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Friday, June 15, 2012

Citizens Bank sues Schilling for $2.4M; docs detail 38 Studios’ borrowing | WPRI.com

Citizens Bank is suing former Red Sox ace Curt Schilling personally for nearly $2.4 million, alleging he promised to repay money his now-bankrupt video game company 38 Studios borrowed from the bank.

Jim Furtado Posted: June 15, 2012 at 09:48 AM | 76 comment(s) Login to Bookmark
  Tags: curt schilling, special topics

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   1. cercopithecus aethiops Posted: June 15, 2012 at 10:05 AM (#4157527)
OK, corporations are people too, but I never knew that a building could sue somebody.
   2. Steve Parris, Je t'aime Posted: June 15, 2012 at 10:24 AM (#4157560)
Schilling has moved to join the estate of Veterans Stadium as a required third party.
   3. Weekly Journalist_ Posted: June 15, 2012 at 10:48 AM (#4157601)
I'm starting to feel kinda bad for Schilling.
   4. Matt Clement of Alexandria Posted: June 15, 2012 at 11:01 AM (#4157619)
I'm honestly not. I really want to like the guy, but he played a con on Rhode Island, and he's highly unlikely to pay a commensurate price.

As explained by Yglesias at Slate, Schilling was looking for $75M from the government because venture capitalists all said no. The state of Massachusetts then said no. Rhode Island wanted to bring 38 Studios to the state, but they had only $50M in their budget for loans to growing companies. So they allocated a brand-new $75M to that budget and gave it all to 38 Studios.

The primary bad actor here, of course, is the state of Rhode Island, who set $75M in taxpayer money on fire because they got played by Schilling and his company, but I think a secondary, still significant amount of blame also goes to Schilling.

(I'm also not expecting the forensic accounting to find that 38 Studios was a haven for ethical money management, but we can wait until that comes out.)
   5. Gamingboy Posted: June 15, 2012 at 11:02 AM (#4157621)
Quick question: If corporations are people, would an openly evil corporation like those you find in the movies be charged with murder? Because that totally sounds like the plot of a good movie.
   6. DA Baracus Posted: June 15, 2012 at 11:13 AM (#4157642)
At what point does Tommy Caffee have Michael Caffee take care of this?
   7. Jose Can Still Seabiscuit Posted: June 15, 2012 at 11:21 AM (#4157652)
The primary bad actor here, of course, is the state of Rhode Island, who set $75M in taxpayer money on fire because they got played by Schilling and his company, but I think a secondary, still significant amount of blame also goes to Schilling.


Unless Schilling was flat out lying (and I think he was more "optimistic" as business owners typically are) I put this on the state of Rhode Island. As you say, several other people passed on this deal but then RI jumps in and says "no no, we'll give you the money, here take some more!"

Just because Tom Sawyer offers to let you paint the fence doesn't mean you grab a brush.
   8. Crispix reaches boiling point with lackluster play Posted: June 15, 2012 at 11:23 AM (#4157657)
Where is the money now? I doubt Schilling transferred it all to his Swiss bank account. I think it was paid out in overly-generous wages to an overly-large team of game programmers and marketing specialists. As such I would not say he "played a con". I would say that in this case the goal of the state of Rhode Island was to make it easier for businesses to grow and become stable and employ people in the long term. And they made political decisions to end up only creating jobs for two or three years instead of creating businesses with sustainable futures.

It doesn't seem that different from the million and one situations of a town telling some company that they don't have to pay taxes for the first five years if they set up their call center here and employ 150 of our worthless peons, and then the company leaves and takes its jobs elsewhere after 4.99 years.
   9. Kyle S at work Posted: June 15, 2012 at 11:35 AM (#4157679)
There's a reason startups are financed with equity, not debt (leaving aside convertible debt). It was obviously a very foolish decision for Rhode Island to make. I don't begrudge Schilling taking it, although I would appreciate if he could tone down the anti-govt rhetoric - hypocrisy is always tough to swallow.
   10. Crispix reaches boiling point with lackluster play Posted: June 15, 2012 at 11:39 AM (#4157688)
Further to #8, in fact in this case, everyone involved seems to have had good intentions.
   11. Matt Clement of Alexandria Posted: June 15, 2012 at 11:39 AM (#4157690)
Just because Tom Sawyer offers to let you paint the fence doesn't mean you grab a brush.
Right, but if Tom Sawyer is going around telling people that he just can't wait to blow $75M of taxpayer money on a video game startup, Tom Sawyer bears some secondary responsibility for blowing that money when someone gives it to him.

