|Industry||Computer and video games|
|Founded||Maynard, Massachusetts 2006|
|Headquarters||Providence, Rhode Island, United States|
38 Studios, LLC, formerly Green Monster Games, LLC, was an American entertainment and IP development company founded in 2006 by Major League Baseball pitcher Curt Schilling and named for his jersey number. Originally based in Massachusetts, the company moved to Rhode Island as part of securing a $75 million loan guarantee from that state's quasi-public Economic Development Corporation (EDC). In February 2012, the company released its only title, Kingdoms of Amalur: Reckoning, a single-player action role-playing video game for several platforms. The game received positive reviews and sold an estimated 330,000 copies in its first month, rising to 1.2m copies in the first 90 days. 38 Studios shut down a few months later. The failure of the controversial Rhode Island loan spurred investigations by the news media and the government.
During a family holiday gathering in December 2005, Schilling approached his wife's uncle, Bill Thomas, a retired business executive, with the idea to start a video game company focused on building a new MMORPG, a type of game that Schilling frequently played and enjoyed. Later the next year he announced his plans to six of his gaming friends while chatting online, asking them, "I'm seriously contemplating starting a gaming company. Who else is in?" Schilling recruited these friends, his uncle Thomas, and author R. A. Salvatore and author/artist Todd McFarlane to join his venture, and formally announced the formation of Green Monster Games (GMG) in a press release in September 2006.
In 2006, the company leased 30,000 square feet (2,800 m2) of office space in downtown Maynard, Massachusetts at the historic Clock Tower. The President and CEO of the company was Brett Close, and the CTO was Jon Laff, formerly of Electronic Arts.
At the start of spring training in 2007, the company was renamed from Green Monster Games to 38 Studios to give a "... more accurate reflection of what our company is working to achieve." Contrary to popular belief, Schilling has stated that the company's original name was not taken from the Green Monster wall in Fenway Park. He is quoted on the Fires of Heaven Guild message boards, posting under his EQ characters name, Ngruk, saying, "The GMG name was—and I know this is going to be impossible to believe—not named after the left-field wall at Fenway. The name was made up by someone who knew next to nothing about baseball and isn't even from this country." In 2008, the company hired Travis McGeathy, a former lead designer for Sony Online Entertainment's EverQuest. 38 Studios acquired Rise of Nations developer Big Huge Games from THQ on May 27, 2009. On August 21, 2009, 38 Studios announced that Brett Close had left the company, and Jen MacLean, former SVP of Business Development, had been named the new CEO.
In July 2010, the Rhode Island Economic Development Corporation (EDC) approved a $75 million loan guarantee to 38 Studios. 38 Studios had promised to bring 450 jobs to the state by the end of 2012. On November 3, 2010, 38 Studios announced the closure of its $75 million financing package in conjunction with the EDC and the relocation of the Maynard, Massachusetts development studio to One Empire Plaza, Providence, Rhode Island, in early 2011. On April 8, 2011, 38 Studios began relocation from the Maynard location to the new studio home in Providence. Over 160 employees began working in the new space on April 12, exceeding agreed upon job creation and relocation milestones.
The company simultaneously developed two initial products. The first, Kingdoms of Amalur: Reckoning, a single-player game, was developed by the company's Big Huge Games subsidiary, published by Electronic Arts, and released in North America on February 7, 2012 and in Europe on February 10, 2012. Reckoning was introduced to the public at the 2010 San Diego Comic-Con International convention. The game enjoyed moderate success. The second title, code-named Copernicus, was a massively multiplayer game developed by the Maynard/Providence studio. The game was still in development when the company declared bankruptcy.
The state of Rhode Island became concerned over 38 Studios' finances after the company defaulted on a $1.125 million loan payment. The studio had sent a check that bounced due to insufficient funds. Keith Stokes, executive director of Rhode Island's EDC, later announced his resignation. The second payment attempt by the studio on May 18, seventeen days past the initial due date and in the form of a $1,025,000 wire transfer and a $100,000 personal check from an unnamed source, was successful. However, 38 Studios consequently was unable to make payroll that week. WPRI reported that both CEO Jennifer MacLean and Senior Vice President of Product Development John Blakely had indicated that they had left the company; MacLean dated her departure to March 2012, when she took a leave of absence.
