Kingdoms of Amalur: Reckoning developer and Curt Schilling-headed 38 Studios laid off its entire staff and closed both its Rhode Island office and subsidiary Big Huge Games yesterday.
While the developer was known to be in financial trouble with a missed loan payment to the state of Rhode Island, the speed of the company’s downfall was a surprise to many as even Governor of Rhode Island Lincoln Chafee hadn’t heard about any possible layoffs or closures until yesterday.
“Companies fail over night,” said Chafee during an evening press conference in response to a question regarding the unexpected nature of the closure.
The developer reportedly stopped distributing paychecks to employees on May 1.
“The game failed. That was integral to the success of the company,” said Chafee on the reason for the developer’s closure, referring to Kingdoms of Amalur.
Chafee revealed the game managed to sell 1.2 million units in its first 90 days but needed to sell 3 million copies to break even.
WPRI reports the following email was sent to employees yesterday:
The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.
These layoffs are non-voluntary and non-disciplinary.
This is your official notice of lay off, effective today, Thursday, May 24th, 2012.
The developer staffed 379 full-time employees between the two studios as of March 15.
In a show of compassion, many within the gaming industry took to Twitter to both express sympathy for those suddenly without a job and to offer help. The hashtag #38jobs was trending in the United States for some time, as developers, public relations and fans listed companies that are currently hiring.
Freelance journalist Alex Rubens compiled all of these Tweets into a helpful Google Doc listing over 80 companies for those hit by lay-offs.
It’s looking like the state of Rhode Island will take ownership of the Amalur IP, valued around $20 million, unless the company is able to pay back the defaulted loans.