Rhode Island developers 38 Studios went bankrupt after making just one game: Kingdoms of Amalur: Reckoning. The game was an action RPG set in a high fantasy world from the minds of R. A. Salvatore and Todd McFarlane, and although it received good reviews and decent sales for a AAA title, the company's financials were handled so incompetently that the studio went bankrupt shortly after releasing their first game.
What made the 38 Studios bankruptcy so spectacular was the $75 million loan it had taken out from the Rhode Island commerce department to convince the company to move from Michigan to Rhode Island. The loan was meant to facilitate the move and to help with the company's operating costs, but it was too big for 38 Studios to service based on just one game's worth of sales. That and senior executives at 38 Studios tended to be very liberal with their spending on the company dime.
Although Kingdoms of Amalur sold 1.2 million units in its first 90 days, the company declared bankruptcy in May 2012, but not before 38 Studios’ CEO and senior executives all quietly left the company to try and avoid the fallout.
Related: 11 Things We Wish We Knew Before Starting Kingdoms Of Amalur: Re-Reckoning
And there was a lot of fallout. A massive lawsuit erupted from the bankruptcy that included the SEC, Rhode Island government, and senior staff at 38 Studios. As reported by GamesIndustry.biz, the developer owed $150 million between 1,000 creditors. It’s taken nine years for the courts to sourt of that debt, and at the end of it all, former 38 Studios employees are only getting a fraction of their final paycheck.
As Bloomberg reports, the roughly 400 former 38 Studios employees are getting between 14 and 20% of their final pay, depending on whether they worked at the Rhode Island or Maryland studio. Many of those payments are also being sent to old addresses as nearly everyone has moved on in the nine years since 38 Studios dissolved.
As for Kingdoms of Amalur, the rights to the game were picked up by THQ Nordic in 2018, which released the remastered Kingdoms of Amalur: Re-Reckoning just last year. It’s a decent remaster for fans of the original, although none of the remasters’ sales are going to help former 38 Studios employees.
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