38 studios Auction Nov 14th and 15th.

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Z

ZProtoss

Golden Squire
395
15
Flight_sl said:
Going on from that I believe the State would have got all it's money back had it made the final decision on whether to further back 38S in favor of either offering further funds or holding off on killing 38S. I do believe the decision to close down 38S was a purely political move. Curt stated that he could have got outside investment if the State hadn't pulled the kill switch and I believe that too - it was probably the first time Curt was going to give up any considerable stock in the company.
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I don't think it was purely political, or at least I don't think that any rational, intelligent person who evaluated the situation would see a shutdown as purely political. Chafee himself might have closed it down out of purely political reasons, but lucky for him there were plenty of non-political reasons that would have led a more neutral observer to the same exact action. The reality is that video game development utterly devours money, and there's no way the state could have been guaranteed that they weren't just throwing more money down the drain.

In terms of outside investment, I don't think you can trust anything Curt says on that matter. There is literally no scenario you can imagine in where Curt would have said anything along the lines of, "The project is in a bad shape, we probably can't get outside investment." Which means that him saying that they could get investment is a completely meaningless criteria to use when evaluating RI's final decision.
 
F

Flight

Molten Core Raider
1,233
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ZProtoss_sl said:
I don't think it was purely political, or at least I don't think that any rational, intelligent person who evaluated the situation would see a shutdown as purely political. Chafee himself might have closed it down out of purely political reasons, but lucky for him there were plenty of non-political reasons that would have led a more neutral observer to the same exact action. The reality is that video game development utterly devours money, and there's no way the state could have been guaranteed that they weren't just throwing more money down the drain.

In terms of outside investment, I don't think you can trust anything Curt says on that matter. There is literally no scenario you can imagine in where Curt would have said anything along the lines of, "The project is in a bad shape, we probably can't get outside investment." Which means that him saying that they could get investment is a completely meaningless criteria to use when evaluating RI's final decision.
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Harvard Business School did a case study on 38S which has quite a bit of material in it that I haven't read anywhere else including critical feedback from Jen MacLean and others. As I said there was money out there but Curt was unwilling to give up any of his shares in the company until it was too late.

Personally I played a couple of MMOs in a guild with quite a number of the main devs at 38S and was speaking to them daily so I got some insight that wasn't generally available. They all believed in 38S and what they were doing on Copernicus.


As to whether they (Chaffee) could guarantee whether they were throwing money down the drain :

i) they did zero assessment of the state of the development of the game and the company before deciding whether to write off their investment so they absolutely had no knowledge of that;

ii) the way they publicly went about closing down the company ensured no-one would invest in the game - they didn't have to invest any further money and should at the very least have facilitated 38S seeking further investment instead of quite publicly pulling the kill switch.



I stand by my assertions - RI and Curt are equally to blame for the financial state of the company when it closed down due to the conditions of a loan that should never have been offered or accepted, but it's beyond doubt in my mind that Chafees stand was totally political and that he had numerous avenues open to him that would have ensured RI got far more money back.


Further reading :


RI gov. forced 38 Studios into bankruptcy, says former official

Former head of Rhode Island Economic Development Corp. accuses Lincoln Chafee of forcing Curt Schilling's company into financial failure


In court filings obtained by The Boston Globe, Keith Stokes claimed that Chafee impeded 38 Studios' efforts to restructure its debt or raise additional capital to keep the company afloat in late 2011 and early 2012.

The filing also claims that Chafee refused to meet with 38 Studios executives in 2011 to discuss the issues the Kingdoms of Amalur studio was facing. 38 Studios went bankrupt last year, leaving Rhode Island on the hook for an estimated $90 million related to a controversial $75 million loan that brought 38 Studios from Massachusetts to Rhode Island in 2010.

A spokesperson for Chafee's office had no comment when approached by The Boston Globe.

RI gov. forced 38 Studios into bankruptcy, says former official - GameSpot
 
C

Chesire_sl

shitlord
331
1
Well it is not a bad thing curt kept all those shares. Think of all the people who did not eat a shit sandwich cause they bought into the vision.
JDS uniphase anyone ? Sure it is going too 10000 , lot of poor bastards rode that bitch all the way down to single digits from 250
 
Erronius

Erronius

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Denaut_sl said:
The specific # of jobs was negotiated prior to any deal being struck and Curt did not have to take it if it was a bad. I mean, he could have said no thanks, or taken maybe ~$19M for the hundred people he actually needed. I looks to me like he wanted as much money, flat, as he could get so with a wink and a nod said, "Yeah sure, I'll hire 400 people." Trying to blame the state for "making" him hire too many people is bullshit, he agreed to itbeforehand. He signed the contract, he took the money, he's on the hook forhispromise. I have absolutely no sympathy for him, as far as I am concerned he scammed that state.
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It's almost as if you've read my posts and believe I want to absolve Curt of any responsibility.

