38 Studios

38 Studios, LLC
Company type	Private
Industry	Video games
Predecessor	Green Monster Games
Founded	2006
Founder	Curt Schilling
Defunct	2012
Fate	Filed for Chapter 7 bankruptcy; assets sold
Headquarters	Providence, Rhode Island, United States
Area served	Worldwide
Key people	Curt Schilling (Founder and former CEO), Bill Thomas (President and COO), Brett Close (CEO), Jennifer MacLean (SVP Business Development)
Products	Kingdoms of Amalur: Reckoning, Project Copernicus (cancelled), Rise of Nations: Tactics (cancelled)
Number of employees	~400 (2012)

38 Studios, LLC was a United States-based video game developer and publisher headquartered in Providence, Rhode Island. Established in 2006 under the name Green Monster Games by former baseball player Curt Schilling in Maynard, Massachusetts, the company’s mission was to create an original fantasy intellectual property. Schilling partnered with author R. A. Salvatore and illustrator Todd McFarlane to craft the Amalur fantasy universe. From its inception, 38 Studios concentrated on developing a massively multiplayer online role-playing game called Project Copernicus, intended as their principal title and a cornerstone for additional Amalur projects. Over time, the company grew its workforce and acquired Big Huge Games as a subsidiary in 2009.

Big Huge Games developed a prototype that eventually became Kingdoms of Amalur: Reckoning (2012), a single-player role-playing game designed to introduce players to the Amalur world. Additionally, 38 Studios worked on a tactical RPG sequel to Rise of Nations. After securing a $75 million loan from Rhode Island’s government, the studio relocated to Providence. However, mounting financial troubles led to 38 Studios filing for bankruptcy in June 2012, with liabilities surpassing $150 million. The state-backed loan sparked multiple legal proceedings, though none culminated in criminal charges. The downfall of the studio attracted widespread media attention, focusing on the cancellation of Project Copernicus and its consequences for the workforce.

Founding and Development of Project Copernicus (2006–2009)

The idea behind 38 Studios originated from Curt Schilling, a professional baseball athlete and enthusiastic gamer who was dissatisfied with existing MMORPGs such as EverQuest II. Driven by this dissatisfaction, Schilling aimed to establish a game development company staffed by prominent industry professionals, utilizing his celebrity influence to recruit top talent. The enterprise was publicly announced on September 8, 2006, initially named Green Monster Games and located in Maynard, Massachusetts. Schilling took on the role of chairman, while Bill Thomas served as president and COO. Early key appointments included CEO Brett Close, CTO Jon Laff, and lead designer Travis McGeathy.

In 2007, the company adopted the name 38 Studios—reflecting Schilling’s jersey number—to better embody its vision. By 2008, it described itself as an "entertainment company" with ambitions extending beyond traditional gaming. That same year, it acquired Azeroth Advisor, a newsletter service focused on World of Warcraft, intending to enhance its presence within that genre.

Schilling’s primary goal was to develop a large-scale MMORPG rivaling World of Warcraft, under the working title Project Copernicus, set within the newly created Amalur universe. To enrich this setting, Schilling engaged fantasy writer R. A. Salvatore for narrative development and comic artist Todd McFarlane for visual direction. Amalur was envisioned as a multimedia franchise comparable in scope to Lord of the Rings. Initially planned for release in 2011, 38 Studios forecasted annual revenues exceeding $100 million from this single project. Despite significant expenditures without product launches by 2009, industry analysts acknowledged the studio’s bold approach as necessary to compete in the challenging MMO market. Schilling entrusted day-to-day production management largely to seasoned industry veterans.

Subsidiaries and Additional Initiatives (2009–2012)

In May 2009, 38 Studios took ownership of Big Huge Games from THQ, the studio recognized for Rise of Nations (2003). Facing imminent closure due to financial struggles, Big Huge Games' prototype was transformed by 38 Studios into the single-player role-playing game Kingdoms of Amalur: Reckoning. This title was co-published alongside Electronic Arts through the EA Partners program, with EA providing the majority of development funding. While McFarlane and Salvatore managed the project, the creative team maintained significant autonomy. CEO Curt Schilling departed in August 2010 and was succeeded by Jennifer MacLean as Senior Vice President of Business Development.

