38 Studios Lays Off Employees Over Funding Debacle

38 studios layoffs

It was only a matter of times once things started going south at 38 Studios earlier this month, but it appears that the employees at both that studio and Big Huge Games have been laid off.

Ever since 38 Studios bailed on paying employee salaries to pay back their debt to the state of Rhode Island, the company had been looking for outside funding but apparently they failed to find it in time. Without another loan from the state, 38 Studios shut its doors today with this unceremonious email:

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 trouble apparently stemmed from the fact that Kingdoms of Amalur: Reckoning, the studio’s first published game, did not sell nearly as many copies as hoped. Reckoning sold 1.2 million copies but needed to move 3 million to be considered a success. That’s a rather high target, especially for an unproven IP with very little marketing from EA’s part.

What do you guys think of 38’s mass layoff? What’s you opinion on the situation in general?

Source – Giant Bomb

Written by

mitch@gamersushi.com Twitter: @mi7ch Gamertag: Lubeius PSN ID: Lubeius SteamID: Mister_L Origin/EA:Lube182 Currently Playing: PUBG, Rainbow 6: Siege, Assassin's Creed: Origins, Total War: Warhammer 2

6 thoughts on “38 Studios Lays Off Employees Over Funding Debacle”

  1. I for one am saddened by this news.

    I thought that Amalur was a good first outing, and was looking forward to what else this team could’ve come up with in the future.

  2. This is terrible and disheartening news. The fact that 1.2 million of sales in three months is considered a failure is a perfect example of the “blockbuster or bust” state of the industry right now.

  3. From what I understand, it needed 3 million just to break even. That’s no kind of plan for success. What happened over there???

  4. I like that they refer to it as “The Company”, capital C twice.

    It makes me uncomfortable to think of the business behind games and gaming sometimes, especially when stories like this come out. I don’t like it =/.

  5. [quote comment=”19361″]From what I understand, it needed 3 million just to break even. That’s no kind of plan for success. What happened over there???[/quote]

    Exactly! I’ve been seeing the headlines about this but not really paying attention to what happened. And I haven’t played the game but was planning on it. And though I’ve heard it’s good, how could an unproven studio design a first game that needs to sell 3 million copies to be successful? That’s almost begging to be shut down.

  6. I’m very disheartened by this news.

    I enjoyed Amalur immensely. It was the Fable a lot of people, including me, wanted.It’s a grand shame, as well as a horrible business plan, that selling 1.2 million copies constitutes a financial flop.

    My heart goes out to those who were laid off.

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