The history of video games is littered with legal disputes, surrounding everything from copyright infringement to accusations of libel. Nintendo faced off against Universal Studios over the similarities between King Kong and Donkey Kong, whilst Epic Games faced a legal battle against Too Human developer Silicon Knights over use of the Unreal Engine. Most recently, former Bungie in-house composer Marty O’Donnell reached a settlement with his former employer over his unfair dismissal.
Although some lawsuits seem to appear more than a little frivolous, such as Lindsay Lohan’s attempts to sue Rockstar Games over a perceived use of her likeness in Grand Theft Auto 5, other disputes are the response of major financial issues. Such was the case with Kingdoms of Amalur: Reckoning and 38 Studios. Although the title sold well upon release, and received a string of fairly good reviews and positive fan reception, the company was facing financial ruin behind the scenes.
Eventually, 38 Studios was forced to lay off all its staff, including developer Big Huge Games. The problems would not stop there, however, as 38 Studios was well behind with loan payments to the state of Rhode Island’s Economic Development Corporation. The EDC took 38 Studios, or what remained of it, to court, stating that the 38 Studios failed to inform the EDC of the likelihood that Kingdoms of Amalur: Reckoning would be a financial failure. Now, a settlement has been agreed.
A judge has awarded a partial settlement of $12.5 million in the case against 38 Studios, in response to the $75 million loan the company received. This follows on from a previous case against the developer, which resulted in a settlement of $4.4 million. There is apparently more to come as well, continuing the bad news for former Red Sox pitcher Curt Schilling, who owned 38 Studios.
Schilling used $50 million of his own funds alongside the $75 million loan, and put together a strong team to help bring Kingdoms of Amalur: Reckoning to store shelves. The game’s lore was written by veteran fantasy author R. A. Salvatore, whilst Spawn-creator Todd McFarlane was responsible for the artwork. The end result, although not a classic, is seen as an under-appreciated gem of the last console generation, with a rich world to explore.
Unfortunately, unless the game had managed to sell over 3 million copies – a huge amount for a new intellectual property from an unknown developer – it would not have even broken even, let alone made a profit. In the end, the initial outlay of funds doomed 38 Studios to failure, particularly given that the company was already working on Kingdom of Amalur: Reckoning’s MMO follow-up Project Copernicus. In the end, the studio’s implosion seems tragically inevitable, and there will no doubt be further pain to follow for the remains of a studio that seemed to be equal parts hope and hell.