The Fall of 38 Studios

An anonymous reader writes "Boston magazine provides the first reasonably satisfying account of the final year of Curt Schilling's video game company 38 Studios, which was heavily subsidized by a huge loan guaranteed by the state of Rhode Island. During his career as a baseball pitcher, Schilling helped lead three different teams to four World Series, resulting in three championships. He has so far been much less successful as a video game CEO; although he has some of the stereotypical qualities of a successful entrepreneur (passion, energy level, optimism, selling ability), his company seemed utterly lacking in controls, while facing a very tough industry and economy. Schilling apparently regrets the decision to bet the company on an MMO game, but otherwise seems to accept little blame for the demise. His company burned more than $133 million over six years, mostly for headcount, according to an analysis of public documents by Providence TV station WPRI."

Comments

So what's the purpose of this story again?

[Anonymous Coward]

Is it so we feel sorry for some rich dumb fuck who's greatest achievement in life is throwing a ball around, and who only got the chance to cause hundreds of hard working people to lose their jobs because America seems to reward the former attributes above all else?

Re:So what's the purpose of this story again?

[Anonymous Coward]

This is the shit Republicans actually believe. The guy got a $75,000,000 loan from the government, blew it on terrible business decisions, and yet we're supposed to bow down and worship him for "giving" the employees -- employees that he fucked over (by cancelling health insurance without telling them, for instance) -- their jobs.

Re:So what's the purpose of this story again?

[DarkOx]

[Curt Schilling] is vehemently opposed to government financial bailouts and stimulus funds, yet didn't bother to eschew a tax-payer backed state loan

Which is why I don't blame Curt. Liberals love to jump on people like Schilling for being opposed subsidies and then taking advantage of the ones that exist. They are the first to say "we're all in this together" and suddenly forget that sentiment as soon as it applies to anyone who disagrees. Tough, we live in a society. That means people like Schilling, if they had their way would not get subsidies and neither would anyone else. They don't make the rules though and neither do I. I vote all the time to end this crap but It does not happen, in the mean time people like Schilling and I pay the same taxes to support it as everyone else; just be cause we don't think its a good idea does not mean we are any less entitled when society collectively decides to create an entitlement.

So what we really have here is a case where Government was gambling with public monies making loans. That is not the governments job, or it should not be. Capital risk belongs in the private market. There are two really important reasons for that. The first is that when things don't work out bankruptcy can destroy private debts, sovereign debts on the other hang around and drag on the economy forever. The second is that private financing means the people making the call and taking the risk have their own skin in the game. That tends to put the breaks on ideas where the risk is outsized compared to the potential reward; money gets allocated better.

People keep saying 38 Studios should have take a less aggressive path. They probably could not have raised 75M in the private markets and would have been forced to do just that. That would have put them on the path to grow by doing some number of less ambitious but likely more successful in ROI terms projects first. Who knows if government had not dumped a bunch of overly cheap money on them they might exist today.

Re:So what's the purpose of this story again?

[scarboni888]

Hmmm... must be an election year.

Re:So what's the purpose of this story again?

[Raenex]

Since when do Republicans believe that government loans to business are a good idea?

When they're the ones giving them out.

Re:So what's the purpose of this story again?

[thePowerOfGrayskull]

So you're saying it's the government's fault for making the money available, and the person who took the money has no responsibility?

Isn't that akin to blaming the person who left his car unlocked when it gets stolen?

Re:So what's the purpose of this story again?

[DarkOx]

So you're saying it's the government's fault for making the money available, and the person who took the money has no responsibility?

-Yes and No-
He has responsibility for the business failing yes. He has no responsibility to public for the loss of the 75 million, that is what a loan grantee does after all. I also really do think that when government intercedes in the market place and makes money overly cheap, either via loan grantees or direct lending, it does lead otherwise savvy business people to make poorer decisions. It also enables unproven decision makers like these folks access to capital that nobody would give them otherwise. The outcome seems to be often calamity.

This is an example of someone who had they been forced by nature to swim in a smaller pond for a time, might have learned, grown, and installed a team around him of proven people. What that 75Million loan did is effective let him skip from the high school team and jump directly to majors. Things might have gone better with some time in AAA

Congratulation

[mwvdlee]

After reading the article, I can only say one thing.

Congratulations mr. Shilling, for winning the "most arrogant douchebag of the century" award.
We've still got 82 years to go, but we're pretty sure nobody will even come close.

He wanted to outdo with half the money in half the time and no experience, what few experts dare to do.

My whole life was spent doing things that people didn’t believe were possible, because God blessed me with the ability to throw a baseball. And I carried that same mentality into everything I did here.

You weren't doing anything anybody thought impossible. Any league has a finite number of teams, one of which will win; this is not an impossibility.
Apart from being CEO at Microsoft, the ability to throw objects has no value outside the baseball field.
The mentality to do short bouts of activity for a few hours every week isn't necessarily the right mentality for anything else in live.

No kidding

[Sycraft-fu]

Same shit with the "Make an MMO first because it makes you the most money!" thing. What a retarded, arrogant, idea. When you are new in business, best not to try and shoot straight for the most financially risky stuff because good chance you fail. Had he really wanted to make games and been smart about it he would have started small, maybe with something he could self-fund, and then as he learned moved on up.

Just as you don't start pitching for the majors, you don't want to start on an MMO. It is a shit ton of work, a lot of money, and easy to fuck up. Even for the big players it can happen. Look at The Old Republic. Bioware was doing the design and story on it, and they have a history of very solid single player MMOs, EA was publishing and controlling it, and they have a few MMOs to their name (Ultima Online, DAoC, and Warhammer Online) and yet they still screwed it up fairly badly and it is questionable if they'll manage to break even.

He just thought he was such an amazingly smart motherfucker that he'd go straight to the top, fuck all that noise of learning the business or anything. Instead, it was straight to the bottom.

Re:No profits = no accountability

[Hognoxious]

The middle class can't carry both the rich AND the poor.

Probably true. I just wonder which will get thrown overboard first.

Partisan Politics

[RudyHartmann]

The comments venturing over into partisan politics are getting lame and mean spirited. This is a story about a tech failure and an unqualified CEO. Comments about that are interesting. All the "Republican this" or "Democrat that" replies are irrelevant and pointless.

Fascinating psychology

[FranTaylor]

What's fascinating about this is that Curt Schilling (and apparently many Slashdot readers) think that you can IGNORE poor business practices by PRETENDING it's the fault of those who make those poor business practices available.

To these people it's not Curt's fault he took the loan, it's the fault of the people who offered it to him.

Equally fascinating is the implication that Curt Schilling is DUMB AS A STUMP if he JUST CAN'T STOP HIMSELF FROM TAKING THAT MONEY.