Video game subsidies
Former Red Sox pitcher Curt Schilling's failed effort to break into the video game industry may end up costing Rhode Island taxpayers millions of dollars.
In 2010 Schilling's fledgling game company 38 Studios received a $75 million loan guarantee from Rhode Island's Economic Development Corporation. 38 Studios had no publishing history at the time but was developing Kingdoms of Amalur: Reckoning, a fantasy role-playing game. The company used the subsidy to move its staff from Massachusetts to Rhode Island and to help fund an online multiplayer sequel, all in the name of job creation.
Kingdoms of Amalur was released in February and had sold 330,000 copies by March, according to game industry figures. That number rose to 1.2 million after 90 days on the market, according to 38 Studios.
But revenue from the game proved insufficient. By May, 38 Studios was no longer able to make payments on its state-guaranteed loan. A public scandal erupted as 38 Studios laid off its employees, closed shop in May, and filed for bankruptcy in June. Schilling blamed Gov. Lincoln Chafee for publicly speaking about the company's troubles and scaring potential investors away. The state has launched an investigation into company finances as it tries to determine how much the studio's collapse will cost taxpayers.