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Curt Schilling's 38 Studios Struggling Financially
medv4380 writes "38 Studios, run by Curt Schilling, is having a hard time paying its bills and employees. The gaming community hasn't been happy with the company since the issue with an Online Pass for Single Player Content, which we discussed previously. Now, 38 Studios has bounced a check intended as a payment on its $75 million loan from the state of Rhode Island. If the company defaults, Rhode Island taxpayers will have to cover the loan and interest, which could total nearly $100 million."
Why do we care about this?
For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
Jesus people.
It's Schilling.
They should have had a deeper crafting system, and fixed some of the oddities. I would have bought ALL the DLC if they had done that.
Seriously, my smithing is maxed out to 10, and I'm getting bottom rung components when I break up top of the line armor and weapons? It's like I became a smithing god when crafting a weapon, but when it's time to disassemble something, I turn into a three year old with a mallet.
The detection skill was a good idea, though.
Is there ever going to be a time when the pols realize that throwing massive tax breaks at corporations is a bad idea for the state/city/country they're supposed to be representing?
And BTW everyone in MA and NY knows about Schilling, the bloody sock, the piano in the lake, and a record-setting choke which led to the end of an 86-year curse.
https://app.box.com/WitthoftResume Code: https://github.com/cellocgw
This is what it looks like.
http://www.youtube.com/watch?feature=player_embedded&v=BZ_6PkeO_g8
"It's like you're running away."
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BMO
Sounds like anyone who avoided their game dodged a serious bullet, and now this is the logical result. Learn the lesson Mr. Shilling - you brought this entirely upon yourself.
I was sympathetic until I got to the Rhode Island loan guarantee.
Which reminds me -- for a proper response I need a popcorn icon. Get with the modern, Slashdot!
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
"There can be no question our country is in the worst economic crisis of our lifetimes. I also think there can be no question that it falls on us, the individuals, to find a way out of our own personal crisis." - Curt Schilling
It well and truly stinks that this man was ever allowed within ten feet of public funding in the first place. Even more confusing, though, is that he even pursued public funding in the first place.
It's enough to make one think that he never really believed the anti-gubmit pablum he was spouting in the first place.
Obliteracy: Words with explosions
Paying companies to relocation is a win for owners a loss for working stiffs. In the best scenario, tax payers in the new community get the benefit of more jobs at the expense of subsidizing millionaires. The old community losts the jobs the new community gains.
In this case, not only did the new community not gain jobs in the long term, but they are now responsible for $100M in loans. Brilliant job.
I like free markets. I have government in bed with big business.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
All of us techies living in Mass. saw this coming. You had a sports celebrity non-businessman CEO on one side, and unsophisticated investors on the other who happened to be controlling $75 million of taxpayers' money. The agreement they signed pretty much compelled 38 Studios to build the payroll to an unsustainable level (since the state was trying to hoping to create a local tech industry) and thus burn money as fast as possible. Elementary budgeting and accounting skills were lacking.
All I can say is good riddance. I'm glad that a shitty game with an even shittier DRM practice is not rewarded. We should be happy about this.
Remember all the hub-bub that KoA was getting about even though it was single player you couldn't get 1/3 the game unless you purchased new? Yet all of a sudden, even though it's average score was a 7, it was getting rave or good comments all over every game sites message board. The astroturfing was so obvious and egregious. And the problem was, it was so prevalent and everywhere people actually genuinely believed it was a good game.
What pissed me off more though is that everyone was carrying torches the day before it was released about the DRM, and then "they just bent over and took it."
So I say good riddances and thank god. Because if that game sold well, you know damn well that would open the floodgates to needing online passes for single player games forever on...consoles!
Ugh.
It was in a display case in cooperstown last time I visited there.
But I'm sure Rhode Island Governor Donald Carcieri has a lot of experience funding tech startups...
From TFA:
Chafee opposed the loan guarantee as a candidate for governor.
I wonder if he'll pull an OJ and try to break in and steal it.
See that's the problem. He took, how much, $75 million, of the state of Rhode Island's money (as a loan.) And spent it. It's gone. If you seize the company and put it up at auction, all you're going to get is a bunch of scratched-up aeron chairs and three-year-old computers. The state is out the money.
The Providence Mafia is a pale shadow of what it used to be.
Luigi "Baby Shacks" Manocchio, the head of the mob, got sentenced to 66 months in prison last Friday. He's 84.
Nobody knows what "Baby Shacks" actually means, btw.
All the old ones that more or less knew what they were doing are dying out. The younger ones...not so bright.
--
BMO
You would think that some might have learned from the DotCom bubble and not go about it the very same way the Silly Valley did a decade ago. That's my two-Schillings worth.
jsut athnoer menagiensls ltitle psrhae for you to dcoede. Why do we wtsae our tmie dnoig tihs?
I'm a little unclear on why so much. Only $50mil in loans have been paid out, but most articles suggest that taxpayers would be on the hook for both the loan AND the interest. Isn't the loan *from* the taxpayers? I understand that the budget might be $100mil *short* of its intended level as a result, but the taxpayers should only really be down the $50mil in cash that they've actually paid out.
