NPR report: KoA turning into a political scandlein Rhode Island

On my way home I caught this on the radio from NPR concerning 38's missed payment:

http://www.npr.org/2012/05/22/153280535/r-i-strikes-out-on-ex-pitchers-video-game-venture

I can't remember (at least in the States) when a single video game had this kind of controversy. There have been issues politically before, such as complaints over violence, but this is the first time I've heard of a scandal.

Well, article says it all really. The only thing which I would add is that Rhode Island has (and had) very serious debt problem so possibility of loosing 75 million dollars is the last thing they need.

It begins to remind me of the band called GTR ...

Well the studio can't afford to pay there employees and there losing there insurance soon also. Rhode Island already lost $75 million and I know for a fact I wouldn't loan them anymore money either.

LINK -http://www.joystiq.com/2012/05/23/38-studios-employees-unpaid-since-may-1/
LINK -http://www.joystiq.com/2012/05/23/ri-gov-chafee-working-to-prevent-38-studios-shutdown-unaware-o/

Despite paying the state 1.5 million dollars and setting a 2013 for there mmo the company will probably be gone in the next few months.

Sad, this story began with considerable promise.

Yes, it is sad indeed.

No matter how much one likes or dislikes them.

I am still waiting to find out how a company with 75 milion state loan and a game which sells well was unable to make very first loan repayment.

Yeah, me too. Was it that poorly managed? I wouldn't be surprised. Managing software development is not easy. And for someone with zero experience in the matter, just seems like a recipe for disaster.

Thrasher said:

And for someone with zero experience in the matter, just seems like a recipe for disaster.

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Sometimes, I think they would do a better job...*looks at managers at work* They would so do a better job.

Ok I can kind of see how this has become political fodder:

The path that led to Schilling to this uncomfortable situation began at a fundraiser two years ago, where former Rhode Island Gov. Don Carcieri suggested that Schilling move his video game company from Massachusetts to Rhode Island. The idea was to bring jobs in and turn the state into a video game hub. Carcieri even offered Schilling financial help, in the form of a state loan.

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So Schilling was helping the previous gov at a fundraiser when this payola was offered to him - I can see how this might look like political cronyism to some.

it was the form of a "guaranteed loan" even

the situation had its critics then with fellow Republicans who believe it would have been better to distribute the $75m to a number of small businesses

I'm not sure its cronyism IMO as much as a handshake deal to try inject some cash to create an industry.

interesting to hear local reporters/tax payers shout at him to man up - they are suggesting he make the payments out of his own pocket.

Poor management and the inability to make payroll is Schilling's fault at the company, but its the governor's fault for making the risky loan.

Lucky Day said:

it was the form of a "guaranteed loan" even

the situation had its critics then with fellow Republicans who believe it would have been better to distribute the $75m to a number of small businesses

I'm not sure its cronyism IMO as much as a handshake deal to try inject some cash to create an industry.

interesting to hear local reporters/tax payers shout at him to man up - they are suggesting he make the payments out of his own pocket.

Poor management and the inability to make payroll is Schilling's fault at the company, but its the governor's fault for making the risky loan.

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First I said that I can see how this could look like cronyism, not that this was the entire Republican party (I intentionally avoided using party names because they're secondary to this story) actively pursuing something.

I didn't say anything about the political parties because this was more the personal political agenda of the former governor than something that came from within the party. The story surrounding how this deal came about does look and sound quite a bit like cronyism - political favoritism towards friends in this case. I think perhaps people presume that always carries a worse sounding meaning than it actually does - it does not necessarily imply something like outright corruption but (in this case) more of an issue of judgement.

That personal attachment had very little to do directly with other members of the Republican party so I'm not sure how either democrats or some fellow republicans opposing the bill in anyway suggests that the former governor was not supplanting desire to help a guy he liked in place of better judgment. So don't worry, saying that I can understand how some people could say this looks like cronyism is not an attack on the Republican party.

Also in this particular case it's important to note the funds were not provided for the sake of creating the company, but rather as an incentive to move the HQ to another state. 38 studios had been going for quite some time before this (in 2009 Curt Schilling cited his focus on 38 studios as one of the reasons he would not be running for Ted Kennedy's old senate seat.) I don't doubt the Governor was well meaning, but he did forsake better judgement (demonstrated by some other members of his own party despite pressure he put on pushing the deal through) for the sake of someone he viewed as a friend and whom he may have be star-struck by. This is not a particularly unusual phenomenon in democracies of course, but that does not mean these sorts of things aren't mistakes at the expense of the constituency.

don't disagree with you - I was commenting on the radio report I heard.

I'm also not commenting on Republicans in general (and I generally vote republican) as I think it clearly reflects clearly this isn't systematic but a disaster put upon by the individuals involved.

The governor's motivation was to try to lure high tech (gaming) companies to the area. It reminds of commercials during Pittsburgh Penguins games trying to keep young high tech professionals from moving to California from Pennsylvania: problem with the ad is the area didn't have any actual jobs.

Canada's efforts to become Hollywood North in Toronto, and especially in Vancouver, through incentives such as tax breaks happened gradually over time so it built an infrastructure of studios, etc. and a culture that got used to the new industry.

Sudden infusions of a single company or cash show poor planning - this was like trying to fix your economy by approving a casino in the area - but more risky, and it least it won't have the consequences.

Well it's official all employees are terminated and the studio is closed.

38 Studios and Big Huge Games have both let go of their entire staffs, a source with knowledge of the situation tells Joystiq. Following reports that 38 Studios stopped paying staff on May 1, and just an hour before a scheduled press conference in Rhode Island addressing the recent 38 Studios financial debacle, both the Providence, RI-based 38 Studios and the Baltimore, MD-based Big Huge Games are no more.

"Big Huge Games was home for my wife and me for our adult lives so far. I'll miss it terribly, but so proud. Good night and good luck," former Big Huge Games lead world designer Colin Campbell said on his Twitter account. Big Huge's latest release was the moderately successful Kingdoms of Amalur: Reckoning. The studio was picked up by 38 Studios back in 2009, and it crafted the first entry in 38's ambitious new universe: Amalur.

The recent financial tumult arose following a defaulted payment from 38 Studios to the Rhode Island state government on May 1, indicating much larger financial issues that could ultimately lead to Rhode Island taxpayers owing up to $112.6 million between 2013 and 2020. It's unclear whether today's layoffs mean 38 Studios is unable to pay back the approximately $50 million its owes Rhode Island of a planed $75 million loan. If that's the case, Rhode Island will take over ownership of the Amalur IP, valued at around $20 million.

We expect to hear more at a scheduled press conference this evening held by Rhode Island Governor Lincoln Chafee.

Update: WPRI got ahold of the internal memo to employees at 38 Studios, which reads: "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." Big Huge Games and 38 Studios collectively employed 379 full-timers as of March 15, according to the report.

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Ouch.

What a wasted opportunity. My heart goes out to those who lost their jobs over this...