I don't begrudge Schilling taking it,
I do. I think that ethics don't stop at the point where business begins. When you run a company with dozens of employees, when you take out a huge loan from the state, you have an ethical obligation to run a good business, have a good plan, and be worthy of the loan.

EDIT: To clarify, everything I've read about 38 Studios suggests it was a vanity project with a business plan worthy of the underwear gnomes. That's the part where I blame Schilling. Good businesses fail, people can make no or few mistakes and still end up bankrupt. I'm not blaming Schilling just because of the results, but because my understanding is that Schilling's process was practically guaranteed to lead to this result. And when you run a large business and take out a loan from the state, it's not just yourself you're hurting with your bad business plan.
   12. Shooty Survived the Shutdown of '14! Posted: June 15, 2012 at 11:40 AM (#4157691)
There's a reason startups are financed with equity, not debt (leaving aside convertible debt). It was obviously a very foolish decision for Rhode Island to make. I don't begrudge Schilling taking it, although I would appreciate if he could tone down the anti-govt rhetoric - hypocrisy is always tough to swallow.

Pretty much. It was just a lot of bad decisions all around. Can't blame a guy for chasing his dream, though, as quixotic as that dream may have been.
   13. Kyle S at work Posted: June 15, 2012 at 12:04 PM (#4157730)
When you run a company with dozens of employees, when you take out a huge loan from the state, you have an ethical obligation to run a good business, have a good plan, and be worthy of the loan.

I agree with this. Schilling obviously isn't a very good businessman. He sounds like the prototypical crazy entrepreneur I run into a lot in my career. These people are often stunningly successful (at least for a period of time) because they don't believe in "impossible." If you look into the founding of a lot of great companies, many of them were started by people like this.

Two points on this. First: when times get tough, crazy entrepreneurs are not the person you want running a company, because they are typically not great at planning for the worst case scenario - they are optimists by nature, and their life experience confirms to them why things will turn out alright (they always have in the past). This can make them very difficult to deal with in crisis situations.

Second, it's the job of the financier to evaluate a company's business plan and its management team when making an investment. Schilling thought he had a good business, a good plan, and was worthy of the loan; all crazy entrepreneurs do. I don't fault him for that. I fault RI for not running a more thorough underwriting process and for concentrating all its credit risk into one loan. If I was a citizen, I'd be furious at the state for making the loan. But I understand why Schilling took the money, even if it's something I would not have done.
   14. formerly dp Posted: June 15, 2012 at 12:06 PM (#4157732)
At what point does Tommy Caffee have Michael Caffee take care of this?

Every time I read about this story, I keep wondering why those two haven't stepped in yet.
   15. SuperGrover Posted: June 15, 2012 at 12:06 PM (#4157734)
Further to #8, in fact in this case, everyone involved seems to have had good intentions.


Sure but you can be liable even though your intentions were not pernicious. Here you have an inept government with an inept business man and, on the surface, inept bankers. The public ends up footing the bill, because everyone is too ignorant to understand how to effectively analyze a business. Kudos to all and their good intentions.
   16. RoyalsRetro (AG#1F) Posted: June 15, 2012 at 12:07 PM (#4157735)
I do. I think that ethics don't stop at the point where business begins. When you run a company with dozens of employees, when you take out a huge loan from the state, you have an ethical obligation to run a good business, have a good plan, and be worthy of the loan.


I'm sure Curt didn't start out thinking he had a bad business, a bad plan, and was unworthy of the loan. Schilling deserves blame for being incompetent, but not unethical IMO. Its like blaming a crappy ballplayer for not trying hard enough. Its not that the guy isn't trying hard enough, its that he sucks. Its not his fault the manager plays him all the time. Its his fault he sucks.
   17. SuperGrover Posted: June 15, 2012 at 12:11 PM (#4157741)
I do. I think that ethics don't stop at the point where business begins. When you run a company with dozens of employees, when you take out a huge loan from the state, you have an ethical obligation to run a good business, have a good plan, and be worthy of the loan.

