By now, of course, unless you’ve been living under a rock, you’ll have heard the grim news: 38 Studios is effectively finished, and all staff at both 38 Studios and Big Huge Games have been let go in an en masse firing that really should have been handled better than this:

The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.

Judging by various tweets, the lights went off for good in the Big Huge Games offices on or about Sunday, the 27th; a lot of the (now former) staff of that company in particular poured out their hearts online, and recalled many fond memories of working as part of the “BHG family”. In total, 106 people lost their jobs in Maryland, and 307 people lost their jobs in Rhode Island.

In a touching show of support and solidarity, much of the gaming industry rallied to help those affected find new work; Turbine held a job fair in Providence, Rhode Island, and numerous other companies and individuals began appending the #38jobs hashtag to tweets to highlight open positions elsewhere in the gaming industry that would be quite happy to accept applications from “Big Huge talent”. I understand that BioWare is also planning some sort of event in Rhode Island in the near future.

And that was something to see, and might just be a phenomenon that’s unique to the game development industry. Because while Curt Schilling (or whoever) was tapping out the curt email above, HP was letting go some 27,000 employees…and I (for one) didn’t take note of Dell, Apple, and Lenovo firing off supportive tweets under the #HPjobs hashtag.

How did this happen?

That’s a question that has been asked a lot in recent days, and I’m not sure I can piece together an answer based on all that I’ve seen published about the downfall of these two promising studios.

38 Studios was offered a loan of up to $75 million by the state of Rhode Island in 2010, in a bid by the state to attract the studio to the state and see an increase in high-tech employment within its borders. 38 Studios relocated from Baltimore, Maryland, to Providence, Rhode Island, leaving Big Huge Games behind to finish work on Kingdoms of Amalur: Reckoning and to serve as their second studio. In many respects, the relocation of 38 Studios should have worked well for the company: Big Huge Games became the dedicated single-player arm of the company (working on Reckoning DLC and patches, and Reckoning 2), while 38 Studios became the dedicated MMORPG arm of the company (working on Project Copernicus).

Actually, more correctly, what Rhode Island offered to 38 Studios was a state loan guarantee, meaning that should 38 Studios be unable to pay off its loan for any reason, the state would cover it for them (to the tune, it would seem, of over $112 million). And 38 Studios would still get up to $75 million in moral obligation bonds, provided they met certain hiring quotas.

What happened next is…confusing, to say the least. We know that 38 Studios missed its first $1.125 million loan payment to the state, which event ultimately kicked off the cascade of events that led to the studio’s closure. So obviously, the studio didn’t have that sort of money laying about. To hear Rhode Island governor Lincoln Chafee explain it, this was due to Reckoning’s failure to sell north of 3 million copies. Both Ian Frazier (Reckoning’s lead designer, known as “Tiberius” or “Tibby” to all of us here) and Curt Schilling have stated that this isn’t the case, and that Reckoning sold quite well…above and beyond Electronic Arts’ expectations for it.

(And really…1.2 million copies sold is a very respectable figure. CD Projekt Red’s critically-acclaimed The Witcher 2 has been out for a good deal longer than Reckoning, and has moved around 1.7 million copies in total, including its recent Enhanced Edition release.)

Still…if Reckoning sold 1.2 million copies at between $50 and $300 dollars per copy (because some of the Collector’s Editions they put out were pretty pricy!), that’s at least $60 million in revenue (I’ve seen some estimates suggesting the game sold north of $70 million) that the game likely brought in. Sure, a portion of that would have gone to EA, and more still to payroll and the development of Reckoning DLC and Project Copernicus. But did the entirety of that figure really just vanish into thin air, leaving 38 Studios with not even a fraction of the amount to hand?

If so: how?

Regardless, 38 Studios missed its loan payment, which promoted Governor Chafee to start making what public statements he did. Curt Schilling, for his part, has gone on the record to state that the governor’s remarks killed a $35 million deal to finance Reckoning 2 that had very nearly been struck. If that’s true, then that would certainly suggest that Chafee did his part to seal the fate of the studio and the Amalur franchise…although this still doesn’t explain where all Reckoning’s revenues went. Governor Chafee, for his part, doesn’t think Schilling’s comments are fair. Writer R.A. Salvatore has also sounded off on the closure and the studio’s issues.

Schilling has also stated that he stands to lose as much as $50 million of his own money in the collapse of 38 Studios. There have also been reports that issues with the employee relocation programme that 38 Studios put in place when it moved to Rhode Island have left now-former employees of the studio facing mortgage inquiries…from Maryland banks.

Oh…and the company-wide layoffs have likely put 38 Studios back into a state of loan default, because it would appear state notification laws were not followed.

What now?

For now at least, it looks like it’s curtains for Amalur, Project Copernicus amd the Reckoning franchise. Pre-production work was being done on Reckoning 2 at Big Huge Games, and it seems likely that all we’ll ever see of Project Copernicus are these leaked screenshots:

Which is all a real shame, because the Kingdoms of Amalur franchise was a promising one, one that really deserved a chance to continue on into a series.

It wasn’t any one thing that made Reckoning noteworthy, but rather a combination of factors. It wasn’t the only game to feature a large, open (or semi-open) world; Bethesda games feature those as well. And it wasn’t the only game to feature high-octane, kinetic, tactics-oriented combat; a few game series (notably, God of War) have offered similar experiences. It wasn’t the most graphically advanced game, though it did offer a very rich colour palette in an era where muted colour schemes seem to be the norm. And its world’s inhabitants were a bit on the plain, static side, but the obvious Celtic influences to the lore were a welcome change from the Nordic themes of e.g. Skyrim.

And when you put all these things together, the game just clicked. The story is actually pretty engaging if you can set yourself up to pursue it without getting too distracted by the literally hundreds of side quests on offer, and the combat is as much a progression mechanic as it is a visual treat; there are times when it’s fun to just fling yourself into one group of enemies after another, chakrams slicing through the air as bodies and debris fly away from the vortex of destruction your character is unleashing. And the “Reckoning Mode” attacks were just fun to execute, especially against area bosses.

And while the world is not truly an open world, the zones it features are very large, and always very lush and colourful. Day cycles into night, and many parts of Amalur are as brilliant to behold in the dark as in the light. It’s a lovingly-built world, and quite a lot of fun to explore.

Alas, no more.

The one positive in all of this is that 38 Studios had indeed attracted a lot of talented people, who should be able to find work elsewhere in the industry. Which means that even if we never see anything more of Amalur — and it’s almost certain that we won’t, hopeful statements by Lincoln Chafee and Curt Schilling notwithstanding — we might hopefully still catch the occasional fleeting glimpse of it in other games. Wherever its many designers and creators end up, here’s hoping they can bring something of this magical world they brought to life so briefly to the next projects they work on.