Government Spending

QQ Rhode Island Noobs: You Paid $75 Million for Failed Game Company

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Mighty Curt Schilling has struck out.

I'll show YOU cutbacks!

The former Red Sox pitcher's video game company, 38 Studios, laid off all its staff today, shutting down its Rhode Island and Maryland offices, Brian Crecente reports for Polygon.

The company's failure may well leave Rhode Island taxpayers on the hook for the $75 million loan given to them by the Rhode Island Economic Development Corporation to lure them to move there from Massachusetts, even though the company had yet to actually release a game at the time:

The news came as a surprise to nearly everyone involved, including the state of Rhode Island and Governor Lincoln Chafee who during an afternoon press conference said that as of this morning they hadn't heard a word about possible layoffs or a closure.

During the evening press conference Chafee attributed the sudden studio closure and financial plummet to their first game, Age of Amalur: Reckoning, which he said "failed."

"The game failed," he said. "The game failed. That was integral to the success of the company."

He told reporters that experts told them it would have had to sell 3 million copies to break even. Schilling has said that the game sold about 1.2 million copies in its first 90 days.

Chafee said that despite the company layoffs and shutdown, he's hoping somehow to get it back on its feet (insert gamer joke about not bringing any healers to the party here):

If the 38 Studios remains closed, the state says it has the money to make the first year of payments on the loan from a reserve they set aside pulled out of the loan amount. But after that the state would then have to start making the payments to the bank.

'We do have some time," a state official told reporters during today's press conference. "There wouldn't be a debt service default within the year."

According to Crecente's report, a number of officials at the Rhode Island Economic Development Corporation have either resigned over the disaster or have asked not to be reappointed.

As we reported previously, the loan was not for the game that was actually released. It was for the building of a Massively Multiplayer Online Game (MMOG) that will now likely never see the light of day. But they did release a video flyover of the world they were creating:

Pretty, but yeah, another fantasy RPG clone corpse (with no loot) littering the videogame landscape, this time paid for with the public's money.