38 Studios and Big Huge Games cut entire staffs

According to sources close to Joystiq, both 38 Studios and Big Huge Games have laid off their entire staffs. The information came just one hour prior to a press conference held yesterday by Rhode Island Governor Lincoln Chafee regarding the financial trouble the studios had recently found themselves in.

“It’s not a good situation; I’m not here to deliver good news,” Chafee said to open up the conference.

The governor and one of his advisers, Jon Savage, expressed no knowledge of the layoffs. However WPRI, a local-area TV news network, acquired an internal email regarding the situation that only further supported Joystiq’s claims.

Here is what the email said:

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.

Chafee did not blame anyone regarding the financial disaster surrounding 38 Studios, stating that would only come “over time if we’re not successful in getting this company financially solvent.”

In order to do so, the governor claimed that it will be “very, very expensive” and cost “tens of millions of dollars” just for marketing. This information Chafee claimed to receive from “industry experts,” who also told him that he was making the right decisions through this entire process.

“I asked the experts: What could have we done better?” said Chafee. “And they were telling me, ‘You did everything right. You put your money in, you supported the game, and you’re better off not meddling.’ If I had meddled there wouldn’t be all this violence in these games, all the sexism.”

Even though Kingdoms of Amalur: Reckoning, made by Big Huge Games, sold 1.22 million copies in its first 90 days, Chafee revealed that it needed to sell 3 million in order to merely break even. Without meeting those requirements and expectations, there was only one thing the governor could say about the title’s outcome.

“The game failed,” Chafee declared.

The first title by 38 Studios, Project Copernicus, was intended to be a MMO set in the Amalur universe. Footage of the game finally appeared via an environment video released by the company last week. It now appears Copernicus will never see the light of day.

Curt Schilling, founder and chairman of 38 Studios who is best known for his All-Star baseball career, has been unreachable for comment regarding the recent developments. Schilling had already plunged $30 million of his own funds into the company and has told state officials he can no longer spare any more to invest.

[Joystiq]