38 Studios burned through $133M before going bankrupt - report

Newsbrief: Kingdoms of Amalur developer 38 Studios burned through $133 million -- much of that on an MMORPG that it didn't stay alive long enough to release -- before declaring bankruptcy. Analysts claim that amount is in line with how much a developer would expect to pay a big team of developers working on an online title for six years (as was the case with 38 Studios), according to a report from WPRI. Others like Rhode Island Governor Lincoln Chafee, however, have accused the company of "living high on the taxpayer's dollars." "38 Studios was hemorrhaging cash -- our cash," said Saul Kaplan, who heads the Rhode Island group that loaned $75 million in taxpayer money to the developer. "The thing that is most amazing to me is their burn rate was about $5 million a month all through 2011, heading into 2012, and it didn't slow down even when they knew they were running out of cash." Documents obtained by WPRI show 38 Studios projected it would make back $109 million this year from Kingdoms of Amalur's sales. The company overestimated demand for the game, though, and it sold only 1.3 million copies of the game instead of the 2 million minimum 38 Studios needed to cover its advance from Electronic Arts and begin earning royalties.