On May 24, 2012, 38 Studios officially declared bankruptcy, ceasing operations and laying off both its entire staff and that of Big Huge Games via a mass email. The Rhode Island state police, the attorney general's office, the U.S. Attorney's office, and the FBI began launching investigations into the company. Schilling publicly addressed the studio's failure on Boston radio station WEEI, revealing that he never took a salary and ended up losing his entire personal fortune of $50 million. "I'm tapped out. ... I put everything in my name in this company. But I'm not asking for sympathy. That was my choice."
The Rhode Island Commerce Corporation engaged the law firm Wistow Sheehan & Loveley PC and filed a lawsuit in November 2012 against Schilling, Stokes, financial advisors, and other backers of 38 Studios. The state's economic development agency settled with defendants Moses Afonso Ryan Ltd. and Antonio Afonso, Jr. for $4.4 million on June 27, 2014; with defendants Adler Pollock & Sheehan PC, Robert Stolzman, J. Michael Saul, and Keith Stokes for $12.5 million on August 7, 2015; with Wells Fargo Securities LLC and Barclays Capital Inc. for $25.675 million on August 23, 2016; with Curt Schilling, Thomas Zaccagnino, Richard Wester, and Jennifer MacLean for $2.5 million on September 9, 2016; and with Hilltop Securities Inc. (formerly First Southwest Company) for $16 million on February 1, 2017. On May 19, 2014, WPRI reported that some studio executives from 38 Studios knew that the money they accepted from the Rhode Island Economic Development Corporation was not enough to finish development on Project Copernicus.
The Securities and Exchange Commission became involved in the matter in March 2016 charging both the Rhode Island Commerce Corporation as well as Wells Fargo with securities fraud, specifically noting that the two companies were aware that the $50 million loan was not enough for 38 Studios to finish work on Project Copernicus but failed to notify bond investors of the risk. The Rhode Island settled with the Securities and Exchange Commission for a $50,000 civil penalty on March 29, 2017. In a separate administrative proceeding, the Securities and Exchange Commission settled with First Southwest Company for $192,400.
An investigation by the Rhode Island State Police did not come up with sufficient evidence to file criminal charges against the studio. However, civil litigation continued, ultimately leading to gross settlements with Schilling and other defendants of approximately $61 million. This settlement has left the state of Rhode Island paying approximately $28 million on the bonds.
- Kingdoms of Amalur: Reckoning
- North American Release Date: February 7, 2012
- European Release Date: February 10, 2012
- Project Copernicus (MMO) – Unreleased
- Makuch, Eddie (June 7, 2012). "Amalur dev files for bankruptcy, FBI investigating". GameSpot.
- Mitchell, Richard (March 9, 2012). "Kingdoms of Amalur: Reckoning sold 330,000 in the US last month". Joystiq.
- Yoon, Andrew (May 24, 2012). "Kingdoms of Amalur needed 3 million sales 'to break even,' RI governor says". Shacknews.
- Wasserman, Noam; Bussgang, Jeffrey J.; Gordon, Rachel (Dec 18, 2009). "Curt Schilling's Next Pitch". Harvard Business School. Retrieved July 7, 2012.
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- Frederick, Logan (5 December 2007). "38 Studios Hires Jon Laff as CTO". The Escapist.
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- "Green Monster Games (Curt Schilling)". Fires of Heaven Guild. 22 February 2007. Page 53 (of 544). Archived from the original on 2007-09-27.
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- Gilbert, Ben (May 24, 2012). "38 Studios and Big Huge Games lay off entire staffs". Joystiq.
- Kern, Mike (April 25, 2012). "R.A. Salvatore Talks Project Copernicus and the Creation of Amalur". The Amalur Voice.[dead link]
- Oshry, Dave (March 17, 2012). "McFarlane says 38 Studios’ Amalur MMO is coming this year". VG 22/7.