EDIT: To clarify, everything I've read about 38 Studios suggests it was a vanity project with a business plan worthy of the underwear gnomes. That's the part where I blame Schilling. Good businesses fail, people can make no or few mistakes and still end up bankrupt. I'm not blaming Schilling just because of the results, but because my understanding is that Schilling's process was practically guaranteed to lead to this result. And when you run a large business and take out a loan from the state, it's not just yourself you're hurting with your bad business plan.


I think you are presuming that Schilling is intelligent enough to understand that his business model was a joke. I don't share in your presumption.

I do agree everyone probably intended for this to do well, they were just too incompetent to understand that it never had a chance.

You see this everyday in every town in America. Someone has an idea for business but doesn't analyze the challenges ahead and the environment necessary for that business to succeed. Next thing you know, you end up with vanity cupcake shop in the ghetto with the owner shocked the business failed because, dammit, his/her cupcakes are so damn tasty!
   18. Matt Clement of Alexandria Posted: June 15, 2012 at 12:13 PM (#4157744)
Its like blaming a crappy ballplayer for not trying hard enough. Its not that the guy isn't trying hard enough, its that he sucks. Its not his fault the manager plays him all the time. Its his fault he sucks.
Businessmen bear responsibilities that ballplayers don't. A businessman bears a responsibility to his employees to run his business well, and he bears responsibilities to his creditors - particularly if those creditors are the public - to take loans he can repay.

I'm working with a sort of negative liberty model here - Schilling's ethical responsibilities begin when he starts hurting others with his lack of business competence. "I'm an idiot" isn't a valid excuse for hurting people.
   19. McCoy Posted: June 15, 2012 at 12:13 PM (#4157746)
I still remember the day an air bar opened up on Main St Philly. I think it lasted about a month before it closed.
   20. Shooty Survived the Shutdown of '14! Posted: June 15, 2012 at 12:15 PM (#4157747)
Speaking of business...how dumb is it to invest in a bar?
   21. McCoy Posted: June 15, 2012 at 12:15 PM (#4157749)
The state should never have given him money. Period. End of story. Almost everyone else involved said no to Schilling and his crackpot idea. In terms of just the asking I can't see how Schilling is at fault. Now if he blew the money on lush carpets and foie gras then he is at fault on how he spent the money.
   22. Matt Clement of Alexandria Posted: June 15, 2012 at 12:16 PM (#4157752)
I think you are presuming that Schilling is intelligent enough to understand that his business model was a joke. I don't share in your presumption.
I'm really not. Being deluded isn't nearly the get-out-of-moral-responsibility-free card everyone seems to be claiming it is. You have a responsibility not to be deluded. If you're deluded, that's your failing. If that failing leads to a huge loss of jobs and publicly-backed capital, you bear responsibility.

Again, primary responsibility here for the misallocation of public funds lies with the state, but I don't see how Schilling gets off scot free, morally.
   23. McCoy Posted: June 15, 2012 at 12:16 PM (#4157753)
Speaking of business...how dumb is it to invest in a bar?

Depends.

If you invest in a bar you have to be there everyday.
   24. Ray (RDP) Posted: June 15, 2012 at 12:16 PM (#4157754)
An air bar?
   25. Shooty Survived the Shutdown of '14! Posted: June 15, 2012 at 12:19 PM (#4157756)
If you invest in a bar you have to be there everyday.

My brother is opening a bar in Pittsburgh and wants me to invest. I'm only knowledgeable on the consumer end of that business.

An air bar?

What a fantastically nutty fad that was.
   26. Never Give an Inge (Dave) Posted: June 15, 2012 at 12:20 PM (#4157757)

Businessmen bear responsibilities that ballplayers don't. A businessman bears a responsibility to his employees to run his business well, and he bears responsibilities to his creditors - particularly if those creditors are the public - to take loans he can repay.

Schilling was the investor, not the CEO. He hired a management team to actually run the company. He basically paid $38 million of his own money (and is on the hook for a lot more) to his employees to produce a video game that was never completed. I don't think that, ethically, he owes them anything more. Every employee should know there is substantial risk in going to work for a startup.
   27. McCoy Posted: June 15, 2012 at 12:23 PM (#4157761)
My brother is opening a bar in Pittsburgh and wants me to invest. I'm only knowledgeable on the consumer end of that business

The first rule of family investing is don't.


