In debt to the state of Rhode Island, 38 Studios may lose its rights of the IP Kingdom of Amalur: Reckoning to the state.
Since the studio is in debt to Rhode Island for $75 million, 38 Studios has laid off all 379 full-time employees as reported by WPRI, a local news broadcast in Rhode Island. These layoffs were enclosed in emails that read:
"The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a company-wide 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."
Lincoln Chafee, the governor of Rhode Island, has refused further financial support to 38 Studios to prevent "giving 38 Studios additional taxpayer dollars."
It would have taken Kingdom of Amalur over three million in sales to match cost, but it only sold over one million. Representation at the studio hasn't reported its next move yet, whether it being bankrupcy or not, but the rights to Kingdom of Amalur, along with all other intellectual property, will likely be rewarded to Rhode Island to help repay the debt.