Kingdoms of Amalur developer lays off entire staff

[terry107]

Major bummer, but they needed to sell 3 million copies to break even. They only sold 1.2 million copies

http://www.ign.com/articles/2012/05/24/report-38-studios-lays-off-entire-staff

 

[Stuka87]

Thats part of the problem with these big budget games. Developers take a big risk when making them.

They say they needed to sell 3 million to break even. Lets say they made 30 dollars off each copy (Selling at 60, minus seller profit, packaging, marketing, etc), that means the game cost roughly 90 million to make.

And the thing is, it wasn't a bad game. It got great reviews at most places. I think the issue was that Skyrim was released first. And most of the people that would have bought KoA, got Skyrim instead.

 

[Bateluer]

"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.

Doesn't laying off your entire staff also remove the possibility of growth as well?

Also, a 90M budget for a game is ludicrous.

 

[Phynaz]

No way does a dev ever see half of suggested retail.

 

[Stuka87]

No way does a dev ever see half of suggested retail.

Looks like you are right (Assuming the below is mostly correct):

Which still puts the budget at 27 million.

Now I am curious if this includes the original game or not. Big Huge Games was purchased by 38 Studios, and the game that BHG was working on was then changed to work for the idea of KoA, which was originally going to be an MMO.

 

[KaOTiK]

It is a shame, for the studios first title it was very well done.

 

[Wreckem]

Looks like you are right (Assuming the below is mostly correct):

Which still puts the budget at 27 million.

Now I am curious if this includes the original game or not. Big Huge Games was purchased by 38 Studios, and the game that BHG was working on was then changed to work for the idea of KoA, which was originally going to be an MMO.

Its about right overall, some numbers are off(how much retail gets, how much console makers get). Developers typically receive $10-20 per unit. KoA wasn't their undoing though. Their undoing was having 379 employees. To compare, Turbine, a well established developer who has 4 major MMO releases with multiple expansions has 389.

38Studios had way to many employees for a game development startup and no constant stream of money.

 

[Wreckem]

It is a shame, for the studios first title it was very well done.

Thats because it wasnt really a 38Studios game. It was Big Huge Games title. Big Huge Games had some quality games before KoA. Big Huge Games was owned by THQ and 38Studios acquired Big Huge Games and a nearly finished KoA for a fire-sale price. That said the game didnt come close to breaking even.

 

[Jabberrwocky]

I have been following the 38 Studios story via the Joystiq coverage. I am sorry to hear about the layoffs, but I feel even more sorry for the residents of Rhode Island who are left holding the bag.

 

[Larries]

Looks like you are right (Assuming the below is mostly correct):

Which still puts the budget at 27 million.

Now I am curious if this includes the original game or not. Big Huge Games was purchased by 38 Studios, and the game that BHG was working on was then changed to work for the idea of KoA, which was originally going to be an MMO.

What does the publisher do to take 30% of the price? (marketing is already catered to 15% separately)

 

[Markbnj]

I have been following the 38 Studios story via the Joystiq coverage. I am sorry to hear about the layoffs, but I feel even more sorry for the residents of Rhode Island who are left holding the bag.

Yeah that is exactly what government should be doing with tax payer dollars: investing in new video game developers.

 

[Stuka87]

I have been following the 38 Studios story via the Joystiq coverage. I am sorry to hear about the layoffs, but I feel even more sorry for the residents of Rhode Island who are left holding the bag.

Wait a second here...

The state government issues bonds to a private company? And not a private company such as a Utility company or the like, but a video game development company that had never produced a single game?

Looking more into this whole thing, I am not surprised that the game was way over budget. They took a game that was well under development, and then decided to change it pretty drastically. This will always incur huge budget increases. It can actually double the cost to develop the software in some cases. And add the fact that they had as many employees as they did shows that the company was just poorly managed.

I feel extremely sorry for the employees, but the people running 38 Studios should never try and run a company again. IE: The CEO, CFO, and Curt Schilling. And it looks like the state knew something was going on when their scheduled payment check bounced.

 

[BudAshes]

Isn't this the company curt schilling owned?