Some absentee investing can be good. For instance if you get involved with a turn key type seller who has a good history it might be a good investment.
   28. Bob Tufts Posted: June 15, 2012 at 12:24 PM (#4157763)
Schilling is giving entrepreneurship a bad name. Unless proposed by someone like Gates, all start-ups have to assemble a detailed business plan which lists sources and uses of funds, management investment, board, advisors, three to five years of pro forma financials and a prototypes of the new item in order to have any hope of funding at the initial stages or the angel or mezzanine level.

I'd love to see the paperwork that he submitted to the state describing his business model and plan.

   29. Avoid running at all times.-S. Paige Posted: June 15, 2012 at 12:24 PM (#4157764)
Quick question: If corporations are people, would an openly evil corporation like those you find in the movies be charged with murder? Because that totally sounds like the plot of a good movie.


I suggest ENRON be played by Sir Anthony Hopkins.
   30. RoyalsRetro (AG#1F) Posted: June 15, 2012 at 12:25 PM (#4157766)
Isn't it also a big assumption this was necessarily a bad business model/horrible incompetence? Businesses fail for a myriad of different reasons - bad business models and poor management are only a fraction of them. Could be the industry fundamentally changed in a way no one could anticipate, the recession hurt more than was anticipated, the technology just wasn't there, etc.

Has there been a detailing on why this failed? I'm guessing that will come after the audits.

Look, I'm no Curt Schilling apologist and I do find certain amount of schadenfreude in seeing free-market enthusiasts get their comeuppance when publicly subsidized, but I think people are jumping the gun in accusing Schilling of being unethical and/or terribly incompetent when its not clear he had much of anything to do with management.
   31. McCoy Posted: June 15, 2012 at 12:27 PM (#4157768)
I'd love to see the paperwork that he submitted to the state describing his business model and plan.

Did a little digging and fortunately since Schilling got the money from the state his business plan is publicly available.
   32. Shooty Survived the Shutdown of '14! Posted: June 15, 2012 at 12:30 PM (#4157771)
The first rule of family investing is don't.

I'm not enthusiastic about the project. If I did it, it would be for familial bliss and I think I'd have to mentally write the money off. Family is a pain in the ass. I can't really win here.
   33. RJ in TO Posted: June 15, 2012 at 12:36 PM (#4157778)
An air bar?

Yes. They're really stupid.
   34. Ray (RDP) Posted: June 15, 2012 at 12:39 PM (#4157785)
The primary bad actor here, of course, is the state of Rhode Island, who set $75M in taxpayer money on fire because they got played by Schilling and his company, but I think a secondary, still significant amount of blame also goes to Schilling.


Governments piss away taxpayer money all the time. Aside from it being "Schilling is a Republican" related, I can't see why people who aren't bothered by the gazillions of other dollars governments piss away would be bothered by this.
   35. Lassus Posted: June 15, 2012 at 12:41 PM (#4157787)
My brother is opening a bar in Pittsburgh and wants me to invest. I'm only knowledgeable on the consumer end of that business.

You have to simply take a pretty hard look at how much your trust your brother as a bar owner, as well as your relationship with him, honesty-wise. I loaned my brother a four-figure amount to help finance and fix a house top to bottom. I was fine with that and it worked out fine, as he knows those things well and I trusted him to do well. But he also wants to open various businessness, and I probably wouldn't give him 100 bucks for that.


The first rule of family investing is don't.

I'd say it depends on the family, but YMMV, certainly.


EDIT: Just saw #32. Yeah, that's a bummer.

   36. The Id of SugarBear Blanks Posted: June 15, 2012 at 12:41 PM (#4157788)
Schilling's the equivalent of the producer of Heaven's Gate or John Carter. If he acted in good faith and didn't lie, I can't see that he deserves any criticism for his ethics.

The fact that the economic climate is such that governments seemingly have to pay for jobs is a bigger problem than anything Schilling did. His story is more about the inherent problems with crony capitalism than anything else.

   37. Shooty Survived the Shutdown of '14! Posted: June 15, 2012 at 12:42 PM (#4157790)
Governments piss away taxpayer money all the time. Aside from it being "Schilling is a Republican" related, I can't see why people who aren't bothered by the gazillions of other dollars governments piss away would be bothered by this.

