from their banks asking why their old mortgages have not been payed.

Further questions have been raised regarding the legality of 38 Studios’ use of state money. The company has received significant investment from Rhode Island itself, money that you are not legally allowed to spend on financing homes or paying mortgages.

38 Studios are also facing accusations from Gov. Lincoln Chafee that because they didn’t alert the state ahead of time about the company’s 379 layoffs, the company is once more in default on the loan agreement with Rhode Island.

Whatever the outcome, expect this story to run for some time. It seems increasingly likely that alongside the continuing case between West/Zampella and Activision, this year’s biggest headlines will be more about courts than consoles.

Those are some serious issues, with more and more stories like this appearing it's clear that this industry has now moved away from it's infancy and is beginning to struggle with it's huge cash flows. It's high time that regulation was introduced to stop things like this and the mistreatment of employees....

Wow, that is utterly appalling

The people at the head of this studio who made these kind of decisions should be barred from ever having any involvement in the industry ever again. Not that there is any regulation in place to make that happen