38 Studios - How to fuck up and run off with 75 million

Remember Kingdoms of Amalur? How I said if the game flops the city of Rhode Island would have to pay for it? Well its exactly what happened. Somehow they convinced Rhode Island to lend them 75 million but thats not all, they will also cover the loan if they somehow defaulted it. How did they even fuck this up so badly. Well for starters they invested all of the money into a new IP not knowing whether it will even be good. Somehow they figured people would like it enough to support novels, comics, a MMO, and an action rpg all at once. ALL AT ONCE. They decided to do them all at the same time. There was even a sequel for KoA2 in the making, while the MMO is coming out soon in 2013. Soon eh? Its pretty hard to finish a MMO when you fired over 300 employees and aren't paying them.

The problem is the game did alright, it wasn't great and it wasn't as popular as they have expected. In fact they needed more than double break even. Then they sunk everything into a mmo and a sequel and ran out of money before they were even done. They were making games to make money. While everyone does it to make money, they have no idea how to make money and think that if you throw enough big names into it then they'll make enough money to fund the rest of the games they are working on simultaneously. Not just that the company is going to die, the taxpayers have to bail them out, R.A. Salvatore gets to run off with 5 million fucking dollars.

http://www.golocalprov.com/politics/donna-perry-taxpayers-are-owed-transparent-answers-by-the-edc/

Now I know why they couldn't break even. Fucking dick runs off with all the money. They needed to sell over 3 million copies to have enough money to fund their MMO. How the fuck do they expect a new IP to sell over 3 million? Are they completely fucking retarded? But they are not the biggest bunch of idiots, the people at Rhode Island who gave them the loan is. 75 million with no downside if they collapse and fail? Win win situation for them to fuck around. They did and they failed. Way to go.

And just recently they completely died firing all their employees and closing down their studios.

http://www.theverge.com/gaming/2012/5/24/3041662/38-studios-lays-off-entire-staff

Now all their employees are fucked, out of a job and Curt Schilling, the multi-millionaire baseball guy who founded the company used the money from the company to pay off a personal loan and then walked without having to pay a single cent.

According to the report, when 38 Studios moved from Massachusetts to Rhode Island in 2010, it offered employees a relocation program that would see the company sell their old homes for them. However, "some" employees received notice from banks this week that they had missed mortgage payments on their old homes, at least one of which 38 Studios told the owner employee it had sold last year. An unspecified 38 Studios official told the site that it was trying to resolve the situation.


http://www.gamespot.com/news/collapse-of-38-studios-sticks-some-devs-with-second-mortgage-6378649

Talk about fucking over their employees even more. This is the most infuriating thing about this whole ordeal. The people in charge walk away with money in their pockets while everyone else pays for it. They claimed they did extensive research and that MMOs rake in money. So they wanted to make a MMO without any idea on how well KoA would do. That just isn't true.

http://users.telenet.be/mmodata/Charts/Subs-1.png
http://users.telenet.be/mmodata/Charts/Subs-2.png

MMOs die off fast and when they do they usually take half the company if not all with them. They are risking all 100% of the MMO by funding it with money they will earn from KoA which they need to sell over 3 million copies at full price. And no one thought this was a bad idea?