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.

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jimmyhandsome
jimmyhandsome
8 years ago

Sad for the employees that bought into his BS sales pitch of working for him. Not sad for Schilling though. You took a huge risk by putting all his eggs in one basket and lost. Sorry if that seems harsh, but Schilling is one of the most arrogant loud mouths that is very quick to criticize anyone and everyone.

Definition of irony/hypocrisy: a blow-hard conservative that constantly chastises government spending, receives a gov't loan, blows right through it with a shoddy business plan, then takes cheap shots at the gov't for not bailing out his business via tax credits/loan renegotiation.

Temjin001
Temjin001
8 years ago

Hey! He was really good at playing MMORPG's
That's probably how kojima got to where they are today
=p

Ben Dutka PSXE
Ben Dutka PSXE
8 years ago

Based on the interviews I've heard, I don't see a lot of Schilling taking cheap shots at anyone.

oONewcloudOo
oONewcloudOo
8 years ago

God, this makes me want to run out and buy the game.

In retrospect it probably wasn't a good idea to do a massive scale RPG as there first game.

Ydobon
Ydobon
8 years ago

After I heard they were having money problems. I went and bought both of their expansions right away. Seems like it didn't help because they officially went bankrupt on my birthday =(.

I have a lot of constructive criticism towards that game, but darn it. That doesn't mean I didn't love playing it or enjoy it.

Underdog15
Underdog15
8 years ago

I think the issue is that the business was run by someone who doesn't know how to properly run a business. There will likely be some fraud charges coming.

Excellent staff, good vision, good game… but they handled business abysmally. There's a reason the state won't help them.

Beamboom
Beamboom
8 years ago

That's exactly my impression too, Underdog.

WorldEndsWithMe
WorldEndsWithMe
8 years ago

🙁

wackazoa
wackazoa
8 years ago

Maybe he shouldn't have given the bloody sock to the Hall o Fame. Should've sold it to Ben Affleck or something so he'd have a retirement.

wackazoa
wackazoa
8 years ago

I am still miffed as to why it cost so damn much to make a game though…..

Maybe thats where this whole thing should be debated.

WorldEndsWithMe
WorldEndsWithMe
8 years ago

Yeah it Kingdoms shouldn't have cost that much by the look of it. Probably paid too much to the writer (forget his name) and Todd MacFarlane.

TheAgingHipster
TheAgingHipster
8 years ago

The author is R.A. Salvatore. His involvement was the main reason I first became interested in the game.

WorldEndsWithMe
WorldEndsWithMe
8 years ago

Did he live up to expectations?

Comic Shaman
Comic Shaman
8 years ago

I would say Salvatore's contributions were worthwhile. There were some good concepts in the game and, though I haven't finished it yet, there seems to be the foundations of a good story.

I doubt it was Salvatore that capsized the budget on this one. Not many writers can command seven-or -eight figure paychecks.

frylock25
frylock25
8 years ago

just cuz you can throw a ball doesnt mean you can lead a company.

WorldEndsWithMe
WorldEndsWithMe
8 years ago

Well he likes games. He just turned out to be a horrible money manager.

leatherface
leatherface
8 years ago

Curt's the Billy Buckner of the video game industry.

Excelsior1
Excelsior1
8 years ago

What a complete disaster. I have read on CVG that some of the higher level employees took out second loans on their homes and the FBI is investigating 38. Wow.

I also heard they were working on a mmorpg and a Reckoning sequel at the same time. Sounds like they blew their wad on development costs because they had a p!ss poor bussiness model.

The console and gaming business is pretty dynamic and can be extremely brutal. Any company without a lot of capital to fall back on when they make a mistake is at risk. Even the big companies are not immune to a serious erosion in marketshare or capital when they stumble.

Pyramid
Pyramid
8 years ago

U want to help? Go buy the game new and blame Gamestop. I gonna do it asap and because i read is a good game too.

frylock25
frylock25
8 years ago

that wont help now

jugheadjones
jugheadjones
8 years ago

Now, I read that he has made over $100 million in his career, and he spent $50 mil of his own money, and he is tapped out? Wouldn't he still have in excess of $50 mil left? Guess he is as good a personal financial planner as he is a businessman.

___________
___________
8 years ago

makes me wonder if hes really truly genuine, or just putting on the act.
either A hes a cunning slick and just took the company for a ride.
or B he really did put his heart and soul into the company, and is a complete freaking moron!
i mean who in their right mind would put a company through so much expense?
i know im going to spend a gazillion dollars making my first supercar and just to break even it will have to out sell Ferrari, lambo, jaguar, aston and mercades put together!
i mean seriously!
just seems like he had WAY too high expectations for kingdoms.
sounds like someone looked at COD, and for some reason thought every game sells that well!
he forgot to look at enslaved………..

what boggles my mind is where did all the money go?
in their MMO?
because it sure as hell did not go into kingdoms!
they could not of made it feel like a cheaper rush job if their lives depended on it!
so where did all the money go?

GuernicaReborn
GuernicaReborn
8 years ago

It's really unfortunate that this company didn't survive. If a start-up had made an RPG as their first game and succeeded during this generation and current economy, it could have served as a blueprint for other ambitious developers to do the same.

Of course, it could just serve as a lesson to everyone regarding what happens when you can't properly run your business or control your spending.

Jotun
Jotun
8 years ago

Curt Schilling is a lying piece of crap. I live in Boston, have all my life and I even applied to a job at 38 studios before they left the state. Thank god I didn't get it.

Anyone defending Schilling is missing a lot of the story. First off, he's lying about the 50 million. Once the investigation into his finances is complete, we'll see this. The original number stated was that he put around 6 million in and took it back already. Second, he lied about the sales. The official sales numbers put it around 4-500k copies sold while he told the media they sold over 3 million. That is 100% false. Third, he owes over 100!!! creditors anywhere from 100-500 million in funds loaned to him.

He played the governor of RI for a fool and essentially was a good salesman because he sold a product he has no business developing to people who don't understand the market AT ALL. He didn't have any idea the costs in having a team that huge work on a game that long and how many copies he'd have to sell just to break even. They didn't even get close but he continues to blame others for his lack of understanding.

The best rpgs barelly break 1 million in sales(Skyrim, FF, and others are the big ones, startups certainly don't). Not only that, he hired a team that was waaaaay too huge and unneeded for this kind of game. He hired big names in storytelling and crap trying to get the names to sell the game and it didn't. They made a good game, not great, but it could have been done by much less experienced people with less than 25% of the costs.

He is basicly one of those people who did one thing one time(played WoW) and loved it and his delusions of granduer told him that he could create something just as great(we have all met these kinds of people…non-artists who dream of being artists).

Oh yes, one final detail. His company was supposed to cover the process and costs of moving from MA to RI for all employees who owned houses in MA. It came out a few weeks ago that those employees just recieved letters from their mortgage companies asking why they haven't been paying their mortgage. So Schilling's grandeous company essentially just wrecked the credit of those employees for the next 5-10 years as well because they didn't do what they pormised there either.

Yeah, this guy deserves pitty. He is a complete fool and deserves to burn for this.


Last edited by Jotun on 6/24/2012 3:23:16 PM