Things are going from bad to worse for 38 Studios and its employees. On Thursday a company representative hand-delivered a check for the $1.1 million payment May 1 to the Rhode Island Economic Development Corporation, but the company then said that it didn’t have the money in the bank to cover the check.
Where the company goes from here is unknown, but it is asking the state for more money. Many politicians in Rhode Island don’t want to invest any more money into 38 Studios, but even Governor Chaffee admits that it is in the best interest of the state to do what it can.
According to an earlier report by GamePolitics.com, 38 Studios borrowed $75 million for their studio and the making of Kingdoms of Amalur: Reckoning and their MMO. Why the fuck anyone would bother making an MMO in this day and age I have no idea. If you are a massively successful company like Blizzard or EA with vast resources, then the risk and cost of running an MMO makes sense. Sure, there are smaller companies who make MMOs, but it’s an extremely heavy investment that is likely to not pay off. KoA: Reckoning was a pretty good hit sales wise. The game can be considered a success and yet 38 Studios looks like it’s about to fold.
This is reminiscent of the Team Bondi situation. They released one game and then immediately went belly up. The game was L.A. Noire, a game that I liked. Team Bondi was badly mismanaged and the only reason L.A. Noire ever got released was probably due to the intervention of Rockstar. If what happened to Team Bondi and what is happening with 38 Studios starts to become a trend, then the video game industry might be in trouble. The cost of making major, AAA releases is skyrocketing while consumer interest may be going down. This is not good for the health of the game industry. Sure it’s one month without any interesting releases, but as more gamers get fed up with bad policies, DRM and poorly thought out DLC, video games as a hobby is starting to become more expensive and more trouble than it may be worth.
Add to the situation that there are many publishers and developers who want to eliminate the used game market and you have big trouble for the game industry. Publishers are anxious to get on board all digital releases but for the completely wrong reasons. They are dreaming of the days when they will control the development, marketing and distribution of their games to an almost Orwellian degree and developers are lining up beside them in support. What this means is that game developers and publishers are really fucking stupid, having no idea of what king of Pandora’s Box they are about to open on themselves. I’m not talking about angry gamers review bombing on Metacritic either. Developers and publishers will long for those days when that was the most severe backlash they received for their greedy, idiotic decisions. I’m talking antitrust and price fixing violations hitting the industry at a time when it’s at its weakest. I have a bit more research to do, but I’ll go in depth on one of the possible futures of the game industry.