Big Huge Games also developed a Unity-based Rise of Nations: Tactics for iOS, led by Stuart Jeff. Although nearly finished by early 2011, this project was discontinued in early 2012 to concentrate resources on Project Copernicus. Likewise, the Azaroth Advisor service was terminated in 2010 to prioritize the main development effort.

Due to uncertain market conditions, local venture capital firms declined to invest; consequently, funding was largely sourced from Schilling’s personal wealth and private industry contributions. Schilling rejected some potential investors whose objectives did not align with the company’s vision. An anonymous employee reported that most capital was allocated toward development tools and employee salaries. In July 2010, Schilling secured a $75 million loan from Rhode Island’s Economic Development Corporation (EDC) aimed at relocating the studio and financing projects, with the goal of fostering a new video game industry within the state. The loan, issued as bonds, attracted criticism over Rhode Island’s financial exposure and opposition from figures such as Lincoln Chafee.

The deal was finalized in November 2010; by April 2011, 38 Studios had relocated ahead of schedule to One Empire Plaza in Providence, successfully meeting employment targets. The company also created Helios, a platform integrating multiplayer functionality and social media features. Operating costs amounted to $118 million between 2006 and 2011. By 2012, 38 Studios encompassed subsidiaries including Big Huge Games, Mercury Project, and Precision Jobs, employing roughly 400 personnel.

Bankruptcy Proceedings (2012)

Reckoning launched in February 2012 to favorable critical reception, surpassing Electronic Arts’ sales expectations. Nonetheless, with sales reaching 1.3 million copies, it fell short of the two million units required to break even. In February 2012, the company implemented a temporary hiring freeze that impacted new recruits such as localization director Andy Johnson. Jennifer MacLean took an indefinite leave in March and formally resigned in May. That same month, veterans from the MMO sector John Blakely and Mark Hansen joined as senior vice presidents of development and operations & business respectively.

By early May 2012, the studio defaulted on a loan payment to Rhode Island, with negative press amplified by Governor Chafee’s critical remarks regarding the loan agreement. Despite this adversity, Project Copernicus director Steve Danuser described a hopeful atmosphere within the studio, although some employees reported a "discordant workplace." Johnson compared executives to "Titanic survivors scrambling for driftwood." Efforts by Schilling to sell Project Copernicus to John Smedley of Sony Online Entertainment were unsuccessful due to unfavorable market conditions for MMOs. Schilling later acknowledged that his lack of business acumen contributed to significant organizational dysfunction. The release date for Project Copernicus was postponed until 2013.

On May 18, a repayment check exceeding $1 million was cleared after payroll suspensions and layoffs of non-essential staff funded it. Johnson recalled executives pushing for a hurried launch of Rise of Nations: Tactics, despite his appeals for extended development time. A sequel to Reckoning, intended to address prior criticisms, entered pre-production; however, a prospective $30 million funding agreement collapsed when a publisher withdrew support. Another potential investor retracted funding after Rhode Island declined requests to renegotiate loans or provide $6 million in tax incentives. Media coverage highlighted talent loss as an additional concern.

On May 24, all employees were abruptly dismissed, halting progress on Project Copernicus. The brief layoff notification caught staff off guard as they had limited insight into executive decisions. Economic Development Corporation official Saul Kaplan described the company as "bleeding cash." On June 7, 38 Studios filed for Chapter 7 bankruptcy protection, owing $150.7 million to 1,079 creditors—the largest claim being $115.9 million secured by the EDC. At that time, Project Copernicus was approximately three-quarters completed.

Rhode Island Governor Lincoln Chafee received counsel from Providence Equity Partners concerning the studio; this firm had previously invested in ZeniMax Media but opted not to invest in 38 Studios.