I imagine that part of the reason that the amount loaned ballooned to something that was more than necessary was that with the way the state wanted to structure any deal that they'd essentially have to take a loan for $10 in order to cover costs of $5. Curt needed $10 so he had to go into the deal asking for $20. Of course 38S didn't NEED $20, but like Ukerric posted with the 'talking horse story' by this point Curt was probably desperate to a certain degree. And I'm sure that once the dollar amount was decided on - a dollar amount far above what they actually needed as a result of the loan being poorly structured - that the state then told Curt that if he wanted the figurative $20 loan that they would have to also hire a correspondingly higher number of people to match. So at that point the deal put Curt in the position of both taking a loan that was far larger than necessary as well as hiring so many people that the ROI on that hiring was terrible and it caused 38S to go into a failcascade with a quickness. Not to mention the interest payments...

Is Curt at fault? Sure. But what I am saying here is that the EDC screwed the pooch too - the way they insisted the deal be structured contributed to this train going off the track and wrecking. Sure, he could have refused (technically) but again as has been said already he was willing by that point to agree to some pretty bad terms. And as a comparison, look at some kinds of predatory lending - if you take the stance that the Curts of the world are solely at fault when they sign on, then why does anyone bother combating predatory lending at all and simply leave it as the individual's responsibility? Partially for the same reason that Curt took the EDC loan - he was somewhat desperate, even if that was in large part an issue of his own creation - and the EDC was able to get him to accept terms that I'd wager most in the industry would laugh at. The only truly odd thing is how incredibly short sighted and...well...how badly the EDC approached it's side of things. There was no way here that they were going to be able to recoup their investment if 38S folded, yet the very terms of the loan deal helped usher in the folding of 38S. Then you had Chafee come in and nuke everything from orbit for what was probably political considerations to a certain degree.

Denaut_sl said:
Now I don't know if the state would have given him a comparative $ amount for fewer actual people, but I see no reason to think it wouldn't have. It sounds to me like a bunch of blaming someone else for your cock-up which is pretty much all he has been doing since this went down. He is about as mature as a teenager.
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As I said above, I imagine that structuring payments tied to employment levels meant that for Curt and 38S to receive the amount of funding needed that they would have had to agree to a much larger loan than necessary. With this then creating a ticking time bomb of inflated salary costs draining what funding they just received. And just my 2 cents on the actual loan structure...I could possibly see this working if they were setting up a factory where they could start pumping out widgets to sell early on so that they could start a revenue stream to offset much of the loan conditions. But with the way MMOs are...you can start to see how this could all snowball and result in Curt having unrealistic expectations for the RPG.


Now after Chafee's little speech where he hinted at there being some amount of 'damning evidence', it's up for debate as to what that could possibly be until it comes out in the wash as the legal proceedings progress.
 
Z

ZProtoss

Golden Squire
395
15
Flight_sl said:
Personally I played a couple of MMOs in a guild with quite a number of the main devs at 38S and was speaking to them daily so I got some insight that wasn't generally available. They all believed in 38S and what they were doing on Copernicus.
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I'm sure your friends are good people and all, but they're not objective sources on whether or not the game had any prayer at all. I've known people who have worked on doomed games, and I can say with certainty a large percentage of them were drinking kool aid up until the very end. People who are working on a doomed project aren't always honest about where things are at - even to themselves.

As to whether they (Chaffee) could guarantee whether they were throwing money down the drain :

i) they did zero assessment of the state of the development of the game and the company before deciding whether to write off their investment so they absolutely had no knowledge of that;

ii) the way they publicly went about closing down the company ensured no-one would invest in the game - they didn't have to invest any further money and should at the very least have facilitated 38S seeking further investment instead of quite publicly pulling the kill switch.
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I'm not saying that Chaffee in particular didn't close the studio for purely political reasons. I'm saying that any objective analysis would have come to the same conclusion, so the State's reasoning was largely irrelevant. The game was nowhere near completion and would have needed a huge amount of funds to actually be released.


I stand by my assertions - RI and Curt are equally to blame for the financial state of the company when it closed down due to the conditions of a loan that should never have been offered or accepted, but it's beyond doubt in my mind that Chafees stand was totally political and that he had numerous avenues open to him that would have ensured RI got far more money back.
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Saying RI is equally to blame is a stretch. The reality is that Copernicus needed vast amounts of work to hit even a beta stage. 38 Studios mislead (whether knowingly or not) the State of RI to believe that the game could have been completed on that additional funding alone. Blaming RI for not investing more money on a hope and a prayer when they were already taken for fools earlier in the process is really absurd imo.
 
F

Flight

Molten Core Raider
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ZProtoss_sl said:
I'm saying that any objective analysis would have come to the same conclusion, so the State's reasoning was largely irrelevant.
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No-one knows that because no analysis happened. Certainly 38S staff on the development side believed it was feasible and said as much publicly here and on FoH.

ZProtoss_sl said:
Blaming RI for not investing more money on a hope and a prayer when they were already taken for fools earlier in the process is really absurd imo.
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No one is blaming them for not investing further, certainly not me. What I am saying is that Chafee pulled the kill switch earlier than he needed to, doing no risk assessment and ensuring RI got back the least amount of money possible. RI officials involved in the process agree on that and have testified as much in court.

