The acquisition by 38 Studios of Big Huge Games from production studio and developer THQ, whose Rise of Nations (a real-time strategy game similar to the Age of Empires series by Ensemble Studios) IP didn’t give the independent studio enough credit for the larger publisher to keep, proved a positive strategy for the company. Development for their killer app began in 2009, as Big Huge Games had already been developing another RPG, which they subsequently absorbed to fit the Kingdoms of Amalur mythos in order to create a larger, more impactful title.
However, heavy competition was hedged against the release of newcomer Amalur with Bethesda’s best-selling Elder Scrolls: Skyrim, affecting some of its revenue. Though the title gained over 1.2 million sales in the US 90 days after its release, it failed to meet the projected 3 million sales goal needed to keep the IP going to further production on newer titles. Financial turmoil hit 38 Studios in its fifth year in May of this year, as the company was forced to file bankruptcy after it failed to produce the needed $1.25 million necessary to sustain business in Rhode Island.
38 Studios acquired $75 million from private investors channeling money through the Rhode Island Economic Development Corporation (RIEDC), a somewhat public, somewhat privatized company created to ensure the economic stability of the state. I am speculating, but it seems as though there is no secret at this point that the corporation itself irresponsibly gambled tax payer money on a project that may or may not have proven lucrative in the long-run, as it is now the citizenship of Rhode Island that has to suffer from the downfall of the company. Through the RIEDC, 38 Studios was given a 6-7.75% interest rate on top of their debt to private investors, which the entire state is now responsible for in future taxation until the end of the year 2020. If there were ever a Ponzi scheme that included tax payer fraud, this would be it.