38 Studios spouse shares her story

A letter from a spouse of a former 38 Studios member outlines a first-hand account of the developer's struggles in its last days.


We've heard plenty of legal details in the saga of 38 Studios' closure, most recently as the company formally declared bankruptcy. It's easy to feel distant from finances and legal matters, but a new first-hand perspective hits on the emotions around the studio's money woes.

Gamasutra has published a letter penned by an anonymous "38 Studios Spouse." It walks us through a microcosm of the developer's fall from grace and its various developments, from the perspective of one household.

She noticed first when payments were withheld, as it impacted her ability to pay bills. "I called my husband and asked him to check on it when he got to work," she said. "When he came home that night he told me that he had to stay for a 5 o'clock meeting to find out they didn't make payroll. He was unhappy, but said that he was promised they were working on the problem and sure they would have it worked out by the next day."

We know how the sad story ends, but it's interesting to see it from a new perspective -- from continued lack of pay to the eventual layoff, followed by the debacle of unpaid relocation costs. "Well on one page in a series, of approximately 45, we signed a document stating in tiny print that we would be responsible if the company does not pay," she said of the moving bill. She points out that the document was presented on the day that everything arrived in Rhode Island, which made it difficult to have time to read the legal documents.

"I blame a company named 38 Studios and all of their executives for moving so many families while knowing they weren't paying bills, weren't going to hit their dates, and were running out of money," she said in closing. "Learn this lesson from our struggles so you never have to experience it first hand. Protect yourself and family any way you can, read the small print, and realize no matter how big the company is if they run out of money there is very little you can do to get what is owed to you."

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  • reply
    June 13, 2012 3:45 PM

    Steve Watts posted a new article, 38 Studios spouse shares her story.

    A letter from a spouse of a former 38 Studios member outlines a first-hand account of the developer's struggles in its last days.

    • reply
      June 13, 2012 4:05 PM

      After hearing all the stories, I feel that both 38 Studios and the State of Rhode Island hold substantial amounts of blame for this failure.

      38 Studios, for essentially violating the WARN Act: http://www.dol.gov/compliance/laws/comp-warn.htm

      The Worker Adjustment and Retraining Notification Act (WARN) protects workers, their families, and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs.

      ...and of course Governor Chafee, for essentially going on a bullying campaign to pressure 38 Studios into paying the $1.125 million loan payment that they missed on May 1st. Why was Chafee so desperate for a monetary value that wasn't exactly budget-breaking? Even if Rhode Island has a "mandatory balanced budget" law, the state budget for a year is several billion dollars. Chafee cost his state far more money than he could have saved if he did get the payment on time.

      Additionally, Rhode Island loses 400 jobs, in a state with already high unemployment, already low corporate investment, and pretty bleak tech prospects compared to Massachusetts.

      The Rhode Island State Police, FBI, and offices of the U.S. and RI attorneys general are investigating for criminal wrongdoing, but I wouldn't be surprised to see some scrutiny of Chafee's office, what they knew at that time, and if they were breaching their duty to the citizens of Rhode Island by hounding 38 Studios.

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        June 13, 2012 4:27 PM

        I don't see the WARN Act thing working, because they'd probably argue this part of the statute:

        Reduction of notification period
        (1) An employer may order the shutdown of a single site of employment before the conclusion of the 60-day period if as of the time that notice would have been required the employer was actively seeking capital or business which, if obtained, would have enabled the employer to avoid or postpone the shutdown and the employer reasonably and in good faith believed that giving the notice required would have precluded the employer from obtaining the needed capital or business.

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          June 13, 2012 6:47 PM

          Heh, that sounds like a plethora of plausible excuses that the 38 Studios officers could use anyway. "We're actively seeking capital, and if we announced mass layoffs, we'd lose out on a bunch of funding deals! OH CRAP, WHY IS CHAFEE OPENING HIS MOUTH TO THE MEDIA?!?!"

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      June 13, 2012 7:35 PM

      Fucking horrible. The not paying the movers and leaving it to them is just shit.

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      June 13, 2012 7:43 PM

      Fucking awful. I remember hearing on the bombcast sometime that 38 was close to making a deal with the state but due to politics the governor pulled shit back and they didn't get the additional funding and then he started to poison the well by shitting on them to the press.

      Yes, the management at 38 Studios fucked up huge but being so close to salvation (however temporary) and then getting boned really must burn.

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      June 13, 2012 7:51 PM

      So, who got rich from this? Clearly someone made out like a bandit while the rest were left holding the bag.

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        June 13, 2012 8:14 PM

        No one got rich - 400 people got jobs and everyone else got screwed because those 400 people couldn't generate enough of a return to keep the company afloat.

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          June 13, 2012 8:26 PM

          I bet you some folks in management made off with some good pay though, i bet salaries were pretty high towards the end.

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            June 13, 2012 8:28 PM

            It was ok ($000's I'm sure) but the big allure of a startup like this is the equity stake and these guys got nothing. They made good money compared to the median but lost money versus the next best alternative.

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            June 14, 2012 7:37 AM

            Curt (President of 38 Studios) lost a LOT of money that he had invested into creating the company... nooone made out in this deal... everyone lost.. even the fans..

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              June 14, 2012 7:46 AM

              I had some fun with Reckoning, so not the biggest loss.

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              June 14, 2012 9:00 AM

              au contraire, I believe the very first thing he did when he got the state guarantee was to cash out of his only liabilities with the company

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                June 14, 2012 9:25 AM

                As anyone sane person would. He got the company started on his own dime and paid himself back. Sounds smart to me.,