They also print a bunch of money up, too, to distribute. It's kind of a crazy system, if you think about it.
   38. Shooty Survived the Shutdown of '14! Posted: June 15, 2012 at 12:45 PM (#4157793)
You have to simply take a pretty hard look at home much your trust your brother as a bar owner, as well as your relationship with him, honesty-wise.

He's never done this before so I'm just assuming it will fail. It just seems like a tough, tough business. Plus, he wants to sell scotch in Pittsburgh. They're going to wonder why their Rolling Rocks are flat!
   39. Lassus Posted: June 15, 2012 at 12:45 PM (#4157794)
Governments piss away taxpayer money all the time. Aside from it being "Schilling is a Republican" related, I can't see why people who aren't bothered by the gazillions of other dollars governments piss away would be bothered by this.

People have a connection with Schilling as a public figure they don't have with thousands upon thousands of other startup doofuses who are all just random anonymous doofuses.
   40. Johnny Slick Posted: June 15, 2012 at 12:49 PM (#4157803)
Businessmen bear responsibilities that ballplayers don't. A businessman bears a responsibility to his employees to run his business well, and he bears responsibilities to his creditors - particularly if those creditors are the public - to take loans he can repay.
I have to agree with other people here... this just sounds like you're blaming a guy for being ignorant. I have no doubt that Schilling had no clue about the kind of spending that was needed to make an MMORPG. However, in the end, when you have a bad business plan that is clearly just going to blow up all the money that's put into it, is that really the fault of the guy with the bad business plan or is it the fault of the person who sees the badness of the plan but gives him the money anyway?

If Schilling was paying himself on the side for something more than the market rates I'd hold him culpable for that amount. In fact, that was my first thought when I heard about this story. I was like "wasn't Kingdom of Amalur actually rated pretty well? Someone must be skimming something off the top." However, if there really was no wrongdoing and just a grossly inexperienced CEO getting in over his head, well... we don't blame the victims of scam artists for being ignorant and I don't see why we should blame a guy with a bad business model because someone else gave him money to pursue this.

But if it turns out that there was fraud involved I reserve the right to change my opinion at any time.
   41. Tom Nawrocki Posted: June 15, 2012 at 01:04 PM (#4157822)
Governments piss away taxpayer money all the time. Aside from it being "Schilling is a Republican" related, I can't see why people who aren't bothered by the gazillions of other dollars governments piss away would be bothered by this.


Schilling's qualifications for running a video-game company - or even his qualifications for deciding which video-game company might be successful, if he truly hired a management team and absented himself from the day-to-day operations - appear to be that he was an excellent baseball pitcher who really, really liked playing MMORPGs.

If he just had to be in the video-game business, he could have easily invested in an existing company, rather than asking a government to subsidize his own vanity project.

His being a Republican makes Schilling more of a hypocrite, but the whole endeavor was stupid to begin with, and would be if he was a Republican, Democrat, Green, Tea Partier or Communist.
   42. Ray (RDP) Posted: June 15, 2012 at 01:23 PM (#4157840)
If he just had to be in the video-game business, he could have easily invested in an existing company, rather than asking a government to subsidize his own vanity project.


I agree. So he's a hypocrite. Yay. That doesn't distinguish him from scores of people who receive money from taxpayers.
   43. booond Posted: June 15, 2012 at 01:26 PM (#4157845)
This does sound like (Famous optimistic business owner + poor business acumen + ####sucking politicians) = Taxpayers money down the drain.

   44. Los Angeles El Hombre of Anaheim Posted: June 15, 2012 at 01:30 PM (#4157852)
I agree. So he's a hypocrite. Yay. That doesn't distinguish him from scores of people who receive money from taxpayers.
But he was a baseball player and an attention whore, so that makes him a piñata for BBTF.
   45. Lassus Posted: June 15, 2012 at 01:40 PM (#4157858)
But he was a baseball player and an attention whore, so that makes him a piñata for BBTF.

Yes, but that doesn't allow enough intersection in the persecution complex Venn diagram.
   46. Ray (RDP) Posted: June 15, 2012 at 01:40 PM (#4157859)
His pinata status here is because he is a vocal Republican.