 

[Wreckem]

Isn't this the company curt schilling owned?

Yes

 

[Wreckem]

Wait a second here...

The state government issues bonds to a private company? And not a private company such as a Utility company or the like, but a video game development company that had never produced a single game?

Looking more into this whole thing, I am not surprised that the game was way over budget. They took a game that was well under development, and then decided to change it pretty drastically. This will always incur huge budget increases. It can actually double the cost to develop the software in some cases. And add the fact that they had as many employees as they did shows that the company was just poorly managed.

I feel extremely sorry for the employees, but the people running 38 Studios should never try and run a company again. IE: The CEO, CFO, and Curt Schilling. And it looks like the state knew something was going on when their scheduled payment check bounced.

They weren't bonds. RI, as an incentive to get 38Studios to move to RI from Boston, garuanteed $75million in loans to 38Studios. 38Studios only received $50million before all this mess. But RI is on the hook for all the principle and interest, a total of $112million. If 38 folds which looks likely, RI gets the rights to any and all the IP 38 owns plus all the code and other intangible assets related. The estimate the value of all this is $20million but its not going to go for that much. Id be surprised if they can even get $5million for it.

 

[Wreckem]

What does the publisher do to take 30% of the price? (marketing is already catered to 15% separately)

Depends.

Sometimes studios have funding, distribution, and marketing deals with the publishers. Other times is just distribution and marketing. Sometimes its just distribution.

 

[Craig234]

Yeah that is exactly what government should be doing with tax payer dollars: investing in new video game developers.

That's the Republican 'business friendly' politics they want, states competing to give businesses the most tax breaks and subsidies to locate there - gut other spending.

It's a sad story to see, it could have a chilling effect on other RPG publishers.

It'd be nice to see some limits put in place on states competing this way.

We see it all the time - forgiving taxes, guaranteed loans, building infrastructure from buildings to roads and utilities, and more. Just saw one giving $150,000 per job.

 

[Craig234]

nm

 

[The Boston Dangler]

fuck curt schilling. after he could no longer squeeze any more out of "business-hostile liberals" in massachusetts, he threatened to move to rhode island. "fine, gtfo." was the reaction. now i suppose r.i. is to blame for not handing over every penny they had.

asshole.

 

[CPA]

That's the Republican 'business friendly' politics they want, states competing to give businesses the most tax breaks and subsidies to locate there - gut other spending.

It's a sad story to see, it could have a chilling effect on other RPG publishers.

It'd be nice to see some limits put in place on states competing this way.

We see it all the time - forgiving taxes, guaranteed loans, building infrastructure from buildings to roads and utilities, and more. Just saw one giving $150,000 per job.

Leave up to you to make this political. You know it happens on both sides, but you just couldn't be straight about it, could you.

 

[Soundmanred]

That's a shame. I enjoyed KoAmalur more than Skyrim.

 

[Anubis]

yea it does suck, i loved the game

 

[rivethead]

$9 each game for marketing. Are you shitting me?

That's part of the problem right there.

Instead of paying $9/game for ads in gaming magazines, tv, banner ads, signs in Best Buy, etc. they should just produce demos of the game and distribute them on the various major delivery platforms like Steam, Origin, etc (as well as the company's site).

If the game is worth a shit, word of mouth and reviews will take care of the rest.

All IMHO, of course.

 

[Phynaz]

What does the publisher do to take 30% of the price? (marketing is already catered to 15% separately)

http://en.wikipedia.org/wiki/Video_game_publisher

 

[The Boston Dangler]

Leave up to you to make this political. You know it happens on both sides, but you just couldn't be straight about it, could you.

it's curt schilling that made this political - first with right-wing public tirades and then by (astonishingly, hypocritically) demanding tax breaks with an ultimatum. mass was very much correct to tell him to get fucked, since in the unlikely event of him actually shipping a product it would totally flop. he then moved to his desired "business-friendly" atmosphere, struggled to acquire something he could shit out with his name on it, and left r.i. taxpayers $112,000,000 in the hole.

if he were a democrat, i'm certain you and your friends would be jumping up and down right now.