Curt Schilling, Bloody Socks and 38 Studios' Red Ledger

This column can also be found on Engaged2Games.

Curt Schilling is nothing if not outspoken. The man has cemented his legacy as a baseball player, staunch Republican and an avid MMOer. Throw in the fact that he's more or less a legend in Boston for helping the team win the 2004 World Series and you've got a man with lofty status.

Curt Schilling is also nothing it not cocky and brash, two traits that have paid dividends on the field, but haven't quite translated as well off the field.

The Providence Journal reported that 38 Studios—Schilling's pet project—defaulted on a May 1 loan payment of $1.125 million. The payment was on a $75 million loan issued by the state of Rhode Island to lure 38 Studios to Providence, RI, from Maynard, MA.

Now, Schilling is scrambling to save the studio, but things are looking bleak. Not just for him, but for the Kingdoms of Amalur universe and Big Huge Games.

When 38 Studios made the move in 2010 to Rhode Island, it wasn't without cries of dubiousness or shadiness. Rhode Island was quick to offer up $75 million to the company, despite the deal lacking the endorsement of then running for governor Chafee and close to 54% of Rhode Island residents not favorable towards the deal.

Rhode Island promised Schilling $75 million, of which $49 million has already been called upon. RA Salvatore is slated to receive $1.45 million per the terms of the "consulting" agreement he signed in 2007. That number can balloon to $5 million in royalties from sales of Kingdoms of Amalur: Reckoning when it's all said and done. It's safe to assume that the contracts signed by both Todd McFarlane and Ken Rolston are similar in size and scope and all three represent the problem.

That's nearly $5 million tied up in three individuals, which could theoretically balloon to $15 million in royalties and incentives. One-third of the already secured financing invested in the talents of three individuals. Don't get me wrong...those three are among the best at what they do. The price just seems a little high for what 38 Studios was getting.

And it's because Schilling's hubris got the best of him.

Schilling has long been a man with words for any situation. That stubbornness and ego has always worked out for him, but in the case of 38 Studios it looks like it got a little out of hand. The picture being painted in all of this is that Schilling was a little too overzealous in spending. You can't hand out multimillion dollar consulting contracts to top talent and not have the product to show for it.

There's something to be said about wanting top-notch talent and that's fine. Not when paying for the talent comes at the expense of actually delivering the product though.

Sure, Kingdoms of Amalur: Reckoning has been released and Copernicus is in the works. Both of those games are being handled by Big Huge Games though. In fact, you could even argue that Kingdoms of Amalur: Reckoning is really just the Big Huge Games work Crucible that was in development before the THQ fiasco, re-skinned to fit within Schilling's Amalur universe.

Presumably, it's not as simple as that, but the point is that 38 Studios was founded in 2006 and in six years it's yet to produce anything.

38 Studios has also backed out of E3 2012. Considering how high profile the event is in the gaming industry, you would think a studio such as 38 Studios (and backed by EA nonetheless) would have some presence at the show a year before their major IP is due to hit stores in 2013. Instead, the studio backs out and is now asking for more money.

There are a lot of people that want to see Schilling fail. Maybe it's that hubris that they respected on the field or maybe they just think he talks too much. His gambling has paid off in the past, but now that he's gambling with the livelihood of the 288 employees at 38 Studios and nearly 100 employees at Big Huge Games. According to Joystiq, an appointed Rhode Island trustee could conceivably own "all rights, title and interest in any projects, including video game projects" of 38 Studios.

That's right. Schilling put up as collateral for the loan the entire Kingdoms of Amalur universe. A universe that, until February 2012, didn't really exist in a marketable form. If the deal falls through it's not likely the trustee will want to start a new studio to further the universe. It's unfathomable to think that a studio that just launched a game as solid as Kingdoms of Amalur: Reckoning is in dire straits, but if you look at the numbers you see a different story.

Sales from Kingdoms of Amalur: Reckoning will continue, but seeing as how it barely crept past a million sold (between physical and digital), it's not likely to sell countless millions more. That's not a reliable tap for Rhode Island to call upon to keep paying back the loan. Selling a million copies is a worthy milestone for sure, but it's not one you can plan to sustain an entire studio on.

Schilling recently met with Rhode Island economic development officials to discuss getting more funding, but that meeting is extremely telling. Well, that and the fact that 38 Studios missed the May 1 loan payment. Schilling seems defeated and Rhode Island is fighting a PR battle at this point, trying not to look like promising the money was a big egg on their face.

The question of whether or not Schilling gets more money to keep 38 Studios afloat will be answered soon enough. As it stands right now though, things don't look so sunny in the realm of Amalur. Schilling borrowed a lot of money against something that wasn't quite a sure thing and now both the state and Schilling are scrambling to save jobs and intellectual property.

Schilling probably shouldn't worry too much though. I've heard some have the ability to change their a cost.