If there is one thing that keeps getting driven home these days it’s that even a success like Kingdoms of Amalur: Reckoning might not mean a studio is set up for life. According to the Boston Herald, Curt Schilling’s 38 Studios may be having some serious financial trouble.
According the story, the state’s Governor, Lincoln Chafee, was working with management over the weekend to keep “38 Studios solvent.” Now, you might be asking yourself why the state’s leading official is handling this matter himself. He’s got a lot on the line, as 38 Studios moved shop from Massachusetts in 2011 on the promise of a $75 million loan. $50 million of that has been drawn down to date. For a Governor only in the second year of his first term, this could be a serious political black eye, not to mention the impact on the state’s residents.
The loan is being used largely to fund the studio’s second game. Sales for Kindgoms of Amalur: Reckoning have crossed the 400,000 unit threshold since the game’s February release, which does not include digital sales through EA’s own Origin platform or Steam.
Looking at the bigger picture, this isn’t just bad for 38 Studios, EA and the State of Rhode Island. It’s horrible for the reputation of the industry. Right now, we’re on track for revenues falling short of 2006, the first full cycle in the current console generation. Should 38 Studios fail completely (or find itself unable to pay back the loan), it could serve as a cautionary tale for other states who would otherwise be happy to attract large, new developers through tax and loan incentives.