25 May

The entirety of 38 Studios – and its Maryland subsidiary Big Huge Games – was laid off today, the blame for the company’s history of financial problems placed in part on the failure of the studio’s RPG Kingdoms of Amalur: Reckoning to move the necessary 3 million units to cover production costs. Financial returns place Reckoning‘s total figures currently at 1.2 million units. “The game failed.” Rhode Island Governor Lincoln Chafee noted in an evening press conference, “That was integral to the success of the company.” This was Governor Chafee’s second press conference concerning the studio in as many days.

The move came as a sudden shock to employees, who all received the same message earlier today before internal servers were shut down (via WPRI):

“The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.”

Despite all of the troubles plaguing the studio, Governor Chafee’s office promised to do everything in its power to make the company solvent. Should 38 Studios suffer a full closure, Rhode Island taxpayers will be left with $112.6 million in debt, due to the company’s original $75 million loan agreement and its interest. “‘We do have some time…there wouldn’t be a debt service default within the year,” a state official told reporters during tonight’s conference. No word was mentioned about the fate of 38 Studio’s MMO “Project Copernicus”, which the Governor gave a June 2013 release date for earlier in the week.

A resolution has since been introduced by a group of state lawmakers demanding a full release of all information pertaining to the “financial situation and seventy-five million dollar loan guarantee.” A formal investigation into the studio and its fiscal history is currently being planned. The trouble has Rhode Island weighing the possibility of changing some of the rules regarding the state’s Economic Development Corporation, the entity responsible for the drafting of the loan agreement.

(via The Verge)