38 studios Auction Nov 14th and 15th.

We were close to getting investment from a major Chinese publisher who was very interested in the game. I was actually in the room demoing one of my zones for them when they were in Providence. It was a very positive reception and while I wasn't privy to all the business-talk that meeting ended with my impression being that we were good.

Also, what a lot of people still don't understand about the RI funding deal is that we never got the full sum all at once. The way it worked is 38 got set amounts every few months or something like that, and the only reason we ran out of money is because suddenly RI didn't pay up. It's not like it was just complete mismanagement (although there was some of that) - the money was supposed to keep coming and they had planned for those deposits to be reliable. When the board tried to figure out what was going on, that's when they realized what Chafee was up to (and had been scheming for awhile, most likely) and suddenly he started publicly bashing us as well. I think it's pretty ridiculous to call Reckoning a flop. Even if it didn't sell Skyrim numbers it was a brand new IP that did pretty well for what it was and I feel would've birthed a much more successful sequel. No one was unhappy with Reckoning numbers.

Anyway, I think the game would've struggled in the end as much as I liked it after seeing how GW2 and Neverwinter are viewed as "successful" and yet they aren't really financially massive hits. We were going to end up offering a similar F2P title but likely with a much greater need to make a lot of money early on and I just don't know that it would have done that. Who knows. Still, I think Chafee's political plays just hurt the state more than letting us ship the thing and a Reckoning sequel which was in the planning stages. I think even if 38 eventually went under, which was a very real possibility, we likely could've at least gotten the debts paid first.

Grave_sl said:

We were close to getting investment from a major Chinese publisher who was very interested in the game. I was actually in the room demoing one of my zones for them when they were in Providence. It was a very positive reception and while I wasn't privy to all the business-talk that meeting ended with my impression being that we were good.

Also, what a lot of people still don't understand about the RI funding deal is that we never got the full sum all at once. The way it worked is 38 got set amounts every few months or something like that, and the only reason we ran out of money is because suddenly RI didn't pay up. It's not like it was just complete mismanagement (although there was some of that) - the money was supposed to keep coming and they had planned for those deposits to be reliable. When the board tried to figure out what was going on, that's when they realized what Chafee was up to (and had been scheming for awhile, most likely) and suddenly he started publicly bashing us as well. I think it's pretty ridiculous to call Reckoning a flop. Even if it didn't sell Skyrim numbers it was a brand new IP that did pretty well for what it was and I feel would've birthed a much more successful sequel. No one was unhappy with Reckoning numbers.

Anyway, I think the game would've struggled in the end as much as I liked it after seeing how GW2 and Neverwinter are viewed as "successful" and yet they aren't really financially massive hits. We were going to end up offering a similar F2P title but likely with a much greater need to make a lot of money early on and I just don't know that it would have done that. Who knows. Still, I think Chafee's political plays just hurt the state more than letting us ship the thing and a Reckoning sequel which was in the planning stages. I think even if 38 eventually went under, which was a very real possibility, we likely could've at least gotten the debts paid first.

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Interesting, thank you for the insight.

It's true. I was one of the people this happened to and I'm still paying on that fucking bill.

However, Curt is not to blame. He was the face of the company so he gets a lot of flak, but it's completely illogical to think a guy like Curt had anything to do with finances/benefits/management. He had zero part in that once they weren't a 10-person startup. I disagree with Curt on a ton of things regarding religion/politics but at the end of the day my opinion of him is pretty high. He's a fantastic guy and he only ever had good intentions with the decisions he did get to make. His role in the latter days was like a coach and father-figure to what he always called the "38 Family" and you could tell it was 100% genuine. He loved the company and the people and you knew it. I think the problem was he surrounded himself with the wrong people on the business end and got in with some shady people in RI as well and his naivety and trust in others got the better of him and it was too late by then. I don't think he even saw the problems coming and when they hit he was willing to go to bat and be in the public eye trying to straighten it out, because that's just Curt. Not our CEO, not the guys who were actually responsible for finances, Curt went out there to take all the shit.

It's unfortunate really, because ultimately this was just a dude that is super passionate about games and wanted to make something different and provide a workplace that was better and healthier than other studios where we would feel at home. He did that. But instead of it being a realized dream that went on to be something really great it's now this nightmare that will honestly affect him more than any of us for the rest of his life. Yeah, it sucked for the average designer like me, but I bounced back and I'm financially stable and moving up in my career (a career that Curt made possible for me, by the way, because he dug this community) while Curt will probably never really be able to put this shit behind him completely. I just can't place any blame on him for trying and making such an awesome studio that I still miss. And like I said, even if we did ultimately fail, we only went out with all this drama and in a way that hurt employees because of Chafee.

Grave, thanks for your insights. Can I ask what are your opinions of the IP and assets not selling?

