The 'red flags' of 38 Studios' demise
A lengthy feature on The New York Times details the rise and fall of 38 Studios, and how both parties involved bit off more than they could chew. Rhode Island, eager to reinvigorate its economy with tech jobs, dove head-first into an investment that had "red flags" from the get-go.
The collapse of 38 Studios has put the state of Rhode Island in a precarious position. The government offered substantial loans to Curt Schilling's company. Following its bankruptcy, fingers were pointed: who's to blame?
A lengthy feature on The New York Times details the rise and fall of 38 Studios, and how both parties involved bit off more than they could chew. Schilling didn't properly anticipate the challenges of game development, let alone MMORPG creation. Rhode Island, eager to reinvigorate its economy with tech jobs, dove head-first into an investment that had "red flags" from the get-go.
Sean Esten, financial portfolio manager of the Economic Development Corporation which brokered the deal, warned that the worst-case projection for its business was still too optimistic. "I don't think I can support a $75 million guarantee to any single company in this industry due to the wide volatility in commercial success of game releases," Esten told his bosses in an e-mail. Apparently, 38 Studios was promising to release a successful game every two years--something the NYT correctly points out is "a track record that most gaming companies can only dream of."
According to the state, Mr. Esten's bosses "decided to bury his analysis."
Even government workers pointed out the dangers in investing such a large amount of money in an unproven company. Gina Raimodo, the current state treasurer who has previous experience working in venture capital, pointed out that the lack of VC funding for Schilling's company should have been a warning. "In general, I would proceed very carefully on this," she wrote to Keith Stokes, the corporation's executive director. The company "is in the Boston area where there are 200 venture capital firms, and it is in a very hot area of gaming so if it were in fact a compelling investment I would have to think it would be well funded already by venture capitalists; the fact that many have looked at it and passed is a red flag."
The collapse of 38 Studios ruined nearly everyone involved with it, from the taxpayers of Rhode Island, to those that were laid off, to even Schilling, who lost his baseball fortune.
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replyAndrew Yoon posted a new article, The 'red flags' of 38 Studios' demise.
A lengthy feature on The New York Times details the rise and fall of 38 Studios, and how both parties involved bit off more than they could chew. Rhode Island, eager to reinvigorate its economy with tech jobs, dove head-first into an investment that had "red flags" from the get-go.-
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How the hell did you reach that conclusion? Your statement makes little sense. Somehow, the poor management and business failings of Curt Schilling and 38 studios is the fault of gamers, who are a fickle bunch?
People pay for what they want - recent kickstarter successes are example enough. This was an example of a business created by someone with more money than business sense apparently. He thought throwing more money at a game would make everything work. As this case shows, it takes more than copious amounts of cash to make successful games.-
I agree Schilling probably wasn't the best man for the job, but no matter how good your management is, if gamers don't buy it... You're fucked.
The only thing that could have happened different is if he didn't spend All of their money, maybe they wouldn't have had to close down after 1 botched release. Then they could have made a second botched game! -
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The lesson is that gamers are a fickle bunch. I do not include myself in that since I make sure I support my hobby in all platforms with as many gaems as I can.
Thats the point. Yeah there was some bad decisions made but the reasoning was sound. They wanted to create jobs and bring tech type work over to the region.
Al this talk is hind sight and what a marvelous thing it is.
The industry is going down the crapper, because gamers hold their $65.31 (US) for the latest COD and the occasional sports title.
Its like we don't understand that real world money was spent on this products and if you are an enthusiast then you must support it. Or leave it to those that can afford it.
Bottom line is that money talks and rest walks.
Look at this articell here: http://www.penny-arcade.com/report/article/ad-blocker-the-games-press-and-why-cosplay-galleries-lead-to-better-reporti
Even the websites where we get info from are finding it hard to maintain their current business model.
I have plenty of friends online and in the real the world and in terms of gaming they are either posers or specialty gamers. With the one tittle under their belt.
This game was good, it could have been better but it wasn't bad.
They should have sold more. But lets be honest even if the game got solid 10 out 10 it wold have still failed and the trends will tell you.
Great reviews DO NOT equal sells. Its people that don't support their hobby for one reason or another, that are hurting this industry.-
You're right that we vote with our money, but this isn't really relevant in a discussion about people making terrible business decisions. No amount of community support could have changed this situation. The lesson here is don't go all-in when you don't know the odds.
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Yoon I link-scooped you! http://www.shacknews.com/chatty?id=30050180#item_30050180