- Miot, Stephanie (June 8, 2012). "Third Strike for 38 Studios, Curt Schilling Leads to Bankruptcy Filing". PC Magazine.
- Gaudiosi, John (January 31, 2012). "Comic Book Visionary Todd McFarlane Jumps into the Virtual World of Amalur". GamerLive.TV.[permanent dead link]
- Bramson, Kate (2012-05-14). "R.I. Gov. Chafee meets with 38 Studios executives over company finances". Providence Journal. Retrieved 2012-05-15.
- Crecente, Brian (May 18, 2012). "38 Studios makes late payment". Polygon.com. Retrieved January 6, 2016.
- "Curt Schilling firm unable to cover $1.1m check, may miss payroll". Boston Globe. May 17, 2012. Archived from the original on May 20, 2012. Retrieved December 14, 2015.
- Farrell, Michael B. (November 1, 2012). "Rhode Island sues 38 Studios to recoup losses". Boston Globe.
- "R.I. Gov. Chafee: 38 Studios makes $1.1-million payment; payment clears". Providence Journal. May 18, 2012. Retrieved May 21, 2012.
- Nesi, Ted (May 23, 2012). "38 Studios loses CEO and high-profile VP, LinkedIn suggests". WPRI-TV.
- Forer, Ben (June 22, 2012). "Curt Schilling Says He Lost $50 Million On Video Game Company". ABCnews.go.com. Retrieved January 7, 2015.
- Bramson, Kate. "R.I. state police to release 38 Studios documents". providencejournal.com. Retrieved 2017-05-30.
- "RI, law firm strike $4.4M agreement on 38 Studios". ESPN.com. Associated Press. June 27, 2014. Retrieved June 28, 2014.
- "Rhode Island agency reaches $12.5 million settlement with 4 defendants in 38 Studios lawsuit". Fox Business. 2015-08-07. Retrieved 2017-05-30.
- Nesi, Ted; Machado, Steph (2016-08-23). "RI agrees to $26M settlement with Wells Fargo, Barclays in 38 Studios lawsuit". WPRI 12 Eyewitness News. Retrieved 2017-05-30.
- Krause, Nancy; Machado, Steph (2016-09-19). "RI reaches settlement with Schilling, others in 38 Studios lawsuit". WPRI 12 Eyewitness News. Retrieved 2017-05-30.
- Nesi, Ted; Pliner, Jared (2017-02-01). "RI settles for $16M with last defendant in 38 Studios lawsuit". WPRI 12 Eyewitness News. Retrieved 2017-05-30.
- Campbell, Susan; Nesi, Ted (19 May 2014). "38 Studios insider’s email urged execs not to disclose". WPRI-TV. CBS Interactive. Retrieved 20 May 2014.
- Marino, Jon. "Wells Fargo charged with fraud in 38 Studios case". CNBC. Retrieved 9 March 2016.
- Good, Owen S. "Feds allege fraud by bank, agency who made $75 million loan to 38 Studios". Polygon. Retrieved 9 March 2016.
- Bramson, Kate. "RI Commerce agrees to $50K penalty to SEC for role in 38 Studios deal". providencejournal.com. Retrieved 2017-05-30.
- "SEC.gov | SEC Charges Rhode Island Agency and Wells Fargo With Fraud in 38 Studios Bond Offering". www.sec.gov. Retrieved 2017-05-30.
- Rad, Chloi (29 July 2016). "Kingdoms of Amalur Devs Not Indicted With Criminal Charges". IGN. j2 Global. Retrieved 30 July 2016.
- RI.gov. "Press Releases: Rhode Island Commerce Corporation Reaches $16 Million Dollar Settlement with First Southwest Company in 38 Studios Lawsuit". www.ri.gov. Retrieved 2017-05-30.
- End Game: Inside the Destruction of Curt Schilling's 38 Studios By Jason Schwartz Boston Magazine, August 2012, long article on company collapse.