38 Studios Is Closing Its Doors Today

In spite of strong sales of Kingdoms of Amalur: The Reckoning back in February and the promise of an MMO, the Rhode Island-based studio’s fortunes have been in a precipitous decline over the last two weeks.

It all started on May 14th with state of Rhode Island calling 38 Studios out for not paying back a $75 million loan which the developer received back in 2010. This lead to swift movement that week to get the state a past due $1.125 million while forgoing payroll for the entire studio, who receives their checks on the first and fifteen of each month.

What we didn’t know then was that a month earlier, Studio head Jennifer MacLean along with John Blackley and other senior staff were already out the door due to staffing reductions.

Now on the heels that the company’s health insurance has run out, The Verge is reporting that the entire staff has been laid off. As of May 15th, that would translate to somewhere around 379 employees, including staff at Baltimore-based Big Huge Games. Gamasutra has followed up with a letter to the staff notifying them of their dismissal:

The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.

Kingdoms of Amalur sold around 330,000 copies in its first month through publisher EA. The open world dark fantasy RPG, which counted artist and Image Comics founder as one of the people behind the unique look of the game and a script by novelist R.A. Salvatore, garnered pretty positive notices from critics (and I have to say I dug it too).

Meanwhile, as recently as Monday, the studio was still showing off its upcoming MMO Copernicus, with the governor of Rhode Island Lincoln Chaffee saying that the game was expected to be out in June of 2013. Were that project stands now is anyone’s guess.

Embedded from www.youtube.com.