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38 Studio’s Financial Woes

38 Studios, the company behind Kingdoms of Amalur, is having some financial issues, and it isn’t looking good. Red Sox player and studio owner Curt Shilling was unable to make payroll this week, leaving his employees unpaid. This was triggered by the studio’s inability to make a payment towards a former loan from Rhode Island Economic Development Corporation (RIEDC). RIEDC has since confirmed this to be true.

The amount due to RIEDC from Studio 38 for this payment was about $1.2 million and the grand total of the loan was $75 million. Since not being able to make the payment, all temps and contractors at 38 Studios have been laid off this week. Keith Strokes, the head of RIEDC, who had officially approved the $75 million loan in 2010, officially resigned last night. 

The studio has since hand-delivered the check to RIEDC, only to have it rejected due to insufficient funds. The Office of Governor Lincoln D. Chafee states that “the EDC remains willing to accept readily available funds.” When that time will be, no one knows. 

If 38 Studios is unable to repay the state, the next round will be owed in 2013. If 38 Studios closes, then it will be up to Rhode Island taxpayers to repay the $75 million bond (plus interest) through 2020. This would leave the taxpayers as the owners of the intellectual property of the developer, which would most likely be sold at auction. 

Shilling has since removed his name from the “visionaries” page of the 38 Studio’s website, along with CEO Jennifer Maclean’s name, who is said to be on maternity leave. 


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