38 Studios Lays Everyone Off

Via The Verge.

Items of note:

  • Reckoning was a “failure.”  They needed to sell 3,000,000 copies just to break even on the deal.  They sold 1.2M.
  • They are closing both offices completely.  Providence and Maryland’s BHG.
  • First internal communications grew ‘sparse’ then paychecks stopped coming, then email servers went down, they heard the bad news a few weeks later…

First of all…  3,000,000 copies!?!  Did anyone think it would sell that many?  I thought 1.2M sounded pretty good.

My thoughts are with all of the developers and their families who are dealing with a very difficult time.   This is a sad day for the entire industry.   Bioware laid off a ‘significant’ number of their employees working on SW:TOR and now all 337 employees of 38 Studios are unemployed.   Sad times, indeed.

~Cyndre

 

15 thoughts on “38 Studios Lays Everyone Off”

  1. 3m to break even is based on the number 38 Studios paid for BHG. In other words, they overpaid 3x what the studio was worth, in addition to taking 6 years and most likely over 100m to start but not finish a themepark MMO that looks like a texture overhaul of WoW.

    :slow-clap: for management.

  2. I’m still taken back by how people can stop receiving paychecks and not get formally fired until weeks later.

  3. And here we have an excellent example of where game development needs to focus more on delivering a solid game than investing a ridiculous amount of money in shiny flashiness. Reckoning was ok, but not outstanding.

    Of course, I imagine the problem was more that they were hoping Reckoning would fund the MMO development, which failed utterly. It’s probably best it did now, as it certainly would have later.

    1. Following the money seems unnecessary when you can just look pointedly at management that fails to be honest & upfront with their employees.

  4. It is always darkest right before it goes pitch black.

    Employees who blindfully followed management are as much to blame. Games are made in the real world and bills must be paid.

    Our Economy benifits greatly when it is easy to both start a new company AND go bankrupt. This benifits good ideas and punishes complacency.

    The loyalty of employees is bought and paid for every 2 weeks. If they are good at their job they will find another, if not – so it goes…

  5. Yeah I gotta say any business plan that revolves around selling 3 million copies of a PC-only single-player RPG with no big IP behind it is a MASSIVE gamble. I too heard the 1.2 million sales figures for KoA:R and thought “holy crap, what a massive hit, that is so much better than I expected!!”. If that’s not even a half of what they needed – yeah, doomed to failure from the start.

  6. As I’ve heard it, Amalur wasn’t expected to make money. It was expected to prime the pump for the bigger cash cow of Copernicus.

    This may be true. BioWare didn’t turn a profit on the first Baldur’s Gate game, and Mass Effect was expected to follow the same cycle. The first title would end in the red because of the cost of building a new engine, IP, and team. Later games would become increasingly profitable as the groundwork had been done.

  7. What kind of bullshit state this industry is in when it turns out you have to sell 3M copies to break even…

    … and what’s worse, someone at some point before all the work started, okayed this.

  8. What scares me is that so many new MMOs are failing DESPITE playing it safe and not innovating. It must be that much harder to make something new.

    1. MMO’s are pretty unique in that “playing it safe and not innovating” is – contrary to other forms of entertainment – not safe.

      The problem is to make an MMO work, you need both a good game and to build a sufficiently large community (beyond the launch-day tourists). So, “playing it safe” vs, say, WoW is ineffective – always. This is because while you can make a better game even as a WoW clone, that’s better in every measurable way, you’ll still fail. Why? Because WoW has an established community (or, more accurately, a large number of smaller established communities). People have a huge investment and history in the game.

      So making a clone of WoW will draw a whole whack of curious tourists, but ultimately they’ll leave because:
      A: It’s the same thing they already are playing/have been playing, but…
      B: Their friends aren’t all there. Some may come, but they get spread out over several different new clones
      C: If they are going to play the same game, why give up everything they’ve already achieved elsewhere and start from nothing. This is both in a game-level sense and in a meta-game sense; you’re going from playing a game you’ve “mastered” (at least in your own mind) to one where everything you know is useless.

      So, without that large base populous making the world work, and providing communities to join and interact with in game, the new MMO struggles. The more it struggles, the less likely it is to draw further players. As it struggles, more people lose interest and leave.

      Once that process starts, it never stops. This has shown itself true time and time again, with *every* wow clone released.

  9. Things have gotten even worse for some 38 Studio employees:

    “Some of the hundreds of 38 Studios employees laid off yesterday were hit with a second round of bad news this week when they were told that homes they thought the company had sold for them hadn’t been, and that they may be stuck with a second mortgage, Polygon has learned.

    Several sources directly impacted by the mortgage issue confirmed the news today and a 38 Studios official, who asked to not be named, said the company is working to try and get to the bottom of the notifications and find a resolution.

    One former employee said they discovered this week that their Massachusetts home, which they had been told was sold last year, actually hadn’t been. The bank contacted them this week to ask why they mortgage wasn’t being paid.”

    http://www.theverge.com/gaming/2012/5/25/3043282/38-studios-downfall-leads-to-second-mortgages-for-some-employees

    This is insane.

  10. 3 million copies just to break even? That’s way too risky for almost any game studio. Especially a new studio putting out a single player RPG. I bought Reckoning… I liked it, but it wasn’t great. Someone must have realized during development that it wouldn’t sell 3 million copies. Maybe they tried too hard with all the star power behind the story and artwork.

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