38 Studios is arguably one of the greatest financial blunders in the history of video games. The Rhode Island Economic Development Corporation, a portion of the Rhode Island government meant to draw businesses to the state with loans from the state, gave 38 Studios $75 million, and 38 promised to create over 750 jobs over three years. As you may know, 38 Studios big game, Kingdom of Amaluar: Reckoning, did not sell nearly well enough to make repay these debts and the studio declare bankruptcy. This bankruptcy has left Rhode Island holding the bag, and the state must now repay this debt.
According to an AP report, a bill was introduced last week to the Rhode Island House by Democratic Rep. Karen MacBeth that would allow Rhode Island to stop payments to the loan, and default on it. Previous attempts were made by the Rhode Island legislature last year, but those efforts failed and the state paid the $2.5 million first payment. They may be swayed more this try though, as the new payment is $12.5 million.
The Rhode Island governor’s office opposes the potential default however, arguing that the default would significantly hurt the state’s financial reputation and significantly increase the cost of borrowing money.
by, Bobby Marquardt