Originally posted by elocke
Let this be precedent to never allow Government any portion of this industry.  Or any other industry for that matter, ;D

I think the bigger thing is don't use projected estimated income as proof that you can pay for your loans.

Rhode Island offered them a ton of money to move there thinking based on false information.  From what I've seen the whole thing is shady.. and having a politician anywhere near it isn't good for trying to skirt regulations.

Originally posted by Dakirn

Originally posted by elocke
Let this be precedent to never allow Government any portion of this industry.  Or any other industry for that matter, ;D

I think the bigger thing is don't use projected estimated income as proof that you can pay for your loans.

 

Rhode Island offered them a ton of money to move there thinking based on false information.  From what I've seen the whole thing is shady.. and having a politician anywhere near it isn't good for trying to skirt regulations.

I thought the moral of the story is don't loan someone millions of dollars for a business idea just because they won a World Series...

Originally posted by Trionicus

The state of Rhode Island REALLY had money to lend to a game studio? Somethings wrong with this picture or maybe I'm being too logical.

 

Well, this is what a google search pulled up about RI in 2008, in 2012 still not so great. KOA: Reckoning should have been free for all residents of Rhode Island, this is just sad all around. Fail state lending money to a company, who in turn fails. In the end, the residents of RI are fitting the bill?

 

I must be missing something here, this is not making sense. Can anyone enlighten me?

Let me, as a former Boston indy game company CEO, elaborate this just a little bit.

Boston, Austin, SF, Toronto, Seattle, and maybe Montreal these days are the big centers of the gaming industry in North America (not in that order).  Rhode Island is the armpit of New England, and pretty much always has been.  It's the smallest state, and doesn't really have a lot to sustain itself, and it's been suffering badly.

But one thing that Providence does have is the Rhode Island School of Design, which recently has been making a push to try to attract and develop a game program.  RISD (pronounced Riz-dee) is a great school, really tops for design.  If they could spin up a game design program, they'd be top of their field.  Problem is, there are very few game companies in RI.

Well, here's Schiller, who is out on the128 beltway around Boston.  He's not beholden to Warner, like Turbine, he's his own man.  He's got this ambitious project, transmedia, big names, very hush hush so he can say anything he damn well wants.  It's the e-ticket for local hires in the Boston area -- a lot of people want in.  And RI comes to him and says, what will it take to get you to anchor our new constellation of game companies down in Providumps?  To drag all these stars of Boston (and Baltimore -- don't forget he acquired another pretty happening little company from down there and brought a bunch of them up here too!) down to somewhere far from the hub of the universe to feed our state's ambitions to be the next Austin?

And Schiller dug deep in their pockets and handed them back enough change to get them home that night on the bus.  And they bent over.

I was applying for a job there (the economy and entrepreneurial realities having eaten my little company at the time) when this all went down, and I was cursing a blue streak, because there was just no way I was moving to Rhode Island, and no way I was commuting three hours a day, minimum.  

Now, I don't feel quite so bad...:)  

And at the time, people were going to the governor of Masachusetts and saying, "How can you let RI do this?  Why don't you outbid them?  I mean, he's a Red Sox for f* sake!" and the gov just shook his head, and said, "I don't participate in this kind of bidding war."  And I'm sure you can all feel the glow of his smile from here right now. 

Why u ppl ask for happy ending this is THE END and its not happy cant u see?

This is BS. Part of it was not studio 38 fault becouse 1st of all state was the one wich asked studio 38 to go there and they would give em loan but befor KOA was ready they already started asking for their money wich was wierd for 38 coz they had not released the game even.

That just proves how F.ed up state is.

Originally posted by Razeekster

Originally posted by Reizla

Originally posted by Grotar89
Hope NCSoft buys it and gives it to ANet

...or Carabine...

Do not forget that ANet is more an Eastern MMO developer in style, while Carabine looks more Western in style. And to me Amalur is more Western in style. On the other hand, ANet will have 'enough free time' soon to pick up a new project...

That is totally false. ANet is most definitely a Western MMO developer. They always have been.

