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Big Huge Games and 38 Studios close, lay off staffs

The saga of 38 Studios over the last two weeks has been long and winding. The embattled studio made headlines last week when it was revealed that they were going to have trouble making their loan payments.

Now, reports indicate that the company has laid off its entire staff after witholding paychecks since April 30th. The revelation came from an employee testimony shortly after 38 announced the closure of Rise of Nations developer Big Huge Games, which was acquired by 38 Studios after a bankruptcy scare in 2009.

Kotaku received an email from an anonymous 38 Studios employee today shedding some light on working conditions at the company:

"38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered.

We have not received a paycheck since April 30th.

On May 15th, we found out we were not getting paid when our checks did not hit our accounts.

Our medical insurance runs out tonight at midnight.

We found this out when an employee's pregnant wife was told by her doctor, this was on Tuesday 22nd May this week.

The company has not communicated anything concrete to the team throughout this process, leaving team members to figure out insurance stop-gaps (where people could afford it), etc. on their own."

These specific details are anonymous and as-yet still not completely verified by an official source.

17 comments

  • gazzc - May 27, 2012 9:06 a.m.

    I still don't know where all that money went. What was it? a $75 million loan and another $30 million of Kurts own money.... how do they spend $105 million on 1 game? Not even the biggest games of last year spent anywhere near that.
  • Craza - May 24, 2012 9:40 p.m.

    Man, if they had released another Rise of Nations game, I would have bought enough to keep their whole company in business! A real shame though, they have some great games to their name. (That was a weird little rhyme...)
  • joerevs300 - May 24, 2012 6:34 p.m.

    Here's another update: "In a press conference this afternoon, Rhode Island governor Lincoln Chafee said that the studio needed to sell three million copies of Kingdoms of Amalur: Reckoning in order to break even, but the game ultimately sold 1.2 million. "The game failed," he added." Interesting. So we now know that for a A-list game, 1.2 million sold is now a failure. Which is even more bad news for the smaller devs.
  • samsneeze - May 24, 2012 6:46 p.m.

    It's only a failure if you overexert yourself. Breaking even and making a profit is what it was all about, not just a whole bunch of sales.
  • joerevs300 - May 24, 2012 6:31 p.m.

    It essentially tried to go up against Skyrim, an established franchise (though it was released a few months later). This is like the Battleship movie going up against the Avengers, it literally had no chance. This isn't the 1980's NES era anymore, where you could take chances because games didn't cost tens of millions of dollars to produce. Now, you better either release through an established publisher or studio, or you're going "all in" no matter what you decide to do. This is VERY bad for the video game industry, make no bones about it. Unless the smaller companies are developing through PSN/Xbox Live or iOS, it's a huge risk to try anything else, something that will just get more exasperated in the next console cycle. All this being said, unless it comes out otherwise, I don't think there was malicious intent involved with not paying employees. I think they were hoping someone would step in and bail them out, give them another shot. But as several have said, selling 330,000 with all the firepower they had in this game, isn't going to cut it. My thoughts and prayers are with those who just got laid off (especially the guy whose wife was pregnant), and that they find another opportunity quickly.
  • closer2192 - May 24, 2012 5:58 p.m.

    Imagine that, a game company that released one game in 6 years and only moved 330,000 units folded. Who could have possibly seen this coming?
  • DLH570 - May 24, 2012 4:19 p.m.

    I planned on buying the DLC sometime this summer. Would the studios closing affect the DLC's availability on the Xbox Live Marketplace? Just wondering if I should plan on downloading those soon...
  • wingsdjy - May 24, 2012 5:24 p.m.

    That seems like a minute thing to worry about at this point. Best wishes to those who were unceremoniously laid off.
  • DLH570 - May 24, 2012 6:02 p.m.

    I didn't say I don't care about those laid off. I really enjoyed Amalur, so of course I wish the best for those who devoted hours of their life to creating it. I'm just wondering how long the fruits of their labor will be available for fans to enjoy.
  • jimbobmcclan - May 24, 2012 3:18 p.m.

    This is the jerk that was screaming about businesses should stand on their own and then cried for tax payer subsidies. Sorry about those that are doing the grunt work but Curt Schilling can die in fire.
  • ParagonT - May 25, 2012 5:41 a.m.

    Agreed.
  • ThundaGawd - May 24, 2012 3:07 p.m.

    This type of behavior makes me sick, what kind of selfish-minded asshole refuses to pay his employees, then fires every last one of them when they start to push for their payment (besides every other selfish-minded asshole in the gaming industry)? Seriously, that guy who's wife is pregnant might not even survive the year, if he has to scrounge together enough money to get his wife in the hospital for when the child is born, there's a very large chance he'll end up on the streets unless he can immediately find anther job with a decent pay. I hope to god this prick gets his ass sued by his employees. This is WAY too similar to the Activision vs. Infinityward event a few years ago
  • avantguardian - May 24, 2012 4:33 p.m.

    thankfully, the reality of these things isn't as bad as you make it out to be. there are far more children born into poverty than not, and most of 'em end up just fine. welfare/unemployment/credit cards may not be ideal, but they do their jobs well enough. that said, it's still a damn shame. i rented amalur, and like it enough to pick it up, but it's still $50 on amazon. i got BOTH ssx and ff13 2 instead.
  • RedHarlow - May 24, 2012 2:29 p.m.

    Curt Schilling probably has an obscene amount of personal cash. I'm sure he easily has $1.125 laying around to pay off their missed loan.
  • RedHarlow - May 24, 2012 2:30 p.m.

    1.125 million that is.
  • Darkhawk - May 24, 2012 2:21 p.m.

    You should probably mention somewhere in the article that these are the guys behind the 330,000-selling Kingdoms of Amalur. (No, a tiny screencap doesn't count.) This kind of corporate behaviour really makes me sick. Hell, Curt Schilling could probably reach in his back pocket to pay out employees' last few weeks.
  • FOZ - May 24, 2012 2:16 p.m.

    Somebody needs to compile the events to make sense of all these 38 studios stories. How much money did this company spend for nothing?

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