It's the end of the road for 38 Studios and Big Huge Games

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I invested all my money into a potato farm which went bankrupt, my life is in taters.

Bad news for fans of the ambitious role-playing game Kingdoms of Amalur, as it looks like developer 38 Studios is now shutting down. The company has been laying off staff since Tuesday, due to the underperforming result of its game.

Its an unfortunate, but not unexpected, result, as staff were well aware that pink slips were incoming, from 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 a source to VG24/7.

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.

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.

An email sent to staff members, that Gamasutra picked up on, elaborated on why the company was in financial doldrums;

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.

38 Studios has been letting go employees left and right since April, and that included Big Huge Games lead world designer, Colin Campbell as well.

“Big Huge Games was home for my wife and me for our adult lives so far,” Campbell tweeted. “I’ll miss it terribly, but so proud. Good night and good luck.” Joining him on the retrenchment bus, was community manager Charles Dane and product manager Ryan Geddeswhich.

Read  THQ Nordic has acquired the rights to Kingdom of Amalur: Reckoning

CEO Jen Maclean and SVP of product development John Blakely are also gone, as of yesterday. The reason for the departures? 38 Studios took out a loan of over 75 million dollars in cash from state of Rhode Island, where the studio was based.

They’ve been defaulting on payments owed back to Rhode Island, with only one cheque actually clearing, while the rest bounced. 38 Studios Head, Curt Schilling, feels that despite the studio being effectively dead weight now, the KOA game still performed satisfactorily, and had “outperformed EA’s projections by selling 1.2 million copies”, since it launched 90 days ago.

That’s not the way that Rhode Island Governor Lincoln Chafee saw it however, citing that the sales record was actually a failiure, as 38 Studios would need to sell at least 3 million copies, just to break even, according to his “experts”.

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

While KOA may not have been game of the year material, it was still a solid start for a new franchise, one that would have expanded into a MMO game, by the name of Copernicus, had things gone their way.

It’s heart-breaking to see something that could have been truly great, with time and a few sequels, go belly-up, and to see so many talented developers lose their jobs in the process. Fortunately, the rest of the gaming industry has rallied around the former 379 employees, and have begun a campaign on Twitter to help them  out, with the hashtag of “38jobs”.

Last Updated: May 25, 2012

Darryn Bonthuys

Something wrong gentlemen? You come here prepared to read the words of a madman, and instead found a lunatic obsessed with comics, Batman and Raul Julia's M Bison performance in the 1994 Street Fighter movie? Fine! Keep your bio! In fact, now might be a good time to pray to it!

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