38 Studios produced a solid RPG that sold relatively well. And yet, they're now bankrupt.
And in his first interview since the company went downhill, founder and ex-Red Sox pitcher Curt Schilling spoke to The Boston Globe about how he sunk everything he had into the studio. If you don't feel like being depressed, you might not want to read any farther.
Schilling says he invested $50 million into the company, plus $5 – $10 million from other investors and a $75 million loan guarantee from the state of Rhode Island (which got the company to move to Providence). But all that just wasn't enough to keep the team running as it worked on its highly anticipated MMORPG Copernicus , which was slated for a June 2013 release. Now, with 38 Studios filing for Chapter 7 bankruptcy, all of its employees (around 400) have been laid off, and the company still owes money to over 1,000 people and companies. In all, the debt is over $150 million.
And now, Schilling is "tapped out."
"I put everything in my name in this company. I believed in it. I believed in what we built. I never took a penny in salary. I never took a penny for anything."
He says he isn't looking for sympathy, but he could be on the hook for some of those losses. He added that he told his family last month that the money he earned playing baseball "was probably all gone" and "life is going to be different." Schilling also feels bad about how the employees found out; via email after everyone realized they weren't getting paid.
"The employees got blindsided. They have every right to be upset. I always told everybody if something were going to happen, you‘re going to have a month or two of lead time, and I bombed on that one in epic fashion."
The company apparently folded quickly. Schilling said the company "was on the verge of signing a deal with a major video game publisher worth as much as $35 million" for a sequel to Kingdoms of Amalur: Reckoning . But that deal went south after the publisher in question (possibly EA), learned about the company's financial difficulties. Lastly, Schilling said 38 Studios didn't immediately see any money from the Reckoning sales, as a lot of it had to be used to pay back EA.
The developer had one last chance of sticking around, as one investor said he'd write a check for $15 – $20 million, provided the state of Rhode Island agreed to give the company $6 million in tax credits to renegotiate the loan guarantee, so the investor would be first in line to be repaid. Schilling said if that had gone through, the company would've been saved. But the state refused the idea.
'sigh' It's just sad.