According to the Boston Herald, Rhode Island economic development officials are trying to keep Shilling’s 38 Studios from going under. This comes three months after the studios first video game release — Reckoning.
Rhode Island, in what looks like a poorly thought through move, lured 38 Studios away from Massachusetts last year. This was done by providing a $75 million loan guarantee to Schill’s studio. According to the Herald’s report, 38 Studios had received nearly $50 million in cash from Rhode Island’s loan as of mid-March.
As of last month, 38 Studios had sold over 400,000 copies of it’s first title in the U.S., according to NPD Group. Diving into those numbers; at $60 a pop that would mean abut $25M in revenue for 38 Studios. That’s a far cry from the apparent $50M the company has burnt through.
This next piece is the worst of the worst. It’s not for the squeamish.
In July 2010, the same month the EDC approved the loan guarantee, 38 Studios established a revolving line of credit with Schilling so it could borrow up to $4 million from him, according to the disclosure filing obtained by WPRI.com. Part of the taxpayer-guaranteed loan money was used to pay Schilling back.
That’s from WPRI. I have to assume Schilling is a moderately smart man at the very least. I start to wonder if Curt knew that the Reckoning project was doomed back in July 2010. That could be why Schilling wanted to move headquarters and take the loan from Rhode Island’s taxpayers. In turn, he was able to repay himself via the Rhode Island taxpayers’ dollars. It just seems to be a sneaky move if you ask me.
Based on these reports, it seems as if this game will be hard pressed to turn a profit. Some guy named R.A. Salvatore, a writer who helped develop the game, is scheduled to receive $1.5M from 38 Studios in October. Before that payment, 38 Studios has a payment scheduled to be sent to the Rhode Island government, which is apparently is deep doubt.
Personally, I take a rather hardline stance with all parties involved. Schilling’s baby, 38 Studios, looks like a joke all of a sudden. It’s certainly not time to write it completely off, but it’s starting to look like that’ll be the case sooner rather than later. Additionally, what kind of due diligence did the Rhode Island economic development board do here? If it’s true that 38 will be unable to make payments in short order, this thing seems have have gone bad extremely quickly.
For all the things that people dislike Curt Shilling for, this should put his reputation on the line more than anything else.
[via Boston Herald]