More news on the swiftly unfolding drama surrounding Curt Schilling's beleagured development house 38 Studios: According to Schilling, a sequel to Kingdoms of Amalur: Reckoning was in pre-production, and the State of Rhode Island scared potential investors away from 38 by implying the company was in danger of insolvency. Schilling said that he stands to lose $50 million of his own money.
Schilling says an unnamed video-game publisher pulled out of a $35-million deal to finance the sequel to Kingdoms of Amalur: Reckoning, within three days of governor Lincoln Chafee's press conference about the financial troubles of 38 Studios.
Chafee, who was not in favor of Rhode lending 38 Studios $75 Million in order to lure them to the state to begin with, said Kingdoms of Amalur was a failure, pointing out that the game would have had to have sold more than 3 million copies to have broken even. The game sold around 1.2 million according to Schilling -- which is a great number for a new IP, but well short of profitability.
According to sources close to the matter, Rhode Island's loan to 38 Studios was no for the development of Kingdoms of Amalur, but all that money was for a planned MMO, code-named "Copernicus."
Right now, the fate of 38 is in limbo. The company has no employees--they were all laid off last week -- but does have a ton of debt. Rhode Island may end up on the hook for around $100 million bucks. Should 38 Studios declare bancrupcty (which seems pretty likely to me), the company's intellectual property and other assets would likely be owned by the State of Rhode Island. Rhode Island-as-game-developer is an awesome thought, but it probably won't happen. R.I. would almost certainly sell the assets of 38.
How much 38 Studios is actually worth is an interesting question. We don't know how far the company was along on its planned MMO, code-named "Copernicus," but there are some screenshots and even a flythrough video for the game. Other than that, there are now no employees, and one moderately well-received and successful game. According to industry analyst Michael Pachter, the Amalur IP is worth around $20 million.
"Nobody is buying MMOs after [Star Wars: The Old Republic] fizzled," he said. "I think value is low, probably $20 million or so. There is just no demand for game assets right now, as THQ proved when it tried to sell the Warhammer MMO. I think [Electronic Arts] could step in, since they are the publisher, so you might see some alternative way to get [38 Studios] some bridge financing."
Rhode Island's governor is holding a press conference this afternoon, and I, for one, will be glued to it like it's the most interesting soap opera ever made. I'll tell you more as it develops.