Can someone with a better understanding of this kind of economics explain?
There are plenty of games that are not like that. While some publishers are trying for that crap, others are not and some are emphatic about not doing it. So buy games that don't do that. IF we vote with our wallets, it will work itself out long term.
Teabaggers are normally self important blowhards who expect everyone else to sacrifice for their benefit.
I honestly don't see the problem here. What was the state of RI doing giving venture capital to a start-up business in the first place? Most new businesses fail, so VC is basically a big gamble; you're hoping the company is going to take off and you, being part-owner, will make a ton of money, the way the Facebook owners have done. Giving a loan to a start-up is utterly stupid, and normally it's only done when the company is going to use it to buy a lot of capital equipment, which of course becomes collateral and the bank can seize in the case of default. You'll never find a bank willing to loan you millions to fund a start-up that doesn't have any significant capital equipment (or probably any start-up at all; it seems to me that most business loans are only given to companies that have already "started up" and are successfully operating, but want to grow and need capital equipment to do that; banks don't like to make loans without collateral).
So again, I fail to see the problem. The people of RI were stupid in giving this company so much (or any) money with no collateral except Aeron chairs, and were stupid to be in the business of angel investing. They deserve to lose their money for their stupidity. Maybe next time they'll do a better job electing leaders. At least the federal government investing in firms like Solyndra makes some kind of sense: Solyndra had tons of capital equipment (you can buy some of it on Ebay right now), and its business was something that seemed to be of genuine national importance (developing alternative energy technology). But a video game company? WTF? Not only is that not important, it's not even something we have a shortage of. There's tons of video game companies out there.
This pisses me off to no end. I'm not a big fan of Bob Watson but I agree - I think former Governor Carcieri was starstruck and pushed this deal through.
And how curious - I wrote a blog post with a pro forma estimate of how much they should have burned through using 20 employees as my benchmark. It's been in operation for about a year now, and they did make $60 million on that game, probably half that was profit So Schilling got his $30 million investment back. But then there's the matter that of the $75 million, even at the 150 actual employees, they would only have spent about $40 million. So there is something going on here and Schilling should be on the fucking hook for this.
Mark my words, 38 Studios will fold. And Schilling will come out smelling like a rose. Meanwhile the State of Rhode Island and Providence Plantations will get left holding the bag, and we the tax payers will be each saddled with $100+ of tax increase to cover this ludicrously bad investment.
Their first release is "Every Other Action RPG Ever Made". It's nothing new. It's Every Other Action RPG Ever Made. It's a 5 or a 6 on a ten-scale.
Ok, so you're Curt Schilling with your shovelware of a game, and you're gonna have EA publish the thing. EA, the most hated game publishing company of all time. AND you're gonna have the sack to ask for $59.99? On a title developed by a company nobody's heard of that's run by a bored baseball player? AND you're gonna deploy DRM? AND you're gonna play the retarded EA DLC / content lock games with us? With all the preorder bonus / Mass Effect 3 cross promotion trimmings? On your first time out? ON YOUR FIRST FUCKING TIME OUT, CURT?
It's not like 38 was some kickass company that sold out to a major publisher and got shittier and shittier over time. They drank the asshole sellout money-grab who-cares koolaid from day one, and they weren't shy about it.
It's like they purposefully exited the race gate, cut across 5 running lanes, made a mad dash off the track for the gamer killing grounds, only to shoulder-check Bioware off the chopping block, and look up at the executioner screaming "Me! Me Next! No, Me! My turn!".
Well, okay then. If you insist. Chop, motherfucker. Just don't have the audacity to suddenly look confused and try to scream "PIRACY!" before the blade drops.
All the old ones that more or less knew what they were doing are dying out. The younger ones...not so bright.
That seems to be the case for most of the US population, not just mobsters.
Because he promised them he would create lots of jobs in the fastest-growing entertainment industry, maybe even making them believe the RI could become the next Austin for game companies.
http://www.joystiq.com/2012/05/18/38-studios-successfully-pays-1-125-million-to-rhode-island/
> The people of RI were stupid in giving this company so much (or any) money with no collateral
> except Aeron chairs, and were stupid to be in the business of angel investing.
That's a problem if you are one of the people in Rhode Island, or one of the people who Schilling employed (now holding a rubber check), or somebody that extended credit or resources to a (now broke) startup, or even one of the people who bought a great computer game that now has no support or upgrade path. Being stupid is not some kind of big flag that says "come exploit me, I deserve to have bad things happen to me". It's not a game, its people's money and livelihoods.
Maybe what you instead mean to say is "I fail to see the problem -- for me." Or maybe "I have no empathy for anybody that does anything I wouldn't, in hindsight, do."
Anyone can make claims like that for almost any business. "We'll create lots of jobs!!" That doesn't mean the government should be funding every harebrained private business venture out there. It makes some sense if the industry, regardless of any jobs it creates, is of strategic national importance (e.g., having viable electric vehicles would greatly reduce or even eliminate our dependence on foreign oil, so even if they were built all by robots it'd be strategically important to the nation and the economy to have this capability). There's nothing remotely of national importance about making video games.