I'm certainly not trying to absolve Curt from any blame here. He should have delegated authority to his executives and backed away from the company. He has to live with that knowledge and the 38S staff have to live with the consequences.
 
Denaut

Denaut

Trump's Staff
2,739
1,279
Ok, I think we are talking past each other a bit. There are essentially 3 parties in the mess. 38, the former Governor/EDC, and the rest of the state/taxpayers. The EDC used 38 to transfer money from the state/taxpayers to their finance buddies. In this scenario the state its taxpayers are the victim.

My professional opinion, for whatever it's worth, is that 38 never had a chance. Back when he formed the company I was still at Sigil working on VG and we all thought it was funny as shit, the biggest question was how hard and how fast the entire thing would collapse. After Sigil closed someone I worked with interviewed there, when I asked him about it he told me to stay as far from that place as possible, that it made the way VG was run look like a well oiled machine. I took his advice. It might have gotten better later, but to me it was indicative of just how poorly things were run internally and why they couldn't get money from a traditional source. This is why I think Chafee didn't hurt the company or its chances, there already were none. It was done, stick a fork in it. Not giving them the reserve (and thus forcing the bankruptcy) was the right call. He should have taken it a step further and refused to guarantee the loan, it was a scam form the start and that would have been just.
 
Z

ZProtoss

Golden Squire
395
15
Flight_sl said:
No-one knows that because no analysis happened. Certainly 38S staff on the development side believed it was feasible and said as much publicly here and on FoH.
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38 Studios staff members are essentially a worthless source of information. Sorry. If people are in a company right up until the time it goes under, you're generally going to get very biased information. Objective information (ie: evaluating the management of the company, actual proof of work that was leaked, etc) strongly leads one to believe that the game was eons away from release. This is a case where you have to disregard the biased accounts and look at the objective information that we have. And the objective information says that the game was going to take a massive amount of money to finish.

No one is blaming them for not investing further, certainly not me. What I am saying is that Chafee pulled the kill switch earlier than he needed to, doing no risk assessment and ensuring RI got back the least amount of money possible. RI officials involved in the process agree on that and have testified as much in court.
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Any scenario in where the game was actually released and somehow turned a profit would have requiredfarmore money than what 38 was begging for at the end. Chafee might not have directly known that, but pulling the kill switch was absolutely the right decision. The project was fucked and as Denault just said, probably never had a chance of success to begin with.
 
Siddar

Siddar

Bronze Baronet of the Realm
6,463
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If RI had conditioned its loan on 38s matching the loan on a dollar to dollar basis with private funds things would have turned out different. Curt put in 30 million, RI 75 million, +45 million in missing private capital and Curts MMOG would have made it to launch.

Curt would have at best retained 50.1% of company at that point though. The failure of RI to demand more private money as a condition of the loan and failure of 38s to exploit the fact that it had a 75 million dollar loan to fund half the development of its MMOG to seek new capital when it looked like a good bet to invest were huge blunders.
 
Z

ZProtoss

Golden Squire
395
15
Siddar_sl said:
If RI had conditioned its loan on 38s matching the loan on a dollar to dollar basis with private funds things would have turned out different. Curt put in 30 million, RI 75 million, +45 million in missing private capital and Curts MMOG would have made it to launch.
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I really think this part is debatable. People severely underestimate the ability for MMO companies to piss away money when they have terrible management. Case in point: Firefall has had what's probably close to 150 million invested in it now and still has nothing to show for it. Why? Because the management of the company was/is fucked to the point that content comes out at a beyond glacial pace.

38 Studios seemed so profoundly fucked up that even another 75 million as a gift might not have been enough to get a decent product to release. Bear in mind that they were so far behind on development that there weren't even any gameplay videos to leak when the company blew up. They had already spent a ton of time on the game and had almost nothing to show for it. Thinking that they'd somehow turn out a profitable product by throwing more money at them is much less of a sure thing than Curt or any former employees of 38 studios would have you believe
 
Big Phoenix

Big Phoenix

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Wistow is leading the state's efforts to recoup any possible taxpayer money. Once 38 Studios failed, taxpayers were left on the hook to repay principal and interest on the bonds, an amount that could total more than $100 million.
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How does that happen?
 
spronk

spronk

FPS noob
23,490
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Big Phoenix_sl said:
How does that happen?
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interest is a bitch. people always confuse what happened here, Rhode Island didn't hand over money to curt or anything. They just told the banks that made the loans that no matter what, the banks are safe - if 38S fails to repay them, RI will step in and repay them (loan guarantees). So of the $75m that 38S borrowed, the total repayment will be probably something like $125m (again, interest/vig/loansharking/etc is a bitch) with $50m due this year, $10m due every year after for the next 8 years, or whatever terms the loans were.

anyone who has bought a house and isn't shitty at math has seen this too. a 30 year loan on a $300k @ 5% house ends up costing you $600k.
 
othree

othree

Bronze Knight of the Realm
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Also gotta say, I really enjoy the style of art they were using. Not too cartoony, but not too realistic looking. Really liked it. Too bad.
 
Jysin

Jysin

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That's about as much of a WoW clone as you can get!

rrr_img_55972.jpg
 
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