38 Studios Spent $133 Million Developing Reckoning and Copernicus
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38 Studios' operating expenses totaled $118 million between its founding in August 2006 and the end of 2011, the documents show. The company earned no revenue during that period; the bills were paid out of Schilling's personal fortune and, starting in November 2010, proceeds from a $75 million taxpayer-backed loan awarded by the R.I. Economic Development Corporation.
During the first three months of this year the company spent another $15.4 million, including $5.4 million in March alone, but also booked its first $27.7 million in revenue, the documents show. Bankruptcy records show a 38 Studios subsidiary received a $28.7 million advance from Electronic Arts in January after it finished its first game, "Kingdoms of Amalur: Reckoning," which EA published in February.
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The documents obtained by WPRI.com also raise new questions about whether 38 Studios executives were overoptimistic about the company's prospects. Their business plan projected the company would take in $109 million in revenue over the course of this year, including $6.5 million a month from April to June; $476,333 a month from July to September; and $19.9 million a month from October on.
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Pachter said 38 Studios' efforts to attract additional financing were likely hurt by the disappointing performance of "Star Wars: The Old Republic," a new MMO backed by EA that was released in December. "Star Wars" cost an estimated $200 million to develop but hasn't been as big a hit with subscribers as expected.
"I honestly think if 38 Studios had moved to get financing months earlier they would have been fine," Pachter said. "Had they been out in the market in December I think they would have been fine, and I think they probably believed they were fine." He also suggested Rhode Island "should have thrown good money after bad" and kept the company afloat for another month while searching for a buyer.