EDIT: Mind you I have no use for him. I think he's in some respects a blowhard who happened to be really good at pitching a baseball.
   47. robinred Posted: June 15, 2012 at 01:40 PM (#4157860)
That doesn't distinguish him from scores of people who receive money from taxpayers.


It is virtually certain that Schilling's name and his fame/success in that part of the country helped him to get access to the pols who made the decision to give him the money. Also, he has been very outspoken about his political views on numerous occasions. Those are the reasons he is getting more blowback than another guy who did similar things would get, and why this is a story.
   48. thetailor Posted: June 15, 2012 at 01:40 PM (#4157861)
Can someone here who is knowledgeable about the topic substantiate exactly WHY they are so certain that the business plan was a joke and/or he's ignorant and/or the company was a terrible idea? Aside from the fact that, obviously, it didn't succeed?

It seems the consensus is that the business was doomed to fail, etc., but I have no idea why. I'm with everyone above in panning the crony capitalism and the fact that it's a shame that Rhode Island had to give the loan and lost so badly on it. I'm just not clear on those of the people above who are certain it was a disaster from the outset.
   49. Ray (RDP) Posted: June 15, 2012 at 01:43 PM (#4157863)
It is virtually certain that Schilling's name and his fame/success in that part of the country helped him to get access to the pols who made the decision to give him the money.


Yes. Just like any other well-connected person.

Are people actually surprised at how this works? It's what many of us have been complaining about for a long time.
   50. Lassus Posted: June 15, 2012 at 01:50 PM (#4157869)
I'm just not clear on those of the people above who are certain it was a disaster from the outset.

Internet be experts, yo.


Yes. Just like any other well-connected person.

This is pretty goofy.
   51. Johnny Slick Posted: June 15, 2012 at 01:50 PM (#4157870)
#48: As far as I've seen, MMORPGs are about the largest, riskiest thing you can do in computer gaming nowadays and 38 Studios simply did not appear to comprehend this. They seemed to think they could bring in ringers (to the extent that RA Salvatore and his crappy writing is a "ringer") and still build it in a fraction of the time and something like 1/5th the cost of other MMORPGs.

I guess it's not patently obvious to people not familiar with computer games but that's part of the deal here: if you're going to loan that kind of money to someone, you really need to go out and find people who are familiar with the industry you're loaning things to. Anyone with a passing interest in MMORPGs could have told the state that Schilling's plan was overly ambitious to the point of being a pipe dream.
   52. willcarrolldoesnotsuk Posted: June 15, 2012 at 01:54 PM (#4157874)
I sure hope that Citizens Bank accepts Duchy of Sylvandale sovereign ducats.
   53. robinred Posted: June 15, 2012 at 01:56 PM (#4157876)
Yes. Just like any other well-connected person.


There aren't that many "well-connected" people who pitched one of the most famous games in baseball history on a beloved regional team that hadn't won a World Series in 86 years and then got $75M from the govt for a gaming startup in that region, and then saw the startup go belly-up. If a famous, outspoken, conservative actor (say, Kelsey Grammer) did the same thing, it would be a story. Schilling has courted media attention his entire career; now he is going to get some he probably doesn't want. That reality may not be entirely fair to Schilling, but it makes perfect sense in context.
   54. Tom Nawrocki Posted: June 15, 2012 at 01:58 PM (#4157879)
His pinata status here is because he is a vocal Republican.


Well, we've certainly given a pass to every high-profile former-player Democrat who has pissed away millions of dollars in taxpayer money on a business that was little more than a vanity project.
   55. robinred Posted: June 15, 2012 at 01:59 PM (#4157881)
Are people actually surprised at how this works?


Uhh, no. Schilling's getting the money was far from surprising, and then there being media and internet blowback when it went under was entirely predictable. I have no knowledge base about the industry, so I have no idea if the failure of the company was predictable.
   56. Ray (RDP) Posted: June 15, 2012 at 02:02 PM (#4157884)
Well, we've certainly given a pass to every high-profile former-player Democrat who has pissed away millions of dollars in taxpayer money on a business that was little more than a vanity project.