Impact

The sudden downfall of 38 Studios and the immediate termination of its workforce caused considerable hardship for employees, many of whom had incurred relocation expenses to Rhode Island. With the company filing for bankruptcy, workers were left without receiving their final wages or health insurance coverage. In response, various game developers and publishers extended employment offers, and a job fair was held in Providence to assist those displaced. Additionally, Rhode Island facilitated support for unemployment benefit claims. Starting in August 2021, former staff began obtaining partial compensation for unpaid salaries, receiving between 14 and 20 percent of what was owed. In 2012, several ex-Big Huge Games employees established "Epic Baltimore" under the umbrella of Epic Games, later reclaiming the Big Huge Games brand and shifting focus toward mobile gaming by 2013.

After the bankruptcy proceedings, Rhode Island assumed ownership of 38 Studios' assets and arranged an auction initially set for November 2013 but postponed until December due to interest from industry parties. The Big Huge Games trademark was acquired by Reynolds, who aimed to revive the company, whereas Rise of Nations and associated properties were sold to an undisclosed purchaser. The Amalur intellectual property portfolio remained unsold; the auction generated $320,000, falling short of the state's anticipated amount. Jeff Easley stayed on as the only employee overseeing technical operations related to Project Copernicus, with monthly upkeep expenses around $15,000. In September 2018, THQ Nordic secured the rights to Amalur.

Concurrently, several law enforcement bodies—including Providence Police, Rhode Island State Police, the state attorney general’s office, U.S. Attorney’s Office, and FBI—initiated investigations into the loan approval process. Governor Chafee ordered a forensic audit into the studio’s financial activities. Rhode Island passed legislation restricting further prosecutions connected to the loan if settlements were reached; a settlement attempt in 2014 encountered resistance. The inquiry concluded in 2016 without criminal charges due to lack of sufficient evidence.

In November 2012, Rhode Island filed a civil lawsuit against Curt Schilling and thirteen others based on audit results. This case was resolved in 2017 with a $61 million settlement overall. After deducting legal costs and settlements, Rhode Island was burdened with over $38 million in public debt. In March 2016, the Securities and Exchange Commission accused the Rhode Island Economic Development Corporation (EDC) and Wells Fargo of bank fraud, alleging they were aware that the loan would not fully finance Project Copernicus. This matter was settled privately in 2019; Wells Fargo agreed to pay more than $800,000 following federal court approval.

Reception

Many former employees attributed the studio’s failure to excessive expenditures, unrealistic optimism about its main project, and insufficient additional funding. Although later accused by the EDC of driving the studio into insolvency, Governor Chafee asserted that he sought to sustain the company without injecting further capital. Schilling and others contended that Chafee’s critical remarks precipitated the ultimate collapse. Some ex-staff also criticized Schilling for manipulating circumstances to garner public sympathy. Having lost $60 million due to the bankruptcy, Schilling eventually acknowledged mistakes and apologized for inadequate treatment of employees. Neither Salvatore nor McFarlane harbored resentment regarding the unsuccessful endeavor.

Alexa Ray Corriae of Polygon characterized her 2012 report about a former employee’s spouse as presenting "very real, very heartbreaking human faces" behind the collapse. In another 2012 piece for Gamasutra, Leigh Alexander observed a strong sense of community among staff who believed executive decisions and political influences—rather than Schilling himself—were responsible for the failure. Personal accounts from employees also appeared in Boston Magazine (2012), The New York Times (2013), and Bloomberg News (2021). Brendan Sinclair of GamesIndustry.biz (2022) referenced 38 Studios and Project Copernicus as cautionary tales illustrating overambition and poor management within gaming companies. Industry experts associated the collapse with a broader trend moving away from MMOs in the market.

Games

Year	Title	Platform(s)	Remarks
2012	Kingdoms of Amalur: Reckoning	PlayStation 3, Xbox 360, Windows	Created by Big Huge Games and jointly published with Electronic Arts.

Canceled

Rise of Nations: Tactics
Project Copernicus
Untitled sequel to Kingdoms of Amalur: Reckoning

External links