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38 Studios makes state payment, plans 2013 release for MMO

Kingdoms of Amalur developer 38 Studios made its first payment for the $49 million loan it received from the state of Rhode Island, and will seek private funding to continue operations.
Kingdoms of Amalur developer 38 Studios made its first payment for the $49 million loan it received from the state of Rhode Island, and will seek private funding to continue operations. The developer's financial difficulties came under increased scrutiny this week after it came to light that 38 Studios failed to make its first scheduled $1.125 million loan repayment, and could not pay its nearly 400 full-time employees. Seeking to protect taxpayer money that went toward the loan, the state government said it would try to keep 38 Studios solvent, but it is unwilling to provide the company with more funds. In a press conference streamed at WPRI on Friday afternoon, state Governor Lincoln Chafee announced that 38 Studios submitted a $1.125 million check for the late payment, which cleared. The developer is expected to make another $2.6 million payment in November, and then pay $12.6 million in 2013. Chafee said 38 Studios will need to find private capital funding to continue its operations. "There's not going to be any money from the state. They're not coming here for easy money," he added. The governor noted that the company intends to release its second game, an MMO codenamed Copernicus, in June 2013. 38 Studios released its first game, the Big Huge Games-developed Kingdoms of Amalur, in February and sold around 330,000 copies in the U.S. during its first week on sale. Rhode Island is now looking to revise how it handles tax breaks and loans -- the state initially committed $75 million to 38 Studios, when it convinced the company to move from Massachusetts to Rhode Island two years ago. And on Wednesday afternoon, Rhode Island's Economic Development Corporation executive director Keith Stokes, who was instrumental in coordinating the state loan that brought 38 Studios to Rhode Island, resigned from his position. Though Chafee admitted the state would have benefitted much had 38 Studios become a huge success, when asked if the government would make similar deals in the future with other companies, he responded, "Never. Not on my watch."

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