You've fit Schilling into a category so small as to be meaningless. He goes in a box that is much larger than this.
   57. hokieneer Posted: June 15, 2012 at 02:25 PM (#4157913)
Can someone here who is knowledgeable about the topic substantiate exactly WHY they are so certain that the business plan was a joke and/or he's ignorant and/or the company was a terrible idea? Aside from the fact that, obviously, it didn't succeed?

I know nothing of the details of Schilling's plan, but building a MMO from the ground up, based on a new IP is a terrible idea. Too much up front capital, too risky, too long of a development cycle, and the market doesn't need another "traditional" MMO.

Blizzard and the half dozen other companies have that on lock down. The absolute best a new MMO based on a new IP could probably grab at this point is around 1 million subs (for reference the recent Star Wars MMO, which was highly anticipated, in development for many years, and is ####### Star Wars; peaked at around 1.5 mil subs). You would need to hold those million subs for a few years to recoup the nearly $100 million upfront development costs, new content generation costs (I would assume around $20-$30 mil a year, average AAA console cost), and server/tech maintenance.

Simply put, there aren't many things worse than an MMO to invest in.
   58. spike Posted: June 15, 2012 at 02:32 PM (#4157920)
Saying it's on "the people of Rhode Island" is a bit broad - it's on the lame duck governor Carcieri who ramrodded the project through despite the opposition of the majority of Rhode Islanders and Chafee, the Republican nominee for governor. The examination of the decision process should prove interesting, although there has been stonewalling from those involved. It will get interesting if the banks' suit or some other legal action gets any of Carcieri, Keith Stokes (the head of the RIEDC), or Michael Corso, the tax credit broker deposed. I assume Schilling himself will definitely have to testify or be deposed in this matter, which will be illumaniting as well.
   59. Ray (RDP) Posted: June 15, 2012 at 02:43 PM (#4157929)
I assume Schilling himself will definitely have to testify or be deposed in this matter, which will be illumaniting as well.


Hopefully they'll get him under oath and they'll be able to ask him whether the blood on the Bloody Sock was real or was just red paint.
   60. Randy Jones Posted: June 15, 2012 at 02:52 PM (#4157951)
You would need to hold those million subs for a few years to recoup the nearly $100 million upfront development costs, new content generation costs (I would assume around $20-$30 mil a year, average AAA console cost), and server/tech maintenance.


You forgot to factor in the profit from selling the game boxes though. I believe the cheapest version of the Star Wars MMO was $70, that did include one free month though.
   61. Tripon Posted: June 15, 2012 at 02:57 PM (#4157959)

You forgot to factor in the profit from selling the game boxes though. I believe the cheapest version of the Star Wars MMO was $70, that did include one free month though.


That's only in the first months though. After 3-4 months, the prices drop waaaaaaaaaaaaaaaaaaaaay down and it becomes 'bargain' buying. You can buy the new Star Wars MMO on Amazon right now for $19.99 with free shipping and no tax.

As for Shilling, its part of his financing plan that irks me, like his insistance of getting tax credits that weren't spelled out in contracts and then claiming he got screwed over. Maybe some middle manager did promise him the moon, but damn man, if its not in the contract, it means nothing. To me, his plan seemed to be "I'm Curt Shilling, I can get people to give me money." And when people stopped, he tried to play the victim card.
   62. Tom Cervo, backup catcher Posted: June 15, 2012 at 02:58 PM (#4157961)
He goes in a box that is much larger than this.


Am I the only one reading this as a fat joke?
   63. Tripon Posted: June 15, 2012 at 02:59 PM (#4157964)

Am I the only one reading this as a fat joke?


Could be an old Al Gore joke. Maybe Ray is talking about the lockbox.
   64. Randy Jones Posted: June 15, 2012 at 03:03 PM (#4157969)
That's only in the first months though. After 3-4 months, the prices drop waaaaaaaaaaaaaaaaaaaaay down and it becomes 'bargain' buying. You can buy the new Star Wars MMO on Amazon right now for $19.99 with free shipping and no tax.


Sure, but using the Star Wars MMO as an example again, it sold over 1.5 million units at that initial price(many were actually collector's editions that cost more). That recoups a lot of the initial development cost right there.
   65. McCoy Posted: June 15, 2012 at 03:03 PM (#4157970)
Another fun fad was the acohol mist bars.
   66. McCoy Posted: June 15, 2012 at 03:04 PM (#4157977)

Sure, but using the Star Wars MMO as an example again, it sold over 1.5 million units in the at that initial price(many were actually collector's editions that cost more). That recoups a lot of the initial development cost right there.


