38 Studios: A Cautionary Tale of Blind Visionaries

No one can deny that this past week has been a catastrophe of near biblical proportions for Curt Schilling’s 38 Studios and their proposed “Copernicus” MMO.

By now most avid MMO watchers are familiar with the story of how on May 1, of 2012, 38 Studios defaulted on a $1.1 loan payment to the Rhode Island Economic Development Council. Once that transpired, a series of meetings between the Rhode Island government officials and 38 Studio how to resolve the default. A comprehensive financial timeline of this matter has been studiously complied by Atropos over at AmalurFoundry.com

Eventually 38 Studios came up with the $1.1 million in funds to cover the default but they failed to meet their payroll and the company is teetering on the edge of insolvency. The latest news is that Curt has returned to talk to his team and the layoffs have begun with fired workers attending a Turbine job fair nearby.

We now have the spectacle of thousands of news stories which makes both 38 Studios, the government of Rhode Island and even MMO industry itself look suspect and incompetent. For a company that only a few years ago bragged about “world domination through gaming” and made such a big deal about their AAA talent — this very embarrassing.

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The video news report above complete with TV cameras and reporters scrum puts Curt Schilling in a very unflattering light. The scene is somewhat reminiscent of swindler Bernie Madoff being accosted by angry investors and reporters looking for answers. That said, the government and citizens of Rhode Island have a right to be concerned about the potential loss of millions of dollars for investing in a failed video game company.

How could 38 Studios not see this coming and fail to contact the Rhode Island authorities in advance to preempt this public relations cataclysm?

This 38 Studios debacle has sent shock waves throughout an already anemic MMO industry. Many fans are stunned, bewildered and puzzled at how this could have happened.

The Drama Unfolds

There are many online discussions going on now that offer some useful speculation and perspective on what could be going on behind the scenes. One in particular is at Gamasutra where MMO personality and gadfly Derek Smart provides some interesting inside baseball analysis of the situation.

Another thread over at the sophomoric and routinely sordid FoHguild.org (incidentally where Curt loves to hang out) there is some unusual insight from posters and some current 38 Studio employees. Sanity and objectivity have made a rare appearance on the forums; Curt’s band of merry fanboys are nowhere to be seen as the stone cold reality of this debacle has set in.

One of the first things the team decided was to finally released some video footage of their MMORPG. It is worth noting — that with the exception of a few pieces of concept art — this is the first glimpse of this MMO that the public has seen almost 6 years after the company was formed as Green Monster Games back in 2007. After many bad decisions, Curt and his much celebrated team of A-list talent finally did something right.

[yframe url=’http://www.youtube.com/watch?v=m9nvnrP0j8U’]

I like the video in the same way that a starving man happily eats a crust of stale bread. At least it’s more than we had previously. Surprisingly, the scenery has that magical quality of being both mysterious and inviting and worthy of adventure. My only concern is that there are no NPCs being shown. Contrast this to the first World of Warcraft trailer released in 2003 that showed actual NPCs. This video is a start to repair the damage done but 38 Studios will need to do much more if they plan on releasing Copernicus.

Fool Me Once, Shame on You

I have been a long-time admirer of 38 Studios and Curt Schilling’s partnership with R.A. Salvatore and Todd McFarlane. It was their desire to create a serious MMORRG to give players a real alternative to the WoW clones out there that gave many MMO fans some semblance of hope in those dark times. In particular, it has been R.A. Salvatore’s interviews about his passion for EverQuest and what it meant to him that had given me hope that finally someone understood the greatness that has been lost from MMOs in recent years. I hoped and dreamed that with his influence on the project it would return in some  form.

Given the current news about the company, my previous article seems overly positive and bullish. I cast aside healthy skepticism because I wanted to believe. Call it irrational exuberance.

Back then and even today, very little was known about the MMO itself. Many of us based our enthusiasm on the star quality of the people behind the company; namely Curt Schilling, R.A. Salvatore and Todd McFarlane. Unceasingly passionate, Curt has spent the last 5 and a half years leveraging his baseball superstar status attending trade shows and being interviewed by the gaming press. We always figured he was telling the truth and that his company would deliver the goods.

[yframe url=’http://www.youtube.com/watch?v=oDEz8BU4lqc’]

But many of us have felt something is not quite right at 38 Studios. When Brett Close left 38 Studios I was concerned. Scott Cuthbertson left as well and who knows how many others have quietly left. When talented people leave it’s troubling.

A few months ago I planned on writing an article highlighting the 5 year anniversary of the creation of Green Monster Games. The anniversary of the company came and went with no fanfare. The article intended to focus on the outrageous fact that besides a few pieces of concept art there was nothing to publicly show for all of those years and millions of dollars and man hours spent. Although I never got around to writing it but I had a strange feeling something was amiss with the company.

Making a MMO is Not Rocket Science

Many MMOs have come on the scene since Ultima Online, EverQuest and Asheron’s Call. By now the s0-called all-star talent that Curt Schilling has assembled should know how it’s done and they have the advantage that they are standing on the shoulders of giants. The success of the most popular MMO on the planet — Word of Warcraft — has been widely analyzed to death. The failure of other MMOs like Sigil’s Vanguard has also been well documented.

