Curt Schilling and 38 Studios lay off all workers amid enormous cost to Rhode Island

ESPN's Curt Schilling is in quite the mess away from the television cameras.  It all has to do with Schilling's video game company, 38 Studios.  In case you weren't aware, Curt Schilling owns a video game studio and actually released a roleplaying game earlier this year while working on one of those huge fantasy multiplayer role playing games.  The way Schilling's video game world has crumbled to pieces, he probably wishes it was all a fantasy.

Trouble began brewing a week ago when it came to light Schilling's company was having trouble paying off loans from the state of Rhode Island, which committed $75 million to the startup venture.  Earlier this week, it was reported layoffs were beginning.  Yesterday, 38 Studios layed off their entire staff which had consisted of more than 400 workers.  Details from The Verge...

Curt Schilling's 38 Studios laid off all of their employees today, shutting down both their Rhode Island office and Maryland-based subsidiary Big Huge Games, a source familiar with the company tells Polygon.

The news came as a surprise to nearly everyone involved, including the state of Rhode Island and Governor Lincoln Chafee who during an afternoon press conference said that as of this morning they hadn't heard a word about possible layoffs or a closure.

During the evening press conference Chafee attributed the sudden studio closure and financial plummet to the studio's fist game, Kingdoms of Amalur: Reckoning, which he said "failed."

Former Rhode Island Governor Donald Carcieri, instrumental in bringing the studio to Rhode Island thanks to the lucrative loans, called it an "unfolding tragedy" in the state.  Schilling and the Governor have been hammered for how this disaster has played out, costing the state millions of dollars, and leaving hundreds without jobs.  A source told Kotaku that employees hadn't been paid since April and the company notified all employees of the layoffs yesterday in an e-mail... yesterday.  Yipes.  The more details that emerge about 38 Studios, the worse it looks for Schilling and Rhode Island.  

So hard to fathom Curt Schilling's video game company going bust. We've seen athletes blow money before, but this is a new 1.

— darren rovell (@darrenrovell) May 24, 2012

According to the Boston Globe, Rhode Island has already made $49 million in payments to the company.  The state of Rhode Island orignially offered Schilling the loans to bring the company to Rhode Island from its original Massachusetts headquarters and now taxpayers have to bear the burden of the failure.

So how did an entire state end up pouring millions and millions of dollars into an expensive video game by a baseball pitcher?  State representative Robert Watson blamed the ex-Governor for falling in love with a local sports legend:

“I think the governor had stars in his eyes, the whole idea of playing ball with a baseball player intrigued him and others,’’ said Republican state Representative Robert Watson, former Rhode Island House minority leader. “And I think they got blinded by that celebrity.’’

Let this be a lesson to state governments everywhere.  Don't waste millions of your taxpayers' dollars in famous athletes who happen to like playing video games.

[The Verge]