So is Curt going to have a "bloody sock" collector's edition of his game? A Star Wars anything shouldn't really be used as an example for any non-star wars involved scenario.
   67. hokieneer Posted: June 15, 2012 at 03:05 PM (#4157980)
You forgot to factor in the profit from selling the game boxes though. I believe the cheapest version of the Star Wars MMO was $70, that did include one free month though.


Yes, I'm an idiot. The first month sales really help recoup the long development costs, but as Tripon points out that price drops quickly.

After a little more research, my 1 million subs might be extremely optomistic. From the data here, it looks like there are exactly 4 MMOs that currently have a 1mil+ sub base.
   68. DA Baracus Posted: June 15, 2012 at 03:06 PM (#4157983)
Don't forget that 38 Studios said they had sold the homes of some relocated employees but in fact did not sell any of them, which they found out about after they were laid off.
   69. Tripon Posted: June 15, 2012 at 03:06 PM (#4157984)
Well, you can buy Kingdom of Agular for under $30 now. And that game came out late Feb. It hasn't even been 4 months yet, and the price already been cut in half.

Edit: Very few games keep their price, except maybe the majority of Nintendo games. I still can't find an Zelda: OoT copy for $20 yet, and Mario Galaxy 2 is still selling for $40 despite it being over two years old now.
   70. cercle Posted: June 15, 2012 at 03:21 PM (#4158017)
According to Chafee, Amalur needed to sell 3 million units to break even. Chafee's number may not be reliable, but even if it was 2 million units, it would be one the better selling RPGs of all time. Relying on your franchise startup to sell that well would be pretty dumb.
   71. formerly dp Posted: June 15, 2012 at 03:41 PM (#4158065)
Relying on your franchise startup to sell that well would be pretty dumb.

Or overestimating the ability of your name to sell people on the franchise. I don't imagine Schilling has so much cred in the MMO gamer world that many people would say "Oh, CURT SCHILLING's game? I'm in for 5!". But in Curt Schilling mind, I'm sure that happens a lot.
   72. Select Storage Device Posted: June 15, 2012 at 03:56 PM (#4158086)
According to Chafee, Amalur needed to sell 3 million units to break even. Chafee's number may not be reliable, but even if it was 2 million units, it would be one the better selling RPGs of all time. Relying on your franchise startup to sell that well would be pretty dumb.


Any smartly operated studio would be thrilled with the numbers KoA pulled in and would have publishers kicking down their door. If Chafee's number is to be believed, that's a situation that 38 studios put themselves in, and not some indictment on the video game industry. They had to sell that many units because they effed up that badly.
   73. hokieneer Posted: June 15, 2012 at 04:01 PM (#4158100)
Any smartly operated studio would be thrilled with the numbers KoA pulled in and would have publishers kicking down their door. If Chafee's number is to be believed, that's a situation that 38 studios put themselves in, and not some indictment on the video game industry. They had to sell that many units because they effed up that badly.

Agree completely. 38 studios has to be mixing some of the costs of the console games and the MMO, or heavily factoring in the cost to acquire BHG with that kind of break even estimate.

2 million is right around the number that Mass Effect 2 sold.
   74. spike Posted: June 15, 2012 at 04:18 PM (#4158144)
Questions about whether 38 Studios was forthright with REIDC about the level of risk -

http://www.golocalworcester.com/business/investigation-secret-documents-reveal-true-risks-of-38-studios/
   75. smileyy Posted: June 15, 2012 at 04:42 PM (#4158198)
I have no idea what the development cost was, but Torchlight is a popular and successful game that had sold 1M copies as of a year ago. Like 38studios offerings, they also wanted to be an MMO, but reduced their scope to something more manageable to get something moneymaking out the door.

http://en.wikipedia.org/wiki/Torchlight
   76. Randy Jones Posted: June 15, 2012 at 04:46 PM (#4158211)
Torchlight sold 1M copies, but was only like $14.99 at full price. I believe it was only digital sales though, which generally mean lower cost and more money going to the dev/publisher.

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