In the press coverage, I have seen a number of statements to the effect that the RI goverment's inflexibility contributed to the company's failure as well as the failure's abruptness. this article quotes Chafee as insisting on strict adherence to benchmarks (which appear to have included minimum staffing requirements) while at the same time denying that the value of the company had been destroyed by the complete staff layoffs caused by cash starvation.Originally Posted by Dave Weinstein
It's clear that Chafee did not value 38 as a going concern, and that he refused to allow the state to make any efforts to maintain whatever value the company possessed. In essence, RI foreclosed on the company. However, I don't believe the assets currently owned by RI (concept art, code, IP, etc.) as a result of the company's collapse come anywhere close to matching the loan value. Chafee's clueless statements regarding the employees "Well, they could be rehired. Some investor might come in." are compelling evidence that this guy is not dealing in honesty. 38 is dead, period.
I would be surprised if sale of the loan security could recover twenty cents on the dollar. I would think $5 mil for the Amalur IP (ten cents on the dollar) would be more realistic and even that might be a stretch. Destroying a company (in part, no way can it all be put on the creditor) through inflexibility and cluless posturing does not create an appearance of good stewardship by Chafee's administration. A typical creditor looking at a troubled asset tries to minimize the loss by preserving the asset's value (in this case the studio), while here Chafee did nothing to preserve value and several things to destroy value. The circumstances tell me that Chafee was not acting as a creditor as much as he was acting as a politician.
That said, I do think your position reflects the general public's perception of the situation.
It does seem that Chafee was inflexible but it also looks like Schilling sprung this mess on them after 38 was well out of money. Surely he must have known 6 months ago that they'd be in a tight cash position at this point because they had no other income. Why didn't he go to the governor then? Or work out a bridge loan? I wonder if he thought that he would have Chafee over a barrel and RI would be forced to pay.
Yeah. There's an awful lot of clearly superior writers who would work for much less money.
They must have known they were in trouble two years ago. Even in the game industry, there's such a thing as project plans.
Yeah, but he apparently hasn't received that much yet (and probably never will), and his $1.43M wouldn't have saved the company anyway. Ten million wouldn't have saved them. Probably not $20M either.
And, like Salvatore or not, but the time he spent working on this does have value in terms of the revenue he could have generated by writing his own books instead. The guy hits the bestseller list with frequency.
The real question is if his name on the project would help to drive sales when the game was ready for market? I don't know. If it wouldn't drive sales then I think the $1.43M is misspent. If it would add to sales in a substantial way (and add to the game as well, helping retention), he might be worth it.
Yeah - its just like those stupid movies that thinks they need a "writer" to make a good movie. Clearly Transformers shows otherwise!
I'm not really sure what point this passive-aggressive sniping is meant to convey, but I am sure that you entirely missed LMN8R's.
Yes. Clearly there's no middle-ground between hiring an excellent writer or two at low-six-figures and spending A MILLION AND FOUR HUNDRED SIXTY THOUSAND FUCKING DOLLARS.
I've said this before, but the thing is - In many business', the moment you start detailing towards people not in your company what the different costs go towards, people will start yelling. Its not that the final price is any hindrance or too big, but its when everything has been pricetagged, we have problems.
If you do not work in the company yourself, or knows exactly what has been agreed upon with the set price, often that price will seem exorbitant, or stupid, and at least the in the business I'm in (Print/Film Marketing), it actually isn't.
I can charge 1.4 million for our services, and people will pay it, gladly, since we know our business. If I tell them that 0.5 million of those money goes towards voiceovers, they will scream bloody murder. Its the same product, but their lack of knowledge of how we work makes it hard for them to understand.
So, my point is - We do not know exactly what the deal with Salvatore is, and what the money is for. We are speculating, and guessing, but saying its a sign of why the company was doomed is just internet tough guy bravado to me - Unless of course, LMN8R has worked with authors on MMO's before and knows what the business arrangement was, in which case I'll stand corrected. From what little I know of LMN8R though, I don't think so.
Anyways - apologies for the snide post - hope this makes up for it.
I guess that would depend on how much work is being done, who the writer is, and how long the project would involve writer. A million dollars is nothing to sneeze at, but there is no way paying for a writer was even close the primary problem here. Hell I think a lot of games could use a little kick in the writing direction and stop relaying on people who can write on the side.
When a writer commonly writers NYT Best Sellers and has a large following, that really isn't a lot of money.
Well it is actually; that's definitely at the high end of the fantasy author scale. Haven't heard of contract numbers, but in comparison hard SF writer Alistair Reynolds recently signed a 10-book deal that would yield roughly a million pounds per book. When you consider his general popularity and market appeal in the target demographic (despite what you think of him as a writer), the use of Salvatore makes a lot of sense.
--- Alan
Salvatore also lives in Mass. Curt might even have known him prior to starting the company.
I often hear the accusation that it's a german specific issue if people begrudge other people's salaries, for example of politicians or bankers, but that doesn't seem to be correct(?).
I mean, sure, that's a lot of money, an amount I'd probably have to work decades for to earn, but why is it that a writer can't get that much (or, put in different terms, a company can't pay a writer that much), yet it's ok to pay someone loads of more money for playing a ballgame or running a huge company into the ground (and/or making many folks lives more miserable by steamlining their jobs away) or for singing pop-songs or whatever?
_____
rezaf
No, capitalism is failing. Comunism failed because the inhability to put a fair price on goods. Capitalism is failing because is not rewarding the people that create value, but mostly the wrong people, the most powerful.
I'd also wager having a "Story by R. A. Salvatore" would be worth money.