I think its ridiculous that Rhode Island expects so much (i read an article where they were quoted wanting in the "tens of millions" range) and won't just sell to the highest bidder. Personally I think that's more political sabotage by the way. Yes, its not worth much, but the IP has value as proven by a successful Reckoning, and even the assets have some, too. By the way the art team was clearly very talented.

Grave_sl said:

We were close to getting investment from a major Chinese publisher who was very interested in the game. I was actually in the room demoing one of my zones for them when they were in Providence. It was a very positive reception and while I wasn't privy to all the business-talk that meeting ended with my impression being that we were good.

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my wifes half chinese and I have done quite a bit of business in china, one thing that westerners don't realize about asians is that THEY NEVER SAY NO. If you are doing a business deal it can be crazy hard to pin down details, while we are used to people just saying straight up "nah this isn't for us good luck!" in China you will hear weird stuff like "this is very, very good we will get back to you" which completely translates to "no!". You need three things to get any deal done with a chinese company: (1) native speaker to translate the nuances (2) someone who is connected to a high ranking government official (the govt has final say on all deals) (3) someone in the other company who you have bribed to be your champion. usually multiple people. ANY deal where money leaves China and comes out takes, at minimum, 1 year to get done.

I'd guess 38S had basically none of these things, again showing the naivete of the management team. I said before, its much more common for chinese companies to try and get as much info from you during "due diligence" and then just copy your ideas, since copyright law is very lax in China they don't really view copying ideas as stealing, its just whoever can execute the ideas the best "wins".

Dahkoht_sl said:

Fair enough , and sorry that happened to you btw personally. I guess I'm big on the buck stops with the head guy as far as blame goes and that's why I got a bad opinion of him when I heard this sort of stuff , but you obviously knew the situation better.

Maybe just extreme naivety and trust in folks on his part to run it right , pay the insurance bills , and by the time he found out it was too late is easier to stomach to hear about him than he had direct roll in it.

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Well the buck still did stop with Curt. No matter how you look at it, he was still responsible for a clearly bloated and incompetent executive staff. He didn't know shit was being mismanaged? It was his responsibility to. He refused to give up any significant ownership. He could clean house in a day if he wanted to. But my understanding is Curt wouldn't listen. When he had competent people telling him what was wrong, he forced them out (ie Brett Close) and replaced him with a clearly unqualified yes man- err woman in Jen Maclean.

ThunderCougarFalconBird_sl said:

Grave, thanks for your insights. Can I ask what are your opinions of the IP and assets not selling?

I think its ridiculous that Rhode Island expects so much (i read an article where they were quoted wanting in the "tens of millions" range) and won't just sell to the highest bidder. Personally I think that's more political sabotage by the way. Yes, its not worth much, but the IP has value as proven by a successful Reckoning, and even the assets have some, too. By the way the art team was clearly very talented.

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Greatest art team I've ever seen. Many of them went on to do work on Bioshock Infinite, EQ Next, Pixar films, etc. I'm really glad we're at least seeing their talent, but it's truly a shame that the combined unit never got to show the world their finished product. The leaked stuff doesn't do it justice.

Anyway, I don't really keep up with the auction stuff because I'd rather just put it behind me. It is possible that it's further sabotage and Chafee just wants to continue being able to say "I told you so." However, even more likely is just that at the end of the day it doesn't really matter how beautiful the art assets are or how much work had already been completed on it, it's pretty questionable to say that an unfinished game is worth X millions. You'd need a good team to be able to polish it up and ship and maintain it. The IP is the only tempting thing, and while Reckoning made some headway it was much more generic than the MMO and a studio could just make their own fantasy IP and likely do as well as a sequel to Reckoning would do assuming it was well made. I'm no business guy though. I have no clue. I assume it will never sell.

spronk_sl said:

my wifes half chinese and I have done quite a bit of business in china, one thing that westerners don't realize about asians is that THEY NEVER SAY NO. If you are doing a business deal it can be crazy hard to pin down details, while we are used to people just saying straight up "nah this isn't for us good luck!" in China you will hear weird stuff like "this is very, very good we will get back to you" which completely translates to "no!". You need three things to get any deal done with a chinese company: (1) native speaker to translate the nuances (2) someone who is connected to a high ranking government official (the govt has final say on all deals) (3) someone in the other company who you have bribed to be your champion. usually multiple people. ANY deal where money leaves China and comes out takes, at minimum, 1 year to get done.

I'd guess 38S had basically none of these things, again showing the naivete of the management team. I said before, its much more common for chinese companies to try and get as much info from you during "due diligence" and then just copy your ideas, since copyright law is very lax in China they don't really view copying ideas as stealing, its just whoever can execute the ideas the best "wins".

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Yeah, man, like I said my impression in the demo was positive but I have no clue what happened with it. I'm just a designer who was trying to show off some stuff to guys I couldn't communicate with.

