38 Studios - In Financial Trouble?

The Providence Journal is reporting comments from Rhode Island Governor Chafee that cast doubt on the financial position of 38 Studios. Apparently the Governor met with 38 Studios to discuss the security of a $75M government loan to the studio:

Reached Sunday, the governor said "it has been a weekend of work on this subject."
While the governor would not discuss details of the meetings with 38 Studios officials, he said there is a "tight timeframe we're working under."
"We're doing everything possible, like I would for any Rhode Island company," he said Monday afternoon at the State House, adding that the work at stake is "keeping 38 Studios solvent."

WPRI.com goes on to look at other sources and also cites NPD data apparently showing 410,000 sales at US retail, a modest but solid number when you consider international and digital sales:

“Kingdoms of Amalur: Reckoning,” the first game from Curt Schilling’s Providence-based 38 Studios, sold another 80,000 copies in the United States last month, WPRI.com has confirmed.
That brings total U.S. retail sales of “Reckoning” to 410,000 copies during its first two months on the market, according to data provided to WPRI.com by NPD Group, a New York-based research firm.

More information.

lol ? 75M ?

no real surprise here, it wasnt started as an MMO = no constant revenue stream, no supporting books written before to drive the basis of the storyline, so on and so forth. Plus toss in a rich guy who was good at baseball, sure he did OK with some xbox live games, but that doesnt mean instant success with a semi-nitch genre.

410,000 seems kind of low considering the hype machine they had going for KoA.

I thought the game was average at best, but I figured they would sell more than that just based on the amount of advertising.

Explains why there is no patch. I REALLY hope they don't take a government loan.

Seems like an abject failure to me. Crpgs need way more sales than other games because of the development time and the size of the team. However, it could just be that the game sold 3 million digitally or something but the -75 million would seem to indicate that it didn't or someone was embezzling funds. Time will tell.

I wonder how much the art style of the game turned people off? I have to admit, after playing the demo, i couldn't get passed the art style of the game.

Originally Posted by crpgnut
Seems like an abject failure to me. Crpgs need way more sales than other games because of the development time and the size of the team. However, it could just be that the game sold 3 million digitally or something but the -75 million would seem to indicate that it didn't or someone was embezzling funds. Time will tell.

The amount probably has something to do with their MMO they're developing.

I wonder how much releasing so close to Skyrim affected their numbers. Skyrim is still being played heavily today. At any given time, 27,000 people are logged into the game 6 months after release. The numbers in February were closer to 80,000 if I remember correctly. That had to hurt the botton line. My guess from this report is that they had to release the game when they did to start paying the bills. Who knows?

@Skaven-I'd forgotten that little piece of the equation. I guess they were thinking that Reckoning would help pay for the MMO and it didn't sell enough to keep them in the black.

Originally Posted by crpgnut
I wonder how much releasing so close to Skyrim affected their numbers. Skyrim is still being played heavily today. At any given time, 27,000 people are logged into the game 6 months after release.

And still selling, it's never been off the top 10 sellers list in Steam every time I've looked.

Originally Posted by TheMadGamer
I REALLY hope they don't take a government loan.

I second that, from the perspective that I hope the state does not offer them one.. In a difficult financial time, when so many local governments are poormouthing — laying off govt. employees and/or cutting their hours and benefits —I find it startling that Rhode Island is so seriously considering such a large loan to such a risky venture as an upstart video-game studio. I don't specifically know about Rhode Island, but I know the state I live in has done plenty of all those things.

I am aware of the flipside of the argument (preserving local white-collar jobs, etc.), but how many
people does the studio really employ? Regardless of the number, I would find it wholly rresponsible of Rhode Island to place so many of the tax dollars of its financially suffering citizens at such great risk. It is no wonder so few Americans, incouding myself, have so little confidence in our representatives.

Well apparently the gross income from Reckoning wasn't enough to fund the mmo. I wish them let luck but it wasn't my favorite game.

As for the loan who cares the US blows away millions everyday.

Originally Posted by Couchpotato
As for the loan who cares the US blows away millions everyday.

Well, some of us here (like me) care.

Originally Posted by TheMadGamer
Well, some of us here (like me) care.

Well welcome to politics and governments throughout the ages. They all waste money. It's not going to change anytime soon.

The Greek city states and Roman Republic/Empire had the same problems. I think we have more serious problems than national spending.

Anyway this is getting off topic so moving on.

Originally Posted by Couchpotato
Well welcome to politics and governments throughout the ages. They all waste money. It's not going to change anytime soon.

The Greek city states and Roman Republic/Empire had the same problems.

The government wastes money. Someone should look into that.

Originally Posted by sakichop
The government wastes money. Someone should look into that.

I know it's such a large problem and shocking right?

And people and corporations don't?

Nobody "wasted" money. Yes, hindsight is 20/20, but at the time Rhode Island took a risk on an upcoming company that had high aspirations. It looks like it's not working out. Doesn't matter, I would still have let the loan go through if I was in charge, because you have to take risks on upstart companies in order to fuel the economy. This is sad, because I had high hopes for the Amalur universe. I really liked Reckoning and this whole thing is sad to me because we could possibly lose another company that develops RPGs. It's a loss for anyone who enjoys RPGs. Even if you didn't enjoy Reckoning that much, the potential for a better sequel was there. This just sucks really. Hope it works out for those guys.

Originally Posted by Thrasher
And people and corporations don't?

Yes we all do and it's not going to change now is it? Some people make crusades out of minor things.

Originally Posted by Fluent
Nobody "wasted" money. Yes, hindsight is 20/20, but at the time Rhode Island took a risk on an upcoming company that had high aspirations. It looks like it's not working out. Doesn't matter, I would still have let the loan go through if I was in charge, because you have to take risks on upstart companies in order to fuel the economy. This is sad, because I had high hopes for the Amalur universe. I really liked Reckoning and this whole thing is sad to me because we could possibly lose another company that develops RPGs. It's a loss for anyone who enjoys RPGs. Even if you didn't enjoy Reckoning that much, the potential for a better sequel was there. This just sucks really. Hope it works out for those guys.

They wont be the first business to close due to having goals they can't meet. I agree it will be sad and I'm one who didn't enjoy there game.

Wow agreed that its surprising with all the hype that this did not sell more. I bought it but didn't care for it much.

I never understood why they didnt do more to promote the world, things like having Salvatore release some novels ahead of the games release to get people into the world.

Also hated the WOW graphics.