And again, there's no shortage of games or game companies. What's RI going to "invest" in next? Some fast-talker who says he's going to build a new social networking website? Sounds like RI would be dumb enough to pour a bunch of money into that, just because Facebook has been highly successful.
Doesn't matter; the people behind those closed doors were duly elected by the people of Rhode Island. They're on the hook for their own stupid decisions in the voting booth. Hopefully next time they won't make that mistake again, but I wouldn't be too sure.
Everyone has the government they deserve.
The problem is that people need to be responsible for their actions. Obviously, sometimes bad things happen, and that's why good societies have safety nets, etc., but overall the people of society are responsible, collectively, for choosing their own leadership, which runs the society and makes decisions on their behalf and for their welfare.
If the people of a region are too stupid to pick good leadership, and instead pick incompetent or corrupt leadership, what are you going to do about it? What is your proposed solution for the problem? Eliminate elections and establish a dictatorship, hoping for a benevolent one? Allow some foreign power to invade and take over? Beg for some friendly and intelligent aliens to come run the place?
Sure, it's sad if a whole region full of people are too dumb to pick non-corrupt leadership, but if they do, what can you do about it? Wringing your hands isn't going to help the situation.
Moreover, we in the US have been doing a lot of this stupid stuff lately, and not just in RI. We keep picking horrible leadership. That's our fault, and if we want better leadership, then we need to start making better choices. But these days, I don't think American society is capable of it any more, so we're getting the government we deserve.
It's actually a loan from bonds that have been sold, and those bonds have set interest rates on them. The bonds where just issued and insured by the state. The state would be on the hook for paying back the money on any bonds that were sold along with the interest. The State may have money that wasn't dispersed yet but they owe the interest on any bonds that were sold. Worst case they owe 100 million.
Looks like they made the payment now. They are likely still in trouble in the long run, but seem to have fixed this problem temporarily. http://news.providencejournal.com/breaking-news/2012/05/ri-gov-chafee-3.html
So not only did he "negotiate" RI into loaning his startup $75M (which was a huge chunk of their $125M jobs-development budget, and was pretty controversial at the time), he did so claiming he'd sunk "$35-$38 million" of his own money into the company.
Turned out, the figure was closer to $3M, and he promptly paid himself back with the RI loan money, removing any personal stake in the success of his company.
Why would anyone engrave "Elbereth"?
Thank their government for taking risks of this nature with tax payer money.
This could be a success actually. Not for RI, but for the gaming community. I have to wonder how much $ and effort went into handling the flack from deciding to require take Ubisoft's approach to DRM (online and yes if they can help it), without having feet to stand on first. I wonder how many smaller capital firms and individual loaners are also listening to the band play on. $75 Million is not a small ship. Thinking about dusting and polishing the old shovel for this dig.
I wouldn't consider the mad hatter mad. Just reality impaired. He sure can make a mean cup of tea.
Rhode Island... so doesn't that mean he borrowed mafia money? They're going to chop him up into little pieces and introduce him to Jimmy Hoffa. Now how you doin? All set?
-- I ignore anonymous replies to my comments and postings.
Once again, that is what VCs do. What, you expect him to tell them "This company has a 5-10% chance of ever making money at best."? Like grishnak said above, government has no business in going after risky ventures. The people should be angry at the government who approved the deal.
Vote monkeys into Congress. They are cheaper and more trustworthy.
I can feel empathy for the employees, they are in the worst position. People who bought the game, they're out $50, so it sucks but it isn't that big a deal; it's a tank of gas. Everyone else that put money into the company knew it was a risk, and the word risk means it may not go your way. I don't need hindsight to know not to invest money in a startup, because to do so you just write off that money the second you cut the check. You're playing the lottery on getting any money back. If there was malfeasance, that's an entirely different story.
Vote monkeys into Congress. They are cheaper and more trustworthy.
According to Wikipedia:
Considering all Latin American countries baseball fans except South America but including Venezuela, that's gives us a rough estimate of only 37% of the Latin American population being baseball fans. You're not helping in your 'Americans aren't insular' campaing. ;-)
I always take a bit of issue with this whole "we get the government we deserve" thing. What if the system was designed so that the only choices we have are horrible (for the majority of us at least)? The illusion of choice we have is false, and no amount of voting will fix that. The only thing that will fix this is activism, and, well... I guess we get the government we deserve then. :(
Fanboy Status: Apache Flex, C#, Eclipse, KDE, Pirate Party, Ron Paul, Slackware, Windows 7
That's what revolutions are for. If your government really sucks that bad, then you need to take to the streets and force a change; just ask the people of Tunisia.
I'm a little unclear on why so much.
I'm still not sure why they gave them a loan to begin with. Don't most "Tax incentive packages" involve a grace period of simply not paying local / state/ real estate taxes ? Since when do they flat out become the venture capitol ?
There was an attempt in the legislature to cap the amount of money available to any one company, and it would have succeeded if the EDC Director Keith Stokes (who resigned last week) hadn't persuaded them to "hold off a little while, we're working on something".