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Schilling Invested 'Majority' Of Earnings Into 38 Studios
by Kris Graft [PC, Console/PC]
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March 30, 2010
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Although Major League Baseball all-star pitcher Curt Schilling retired from the Red Sox last year, he is apparently unable to leave his competitive mentality on the mound. The former pro athlete has invested millions of dollars and sacrificed time with his family to establish the Maynard, Massachusetts-based MMORPG company, 38 Studios.
"I have put the majority of the money I've earned in my life on the table," he said in the Harvard Business School case study, Curt Schilling's Next Pitch. "If I make another financial investment, I will have crossed the point of no return from a personal investment and company standpoint."
Baseball Reference, which is cited in the case study, estimates that Schilling earned over $114.16 million during his career in baseball.
Schilling is a known MMORPG fanatic and an avid player of games including Blizzard's World of Warcraft and Sony Online Entertainment's EverQuest. Originally announced in 2006 as Green Monster Games, named after towering left field wall at Boston's Fenway Park, 38 Studios stems from Schilling's passion for gaming, which is second only to baseball.
Fast Lessons In Business
But starting a company and creating a game is a lot different than playing WoW, or baseball for that matter, he quickly found out. "It was a very boring work environment in which you are asking people to be inspired," he said after visits to SOE. His research into the development of MMORPGs initially involved going to development studios, observing the process and taking notes.
After injecting an initial $5 million into the company (without informing his wife, Shonda), Schilling announced Green Monster Games and revealed the hiring of sci-fi/fantasy writer R.A. Salvatore and Spawn creator Todd McFarlane. Other key hires included industry vet Brett Close as CEO (who left the company last year) and former Comcast gaming exec Jen MacLean.
38 Studios' total compensation was $6.9 million for its fiscal year 2008, distributed amongst about 65 employees, according to the study. Capital that year stood at $2.4 million.
The time constraints of starting a new company have been taxing on the family life of Schilling, who has a wife and four children. After a final recruiting dinner with Close, he noticed his wife was upset. "I asked her what was wrong and she said, 'You never pursued me this hard,'" Schilling said. "And my first thought was, there was not this much money on the line."
Finding investors, getting the right team and researching the business of video games and corporate culture in general (the latter of which Schilling had no clue whatsoever) all began while Schilling was still a pro baseball player. He'd come to the game studio first thing in the morning, then head to Fenway in the afternoon, get home at 2 a.m. and start over.
Close explained how Schilling didn't even know the basics of working at a company. "He really needed Company 101," said Close. "For example, the whole concept of vacation was foreign to Curt. He actually said, 'People get weekends off, right?'"
"I feel as though I have gotten a Harvard Business School education during these last two years. It hasn't been easy," said Schilling.
"Quitting Is Not An Option"
In May 2009, 38 Studios acquired former THQ studio Big Huge Games, creators of Rise of Nations. The studio was in trouble, so it cost little to acquire, but Schilling and his team recognized good synergies in Big Huge's expertise and the fact the studio was working on a new role-playing game. In March, Electronic Arts' third-party distribution arm, EA Partners, said it would publish that RPG, codenamed Project Mercury.
Even though Schilling is in retirement from baseball, he's as busy as ever, and heavily involved with the daily operations at 38 Studios. But he admitted that he might have taken on too much at this period in his life, not to mention he launched the company in the midst of a recession.
"There was no way I should have started the company when I did," he said he thought to himself one day. "It wasn't fair to the Red Sox, it wasn't fair to these people, and beyond all of that it wasn't fair to my wife."
He acknowledged the difficulties, but his confidence in his company's success matches the confidence he had in his Little League days, when he knew one day he'd play in the pros.
"I have no doubt I am on the cusp of creating a multi-million dollar company and the only failure scenario is a quit. Quitting is not an option," he said.
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If his kids are old enough, then he already has his QA department.
What happened to candor and brutal honesty? This project had a 500lb gorilla in the room from inception. It's called WoW. Nothing has really changed. A first year business analyst would have been Kurt’s smartest, strongest, and most honest asset. $6.9M comp. compared to $2.5 cap. For 2008????
I genuinely hope Kurt can find some people to surround himself with ASAP, who bring something completely different than his recent past. Anyone who knows the history and players here would be smart to learn this (repeated) lesson and not repeat it. Sometimes quitting doesn't mean a hard stop. It can often mean pausing, quantifying/qualifying, and adjusting the plan.
Mark, I could be wrong but it sounds like bringing on R.A. Salvatore with his emphasis on consistency in world-building is 38’s response to WoW (or at least part of that response).
As Derek Smart has recently pointed out, and to echo you yourself, there’s already a game for people who like WoW -- it’s called WoW. There’s no value in coming up with just another elves-in-tights game. But based on Salvatore’s comments at GDC (http://www.gamasutra.com/view/news/27645/GDC_RA_Salvatore_On_Building_Worlds_Cop
ernicus.php), I think it’s at least plausible that the folks at 38 recognize that fact and are looking for competitive advantage through more worldiness, rather than by blindly copying Blizzard’s intense focus on highly directed gameplay.
Let’s at least wait until they start announcing some features before we decide they’re doomed.
I'll be the first to admit that there has been no better game so far, but there has to be eventually... doesn't there? And we need people passionate about gaming (as oppossed to being passionate about the company's stock price) who are willing to at least try and advance the genre.
My point is a business point mainly, reacting to this article. I think there are some real flaws here that could have been flushed out in advance by some professional analysis and due diligence. There may still be time? I don't think many would argue that $6.9M yearly comp. on $2.5M capital is a recipe for disaster.
Who/what were the business forces around Curt doing to help the success of this title/studio/model? From the outside it looks like more of the same that has hindered progression in the core game space in my opinion. I’ll let readers interpret this how they want, but the current just doesn’t add up to me.