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Schilling's 38 Studios Moving To Rhode Island
Schilling's 38 Studios Moving To Rhode Island
July 27, 2010 | By Kris Graft

July 27, 2010 | By Kris Graft
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Former Boston Red Sox pitcher Curt Schilling's online game company 38 Studios will leave Maynard, Massachusetts and head to Rhode Island, which agreed to sign a controversial $75 million loan guarantee.

The luring of Schilling's company, which has yet to release a game, is an initial step in Rhode Island's bid to make the state more inviting for video game development, according to a report in The Boston Globe. The Rhode Island Economic Development Corp. voted 8 to 1 in favor of the loan guarantee.

But the loan guarantee has already drawn criticism from gubernatorial candidates in Massachusetts and Rhode Island, who expressed concern that taxpayers would be left with the burden of the $75 million loan default if 38 Studios failed.

Massachusetts independent candidate Tim Cahill said the loan was "an extraordinary amount of money," adding, "I don't think as a matter of policy it's a good idea to give tax credits to individual companies betting on their success."

Former Republican U.S. senator and Rhode Island independent gubernatorial candidate Lincoln Chaffee called the unsecured loan an "unacceptable gamble to ask the taxpayers of Rhode Island to take."

If successful, the company could attract 450 jobs to Rhode Island by the end of 2012, the studio said. 38 Studios also said it would pay a penalty if it comes up short. According to The Boston Globe, the state will not directly loan the money, but act essentially as a cosigner on the loan.

Rhode Island governor Don Carcieri said that the loan agreement was a "risk," but one "worth taking."

The company's first game will be the recently-revealed single-player console and PC RPG Kingdoms of Amalur: Reckoning, due in fall 2011. The game was already in development when 38 Studios acquired Maryland-based developer Big Huge Games in May 2009.

38 Studios is also working on the MMOG codenamed Copernicus, a fantasy online game built from the ground up at the studio.

The video game market is littered with failed MMO attempts. 38 Studios has tried to mitigate the risk of introducing a new fantasy MMORPG into a World of Warcraft-dominated market by hiring experienced executive and creative talent that have established careers in the games industry.

"Iíve invested a significant amount of my lifeís earnings in 38 Studios, and I will protect the loan guarantee thatís been given by the state with the same passion and interest that Iím protecting my own investment in this company," said Schilling, who recently claimed to have invested the "majority" of his life earnings into the venture. "Our paths are very much aligned."

At least one Massachusetts-based developer is against 38 Studios' move. William D. Reed, CEO with independent Cambridge developer Demiurge (Green Day Rock Band) wrote a last-ditch effort open letter to Schilling.

"Curt, we love our home state of Massachusetts," Reed wrote. "In the end, if you really move your company down to Pawtucket, it will be a loss for the Boston game community." Other Massachusetts game developers include Harmonix Music Systems and Irrational Games.


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Comments


Ichiro Lambe
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I'm sorry to see them leave -- the handful of people I met from 38 seemed pretty cool. But the Boston area game dev scene is alive and thriving (even if the latest list is a bit out-of-date: http://bit.ly/dzjkiJ).

Jason Beene
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Could we not expand our thinking to consider what we have here as a "New England" Game Dev Community? Who cares about state lines? Travel time from downtown Boston to Maynard (38's current location) is roughly equal to traveling Boston to New Hampshire...and even say Boston to Providence. Roughly all a 45 min jaunt...You'd have a hard time crossing greater LA or Silicon Valley in the same time. We know New England is a small place...heck, you take a wrong turn in Prov and you could easily find yourself in Mass in a few minutes. I fail to see the move as a loss to our greater dev community....in fact, expanding the reach of our craft throughout New England is nothing less of a win. I also feel the need to point out that there are also a significant number of employees from local Boston-based studios that call RI and New Hampshire home(including myself). These are beautiful, vibrant places to live...and frankly bring important goals like home ownership within reach to the baseline employee. It's feasible to live in Providence, work in Boston, and play in New Hampshire (or whatever arrangement suits you best)...that is what's wonderful about New England. I think 38 has decided on an arrangement that suits them...let's support them in that.

Bart Stewart
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This is actually sort of fascinating.



For one thing, it's interesting to speculate that this is one more loss for "Taxachusetts." States that make it more expensive to do business (and, as Jason noted above, where property costs make it more expensive for employees to live) have no room for complaint when companies move elsewhere.



Additionally, this seems to me to be the logical conclusion of the viewpoint that it's OK or desirable to use tax revenues to favor particular industries (as was debated when the tax breaks for the game industry in Britain were taken out of the budget). This just goes all the way to favoring one particular game developer; the principle is the same, and those who favored it for game developers in the UK should be supporting its application to 38 Studios.



It'll be interesting to see how this all works out.

Nico Corrao
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This is a tough call. On the one hand I hope it will cause the Taxachusetts politicians to wake up and realize the cost of doing business in this state is far too high, especially in today's digital age of telecommuting and highly skilled labor found virtually anywhere in the country. Mass. can't simply rest on it's laurels with Harvard and MIT graduates anymore. Cost of living is extremely high in this area. That said I wonder how the employees will handle the move. Some may enjoy the reverse commute south of the city now but as someone stated above, the company was already quite a ways outside Boston.



One things I'm surprised hasn't been addressed is that this may be a pressure move for 38. The company has been in operation since 2006 and has been in full-swing production since probably late 2008. So it's safe to say they've spent a ton of money. And don't forget they purchased Big Huge Games ealier this year as well. Likely so they would be able to show something to investors while they continue development on Copernicus. What I'm getting at is 38 Studios may very well NEED this $75 million to keep production moving on their flagship title, just as they "saved" BHG in a bet to show some kind of cashflow.



Of course, this is all just speculation and I wish them all the best. Happy they're staying in New England and not closing or moving all the jobs overseas. Good luck guys!

Mark Morrison
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it's better to be employed in R.I. than unemployed in MA.


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