R. A. Salvatore's Game is worth $1.5 mil. He is the Nora Roberts of D&D.
I agree. I don't know if it's worth a million and a half dollars, but Salvatore's name carries a lot of weight in the fantasy genre fandom. Just having his name on there may have increased sales. Of course, we'll never know because the whole thing is in the pooper now, but people seem really hung up on this one issue. I'd say the bigger problem was the $4 million a month operating expenses.
What I was thinking as well - you're not only paying for his creative, but the intrinsic value of having his name attached to the game/lore/etc and the marketing aspect of that.
Also, keep in mind that it's not like R.A. swooped in, worked for a couple of weeks and collected a check. He's been working with the company for years. And unless I'm mistaken, he wasn't just writing a single story plot, he was writing, essentially, Dungeons & Dragons. That sounds silly, but go pick up the stack of books from back in the day - the Monster Manuals, Fiend Folio, Deities & Demigods, etc - and every critter on every page has at least a couple of paragraphs about the history of that thing. That's world building, and that's what R.A. was doing. It isn't just "This is a bugbear." It's "A bugbear came to being because...."
The way this was all allowed to just come to a head and result in catastrophic failure points to some serious management issues. It's possible (heck, even probable) that a lot was going on behind the scenes to stave this off, and that those efforts aren't and probably never will be public. That said, I think Miramon's right -- with the revelation that they knew they were getting a flat fee for Reckoning,* it looks like they just financially mismanaged the heck out of this project. It's not like they had a complicated equation where the amount of money coming in and going out was fluctuating wildly.
For those of you working in game development, how common is the kind of silliness that was mentioned regarding relocation issues? The companies I've worked with/for have offered relocation payments, typically consisting of a set amount of cash to get you to uproot your life and move it somewhere else, but I've never heard of a company taking over mortgage payments on your old house and selling it for you. Well, not for anyone who wasn't a senior executive and was being paid a lot more than they were worth, anyway. It seems crazy that 38 was doing this for lots of people.
Lastly, while I'm not a fan of the whole approach RI took here, you've got to recognize that 38 Studios would likely have died about 2 years ago without the RI money. The state loaned them an extraordinary amount of money -- $78M! -- and 38 still wasn't able to put out their game. To me, that speaks to mismanagement, likely including scope creep, miscommunication, misallocation of assets, etc., not to mention financial management issues.
* If they were getting a % on Reckoning, and Reckoning had sold extremely poorly, then there might be an argument for them having been caught unawares. From what's posted upthread, however, it doesn't seem like that's the case, in which case any middle school student should have been able to do the math.
I'd wager it's as unheard of in the game industry as it is everywhere else. But I believe Curt was trying to recreate the corporate atmosphere that doesn't exist anymore.
My father worked for Prudential for over 40 years. In that time, he was relocated on 4 occasions. Every time they relocated him, they bought his existing house from him at market value and then sold it at their leisure (it helped that Prudential had a Realty division, but still). There was a time when companies did that sort of thing, and paid for healthcare, and had pensions, and lots of other stuff that simply isn't done most places these days.
I don't think that's why communism fails; but I think that's a good insight into a fundamental problem with capitalism. If you can reconstrue your first sentence maybe you can come up with a nice little apothegm.
Maybe something like "Communism fails because it discourages people from creating value; capitalism fails because it rewards the wrong people."
Both Adam Smith and Karl Marx start from the same basic principles and share some assumptions; they just wind up in different places.
Communism also fails because it sucks ass. Hello??? Why the fuck are we talking about this?
As for relocation, on general employees I don't think I've ever heard this being done. For execs, sure. But I can't ever recall hearing of a relo package that let Joe Blow actually do that. Bonuses with extra pay for expenses and even temporary housing and real estate agents, sure.
--- Alan
Do you really believe that? Really? 38 Studios going under and causing problems for their employees is that rare.
What about the oil/power company that went under 10 =/- years ago. Remember that.
We haven't seen any evidence that 38 Studios acted maliciously towards their employees at all. When companies fail, everyone gets screwed over. Curt put $50 million into the company and he's not getting that back. Yes, he's in a much better position today than the employee out looking for work but he also is going to be in the Hall of Fame and they aren't.
I worked on a MMO that wasted millions of dollars (Horizons) and until they got management in there with the sole purpose of shipping the damn game as quickly as possible they were going to continue wasting money. No one screwed me insomuch as game development start ups are super risky.
I was being sarcastic. If that doesn't come across in that post then it never will. Maybe I needed a ? after that sentence.
My point is when companies go under, and it happens all the time, employees suffer along with everyone else owed money.
Totally off-topic, but I really liked Horizons even in the much-revamped state in which it shipped. I always thought that game got screwed by it's upper management, with their pipe dream design ideals and way too much talking out of their asses when they should have been producing working code. After the new management actually saw the game through to release I really enjoyed the end result. A lot of hard work and effort went into creating some pretty unique concepts for Horizons, and while not all the concepts made the end product intact I still appreciated that the effort was made. What I'm saying is "thank you" Ulairi for the work you put into a game which I personally enjoyed playing for many hours. I'm sure we both wish things had turned out differently for that game, but in the end I still had a lot of fun with it.
Thanks as well to anyone here who worked on Kingdoms of Amular. I haven't played it yet, but I plan to. Best of luck to everyone laid off and here's hoping another studio picks them all up quickly.
Yeah that's unrealistic and would explain why in other parts of the world we're not seeing the starts up like we are here. Start ups are risky. Going to go work for one you take on risk that it may not work out and you may be out of a job at any moment. But, the pay offs are much larger than going to work for an established company.
So is 38 Studios worse than Enron?
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