How could a company get so lost with so many clear road-maps?

What 38 Studios Needs to Do Now

1. Fire Those Responsible in Upper Management

The financial community, investors, the Rhode Island government, taxpayers and yes even MMO gamers need to know that 38 Studios is accountable. The best way to do this is to fire someone who is responsible for this mess in upper management to make an example of them. Failure to do so will be interpreted as weakness. Sadly, they have already started laying off people and I bet none of them are in management. There are too many people with dubious MMO experience in the current executive team.

Update: it looks like Jen McClean is no longer with 38 Studios according to her Linkedin profile. This is good news as I was always bristled at her flimsy MMO qualifications. Recent hire John Blakely (the guy who oversaw EverQuest2) is also gone as well.

2. Renegotiate the Deal with Rhode Island

It looks as though Curt is attempting this now. If 38 Studios fails then Rhode Island is out their $75 million. The deal will have to be renegotiated or it’s all over because it’s doubtful anyone will invest in 38 Studios now with all the bad press.

3. Release the Name of Your MMO and Feature Details

The name of this MMO must be released immediately! Start revealing details about what this MMO is all about.  By doing both, they will at least have a chance to start to winning back the allegiance of the fans and gain new fans. If 38 Studios doesn’t release the name of this MMO within the next month I predict you can kiss 38 Studios goodbye.

4. Start Engaging the MMO Community

Show your fans some respect. Hire someone how knows how to interact and engage with MMO communities that isn’t a friend or a relative. (Wait, you already did but it made no difference because I’m sure their advice was ignored because someone at the top knew best). And while you are it, stop hiring professional executive drones from Corporate America that have no MMO experience.

5. If All Else Fails…Sell the Copernicus Assets

The assets of Copernicus have just been valued at $20 million Frankly, selling the assets may be the end result as thing are looking very grim right now but who would buy them? SOE perhaps? Boston.com just released a great article outlining the possible options that 38 Studios has.

Epilogue

It’s been a tragic week for the MMO industry. To make matters worse, even Bioware is laying off workers on Star Wars the Old Repulic MMO. Blizzard and SOE laid off a massive number of workers earlier in the year too. One wonders if the era of the AAA+ MMO is finally coming to an end?

If 38 Studios fails it could prevent future MMOs from getting funding as venture capital dries up completely. After all, who wants to invest in an industry riddled with failure?

Everyone who cares about this genre wants and needs this MMO to come out and do well. We need more alternatives to the WoW clone factory. Every time a new MMO that takes a few chances fails and WoW still has a heartbeat is an affront to all that is good and right in this world.

Many of us have supported and believed Curt Schilling, R.A. Salvatore and Todd McFarlane’s as they embarked on this journey. Let’s not forget the real heroes, the devs in the trenches who don’t talk about the MMO — they actually make the MMO. It must be very tough to be a 38 Studios employee and see the actions of a few incompetent leaders potentially invalidate all the work you have done for all these years. Non-management people always get screwed in corporations while the executives walk between the raindrops and remain unscathed with generous compensation packages.

For the past 5 years, Curt Schilling’s 38 Studios has been utilizing a misguided marketing strategy that consisted of touting the high level of talent that they have hired and little else. Combine that with the strength of Curt Schilling’s own tenacious personality and locker-room bravado and you have the essence of their marketing plan. And all those years of… “we got the best talent” street cred vanished overnight with a dumb decision to miss a loan repayment. It was a terrible gamble to base so much on so little.

Throughout the years 38 Studios could have done more to interact with their fan base but they were too busy being visionaries and patting themselves on the back and basking in their greatness. There has been very little outreach via social media or to MMO bloggers and commentators. Even websites set up by fans to promote the MMO were largely ignored while Curt would be freely posting on the FoH forums.

The byline of the video that 38 Studios just released is “A World Worth Saving”.  Sadly, we don’t know enough about the world to know if it is worth saving because after almost 6 years, incredibly, they have released little to no information about their MMO. Either they had nothing to release or bit off more than they could chew and were afraid that their MMO feature set would get scrutinized and panned. At some point you have to be honest about what you are working on and let the chips fall where they may.

All of this secrecy and timidity has not served 38 Studios well. The support and goodwill of a passionate fan base could have made the difference in the months leading up to recent financial fiasco but it was carelessly squandered by bad leadership and bad advice. How can anyone get motivated about a MMO that they know nothing about? How could all the “talent” they hired stay silent about these glaring oversights?

Making a MMO is no easy task. It takes a vision, talent, investors, dedicated devs and a motivated fan base. Falter on any one of those and you court disaster. Ultimately the buck has to stop with someone. Going forward, the only way Mr. Schilling can ever regain the trust of the MMO community and the many fans that have followed this long odyssey is to come clean, admit what happened and plead for his company. Only then can he regain the trust that has been eroded and get back to work making the MMO of his dreams.

-Wolfshead

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