Posted this in the KoA thread, but figured it might deserve a thread of its own, depending on how it goes. Anyway - copy-pasta:

Studio 38 may have some financial problems, but they just announced a new MMO to be released in June 2013, Project Copernicus

[url=http://kotaku.com/5911594/a-first-look-at-the-kingdoms-of-amalur-studios-new-mmo ]http://kotaku.com/5911594/a-first-look-at-the-kingdoms-of-amalur-studios-new-mmo [/url]

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They're going to be lucky to stay out of receivership, where are they going to get funding for this? They just defaulted on 100 million USD loan to the state government...

And if I understand it correctly, the MMO is based on the KoA IP, so if they are forced to sell it of then there is nothing left to salvage...

They haven't a hope. You need serious capital to make an MMO succeed. EA's current troubles with Old Republic highlight this, as it's going to take a lot of additional content to win people back - already! How are Studio 38 going to manage that exactly?

The thing that really gets me about all the news sites loosing their minds over this like it's the next OJ Simpson trial; Rhode Island has got about 1 million people living in it.

worst case scenario is that 38 closes and they gotta pay back the 100-ish mill ... split between a million people!

no one ever wants to pay extra taxes, and covering the expenses of paying back the loan plus interest would take something like 10 years, but it would also be something like an extra $1 a month on peoples state taxes.

Boo, Fucking, Hoo

A MMO? Next they'll announce a couple of IPad and Facebook games, I'm sure.

sorta .... they couldn't make the 1 mill payment that was due, so it went into collections. but that would have fucked the state along with 38 studios, more because it would have put allot of people out of work.

so the state stopped the account from going into collections, and 38 scrounged up the money it needed to cover the check. the next bill isn't due till next year so 38 is out from under the gun ... for now. you got it backwards; the KOA game is based on the MMO IP.

they wanted to get some extra funding for the MMO, so they threw together a single player game based off of the lore and art assets for the MMO.

.... I'm guessing it was supposed to be more profitable or something.

beyond all that, the IP actually is valuable. should 38 go under, the IP for both the MMO and KOA will belong to the state. Even with all the bad press that has followed Copernicus like a bad fart, you don't just say "oh well" and throw a nearly done AAA MMO in the trash and walk away.

KOA is still making money, on some level, so the state would be entitled to to all future profits should the rights need to be transferred (reducing the strain of paying back the loan). then add in the bloody frenzy it would produce if RI put the rights for the MMO up on auction;

EA is balls deep in marketing both games, you better believe they would be interested in picking it up and shipping it out themselves.

Turbine has already stated an interest in hiring all the people 38 had to fire to make their loan payment, Warner Bros ain't exactly broke ... to the point that they could potentially offer up a bit that covers the entire sum of the loan ($100 mill for a movie is nothing to them, bagging a AAA MMO to modernize Turbine's aging selection of game would be totally worth it to them).

Sony's list of MMO products has been on the back swing for a while now, snagging Copernicus and converting it to a PC/PS3 title (the engine is already proven to work on the PS3) would be a major payoff for them.

Activision would probably throw in a bid just to keep another MMO out of the hands of EA, then probably never release it and count the loss of a potential drain on WOW's sub figures as a gain.

and that's not even going into the likes of Nexon and Perfect World Entertainment. the MMO is the property of 38 studio, EA is only publishing it under their "partners program" (where in people fun their own games, and EA simply handles the logistics of Marketing it and supplying printed boxes). yeah, people are often stupid and don't read up on who's game it actually is, so they jump the gun and think that EA is trying to pop out another TOR/WAR.

But the reality is that EA hasn't got a damned thing to do with actually developing the game (well they DIDN'T, things may have changed since 38 suddenly coughed up a lump of cash that they didn't have 3 hours earlier), this game is Curt's little baby and EA is simply shipping it.

Wasn't TOR the only MMO actually built under EA ownership... all the other MMO's they've published/are publishing are under the EA Partner program...

ultima online .....

I don't understand how this applies to what I wrote. I asked how 38 is supposed to support an MMO with their financial difficulties. The fact that they can't count on EA financially only reinforces that, doesn't it?

100 million for a video game?!

How is that even possible?

http://www.joystiq.com/2012/05/18/first-video-of-38-studios-project-copernicus-mmo-flies-over-a/

75 million from the state of Rhode Isle, probably more from private investors ... and they have only received 50 mill of that 75 so far.

even still, 38 Studios has been in operation since 2006 and developing the MMO the whole time.

they have also got both RA Salvatore & Todd McFarlane connected to the game (that right there can't be cheap).

additionally, they bought "Big Huge Games" from THQ in 2009 (BHG were the ones who put together KOA while the main studio continued to work on the MMO)

they also had to move the company into the state of Rhode Isle in order to get that 75 mill, that ain't cheap sense it means paying for your employees to move their entire households not to mention getting a new building and setting up all the utilities and phone lines.

I'm guess that a vast majority of the 50 mill simply went into the move, while the rest went into getting KOA out the door. I'm guessing that were the problem with 38 not being able to pay the loan payment comes from is KOA not making as much money as they expected.

Very common in the MMO landscape. Even some non-MMO games (Skyrim) have huge budgets. Also, there's a lot of debate on whether those 100M are the budget for KoA or the MMO, since it seems there isn't a clear division between them.

And if there isn't such a clear division I'd love to see how an investor reunion for them would go:

"So what happened with my investment? Where is it?"

"Well, uh, we placed it... Somewhere... Around... here... *Points at expenses chart*"

But they were also complaining they couldn't make payroll (hard to do much without employees coming to work) and some contractual protections are kicking in now. They're under scrutiny. You're right, the payment was only slightly over a million bucks, but payroll for 100 employees could easily be 500k USD per month. The state may pull their asses out of the fire but they may be able to just decide to end the whole project and do so.

38 studios existing in any recognizable form 12 months from now seems to be pretty long odds.
Spend 4 years making a game and pay 100 people their salaries. People who can make video games are by definition professionals and don't come cheap. Also, if you read the interviews Schilling seems to be only willing to hire "the best" which probably cost even more. Payroll (with taxes and whatnot) alone could have run the company 40 million in that time.