However, on a lighter note, there was a fairly hilarious exchange that happened during that demo. They were looking at all of the different races and at one point they stop on the female Massariol, which was our cute short race sort of like a Halfling (I'm sure there are leaked pics somewhere on the net). Then the guy clicks on Dark Elf female, a much sexier and alluring race wearing black leather with cleavage and all that jazz. In broken English, he goes "we like these (he clicks back to Massariol), but could you make that more like this (he clicks back to Dark Elf)?"

I just had no idea what to say. The Producer finally piped up and just said that was something we could propose to the art team. We just sort of made shifty eyes at each other and moved on with the demo. Hilariously awkward.

spronk_sl said:

(2) someone who is connected to a high ranking government official (the govt has final say on all deals)

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I just wanted to corroborate this point, at least. If there isn't a member of the Chinese communist party physically sitting in the room during negotiations, you're not having "one week away" type negotiations with a large Chinese company. I find it hard to believe that an official representative came with the investor to RI for those meetings- most American companies have to send their delegation to China to work out any kind of details. And like Spronk said- this takes multiple meetings over many months because the communist party has to approve at every stage.

How long before everything blew up was the investor's Providence visit? Was it an initial visit where you were trying to get them on the hook, or was it presented as a formality because Curt had spent a lot of time in China working out the details previously?

Recalcitrant_sl said:

I just wanted to corroborate this point, at least. If there isn't a member of the Chinese communist party physically sitting in the room during negotiations, you're not having "one week away" type negotiations with a large Chinese company. I find it hard to believe that an official representative came with the investor to RI for those meetings-most American companies have to send their delegation to China to work out any kind of details.And like Spronk said- this takes multiple meetings over many months because the communist party has to approve at every stage.

How long before everything blew up was the investor's Providence visit? Was it an initial visit where you were trying to get them on the hook, or was it presented as a formality because Curt had spent a lot of time in China working out the details previously?

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For what its worth, I do clearly recall Curt leaving on a business trip to China. This was at release of Reckoning or shortly thereafter. I was following things pretty closely at that time.

They had been to China more than once before my demo. I don't know much else.

I was under the impression that the RI loan was in fact broken up over time, not all at once. Like many standard industry loans, like you get from a publisher, the bits was broken up based on the developer meeting milestones. RI didn't pay the last one because the Milestone was way past due.

Could be wrong. Just had that impression from all I read.

Curt fucked them, like he fucked himself.

Zhaun_sl said:

I was under the impression that the RI loan was in fact broken up over time, not all at once. Like many standard industry loans, like you get from a publisher, the bits was broken up based on the developer meeting milestones. RI didn't pay the last one because the Milestone was way past due.

Could be wrong. Just had that impression from all I read.

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Correct. Except we did meet the milestone.

Zhaun_sl said:

I was under the impression that the RI loan was in fact broken up over time, not all at once. Like many standard industry loans, like you get from a publisher, the bits was broken up based on the developer meeting milestones. RI didn't pay the last one because the Milestone was way past due.

Could be wrong. Just had that impression from all I read.

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R.I. had zero involvement in the game's actual production. They didn't want to, and the firm they hired out to "keep tabs" of its development apparently had no obligation to report anything substantial either. All part of the lawsuit.

RI didn't pay the last one not because any Milestone was missed, but because 38 missed payment on its first Loan installment. 38 executives were incapable of basic budgeting, although one could also argue the terms of the loan agreement basically made that impossible, too.

You fools, I have sold bonds like these.

The house makes a buck.

The liar gets his money.

My client gets screwed.

As I recall, if this company hadn't been a bloated pig of mismanagement and overreaching, they wouldn't have had to resort to fleecing Rhode Island in the first place.

ThunderCougarFalconBird_sl said:

R.I. had zero involvement in the game's actual production. They didn't want to, and the firm they hired out to "keep tabs" of its development apparently had no obligation to report anything substantial either. All part of the lawsuit.

RI didn't pay the last one not because any Milestone was missed, but because 38 missed payment on its first Loan installment. 38 executives were incapable of basic budgeting, although one could also argue the terms of the loan agreement basically made that impossible, too.

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Gotchagotcha.

Grave_sl said:

Correct. Except we did meet the milestone.

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Interesting comments, Grave. At face value the videos I saw mostly lookedveryrooted in the current crop of MMO tropes we've been dealing with for a while now, but Amalur was one I held out hope for and actually actively followed for years. I got a bit bitter about it when the big fallout happened, but for all his faults Curt seemed to be legitimately passionate about his world. I played the shit out of Reckoning, too, which I actually thoroughly enjoyed. That Jottunhessen video tour is fucking boss, such a shame we'll never see it.

Did you end up landing on your feet in game development elsewhere?