One of the reasons that I have no interest in GW2 is because the game looks far too anime/Eastern for my tastes (look at their version of Gnomes, whatever they are. Can you be more anime?).  So while it may not be as Eastern as your genuine Korean grinder, it is far more East than West. As such, Reizla's statement is not only not "totally false", but in fact, "mostly true".

Originally posted by Gentl3Man

Why u ppl ask for happy ending this is THE END and its not happy cant u see?

This is BS. Part of it was not studio 38 fault becouse 1st of all state was the one wich asked studio 38 to go there and they would give em loan but befor KOA was ready they already started asking for their money wich was wierd for 38 coz they had not released the game even.

That just proves how F.ed up state is.

 

38 Studios was out of money, end of story. Whether or not they made or did not make the required fee payment on their loan was not the problem. They were bankrupt, and no investors were willing to throw their money in. The missed payment to RI was just the public straw that broke the proverbial camel's back.

SWTOR's less-than-hoped for launch contributed to investor skittishness about sinking money into the MMO genre. The company was, sadly, poorly run and wasn't going to make it no matter what happened.

From WPRI:

In a decision Wednesday allowing the R.I. Economic Development Corporation to sell off 38 Studios’ assets, a federal judge barred the agency from selling “collateral containing any Epic Games Inc. software without Epic’s consent or order of the state court with jurisdiction over the receivership after prior notice to Epic.”

"And Schiller dug deep in their pockets and handed them back enough change to get them home that night on the bus.  And they bent over."

There's a lot of hostility towards Schilling (not Schiller, btw), but had the company been better managed and the project even modestly succeeded, the deal would have been great for both 38 Studios and RI.

38 Studios got some money up front in exchange for subjecting its employees to RI's income tax rates in the future. RI was not some innocent bystander. They took a risk, a small risk in the big scheme of things, for the chance at a far bigger reward. That's why states have Economic Development departments. They spend some taxpayer dollars in hopes of attracting businesses for the long term. Had the loan guarantee not gone to 38 Studios, it would have gone to some other company, probably with a much more limited upside.

Had 38 Studios succeeded, RI would have gotten the money for it's loan back, and it would have had a few hundred well-paid tech workers paying income tax, the company paying corporate tax, workers compensation taxes, etc. Then there would be all the extra jobs that would be created by the presence of a successful technology company. Then there was also another upside of RI possibly becoming, as youd said, a new technology hub. If 38 had succeeded, experienced employees would no doubt break off and create new games, attract new investment, etc.

RI's governor didn't just get charmed one day and issue the loan guarantee. RI did the financial modeling and saw the tremendous upside, and considering the loan was really only for $17 million (half the loan was kept in an escrow account to make the interest payments on the loan for the first 2 years as the game was developed).

Had 38 Studios' efforts worked out, RI would have reaped incredible benefits. As it stands now, the state is probably in the hole for about $10-15 million. If they sell the IP for $5-10 million (and considering they've already reaped several million in income taxes from employees as well as other taxes), they'll almost break even. Considering the rewards that RI _could_ have had, it probably was worth the gamble.

Given the crappy condition Providence and RI are in, the governor at the time had limited options for attracting companies to the area. They needed to take some kind of risk, and again, considering the upside for a such a small loan guarantee. Investing in a tech company that had already attracted over $100 million in private investment (i.e., it had been "vetted" by the private sector) was probably better than taking that money and throwing it at some politically connected scheme that is the common MO for these state Economic Development departments.

Originally posted by liquescent

From WPRI:

In a decision Wednesday allowing the R.I. Economic Development Corporation to sell off 38 Studios’ assets, a federal judge barred the agency from selling “collateral containing any Epic Games Inc. software without Epic’s consent or order of the state court with jurisdiction over the receivership after prior notice to Epic.”

 

 

Since 38 Studios were using the Unreal engine, I think this just means that whoever buys the assets can't just keep using the engine and publish the game without agreeing to the deal 38 Studios has worked out with Epic. These companies usually get a chunk of the game's revenue in return for not charging much initially for use of the engine while developing the game.