Legal

The 38 Studios disaster continues to unfold today, as the troubled studio laid off its entire staff and may be selling off its Big Huge Games division in Boston. Boston's Fox 25 News speculates that the studio may close by this weekend.

38 Studios CM Charles Dane confirmed being laid off on Twitter: "Now on the market. I had an awesome run with 38 Studios, but this dream is now ending."

Word is that the company is also selling its subsidiary, Big Huge Games. Big Huge Games is the maker of Kingdoms of Amalur: Reckoning, 38 Studios' single-player prequel to its Copernicus MMO. This would not be the first time that Big Huge Games was sold by its parent company, as the studio experienced the same event back in 2009.

Oh his Facebook page, Curt Schilling stressed that Reckoning did quite well in sales. "I wanted to clear up some misinformation around 38 Studios' first product, Reckoning. Sales of Reckoning outperformed EA's expectations and sold more than 1.2 million units in the game's first 90 days in the market."

[Update]: Developer Ryan Shwayder has also confirmed the layoffs via his personal blog.

The bad news continues to accumulate for Rhode Island developer 38 Studios. According to Rhode Island governor Lincoln Chafee, the company has received a grand total of no outside investment. It also has not received any of the tax credits that it requested, leaving the studio still deep in the hole. Chafee has stated that he is doing everything in his power to prevent the studio's closure.

Staff members are also leaving the company at an alarming rate, with CEO Jen MacLean and senior VP of product development John Blakely both confirming their departures from the company. The hiring of both individuals was trumpeted as a mark of success as recently as March of this year, and Blakely was still employed by 38 Studios as recently as Monday evening. There's even talk of the company's health insurance running out. None of this news suggests that Curt Schilling's company will make a quick turnaround -- if indeed it makes a turnaround at all.

We've been following the mass reports of hackers bypassing passwords and authenticators to rob Diablo III accounts blind, and now we have a new twist on the story. While Blizzard confirmed "an increase in reports of individual account compromises," the studio says it has no hard evidence that hackers have found a way to skirt around the authentication system.

Community Manager Bashiok said that the company is taking the claims "extremely seriously" and is investigating the rash of account compromises. "Despite the claims and theories being made, we have yet to find any situations in which a person's account was not compromised through traditional means of someone else logging into their account through the use of their password," he said. "While the authenticator isn't a 100% guarantee of account security, we have yet to investigate a compromise report in which an authenticator was attached beforehand."

Blizzard is assisting compromised customers by restoring stolen items and rolling back their accounts. The studio has a post up on its forums to help players protect their accounts and get assistance if theft occurs.

Bungie's long-rumored MMO project has been outed by the Los Angeles Times in its coverage of a games industry lawsuit. According to the article, the company is developing a new IP called Destiny consisting primarily of sci-fi first-person shooter titles, the first of which will launch in 2013 on the Xbox 360.

The title will be sold at retail but will also feature DLC, microtransactions, and subscriptions. But is it an MMO? That's still to be determined; the company hasn't released details. Eurogamer has put together a piece summarizing various Bungie comments on the Destiny series, including hints at persistence and a long-term commitment from both fans and developers.

"I can't get into specifics, but we're definitely looking at building a universe that people want to spend time in," community director Brian Jarrard said in April of 2010. Bungie's Joseph Staten also commented on the IP at GDC 2010. "Wouldn't it be great if we could make a world that was always there for you," he said.

Nexon's recent acquisition of Taiwanese publisher Gamania will be scrutinized by the Fair Trade Commission (FTC), according to a report in the Taipei Times. A hostile takeover is alleged, and FTC chairman Wu Shiow-ming said the commission will "ask Nexon to comment on its definition of Gamania's market share, the particular field it defines Gamania as being in, and its current relations with Gamania."

This will help determine whether Nexon has violated the Fair Trade Act, which mandates that any merger involving a company with more than 25% market share in a particular field must be reported to authorities.

Gamania contacted the FTC, ostensibly out of concern for Nexon's impact on the Taiwanese gaming industry. "It would be absolutely detrimental to the development of Taiwan's online gaming industry if a large-scale foreign corporation was allowed to take control of the local industry's operating channels and resources, whether the integration is horizontal or vertical," the company said.

If last week's Project Copernicus flythrough had been a hopeful note, the latest news out of 38 Studios is another downturn. Following a meeting today, the Rhode Island EDC board decided to take no action to help the ailing company at this time. Governor Lincoln Chafee said following the meeting that the financial situation of the studio remains unchanged from last week, but did note that the company has seen some layoffs and underwent unspecified internal shifts.

Founder Curt Schilling did not directly respond to press inquiries, stating that he would answer questions when he is able to do so. He did, however, state that he was not taking further taxpayer money. Whether or not there will be a company there to take any money in the near future is still very much in doubt, however, and while Chafee has been a bit more diplomatic about aiding the studio, he has stressed that any assistance would be far on the conservative side.

It is not every day that a U.S. governor is the one to announce the launch window for an MMO, so savor the weirdness while you can: Rhode Island Governor Lincoln Chafee announced at a press conference that 38 Studios will be releasing code-name Project Copernicus next summer. "What I understand is Copernicus is June of '13," Chafee said. He also stated that he thought the financial deal was a "risky enterprise" from the start.

38 Studios Founder and Chairman Curt Schilling said on Facebook that rumors of his using the state funds to repay his personal investment in the company was "not true." In a separate post, Schilling attempted to set an optimistic tone: "We will find a way, and the strength, to endure."

We have been following the financial turmoil that 38 Studios is in following its default on paying back Rhode Island for its $75 million loan. The studio and state are looking for options, but in the meanwhile, 38 Studios has been struggling to make payments by holding back employee paychecks and seeking additional capital from private investors.

If you're familiar with the phrase "robbing Peter to pay Paul," you'll understand the latest episode in the ongoing 38 Studios financial crisis. Except replace "Paul" with "the state of Rhode Island" and "Peter" with "the company's employees." Yes, in order to make the most recent payment to the state that sparked this whole crisis, the Rhode Island Economic Development Corporation has been informed that Curt Schilling's company is paying the state but not paying any of the company's employees. According to anonymous sources, all temporary employees and contractors have also been terminated.

While this measure might help forestall immediate action, the company is still on the hook for a $75 million loan, and Rhode Island governor Lincoln Chafee has made it clear that the company is looking for more assistance from the state in order to remain viable. 38 Studios continues to make no public statements at this time. We'll no doubt have more on this story in the coming days as it continues to develop.

Call them lockboxes, lootboxes, super packs, gift packs, treasure boxes, mystic chests, or Chupacabra's lunchpails, but these virtual boxes of mystery, fame, and fortune are all the rage in MMOs these days. Few studios have resisted the siren's call of such easy money, much to the dismay of many-a-gamer.

The idea is that a game will dish out to players free locked treasure boxes that require purchased keys to open. The allure of the box's mystery prize is often too strong to resist, especially when there's the possibility of a huge reward inside. The result too often is strong buyer's remorse and studio glee.

There's been a lot of conversation around lockboxes here on Massively, so I wanted to dedicate this week's Perfect Ten to dissecting the truth, the whole truth, and nothing but the truth of these items for you.

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Generally, when your company defaults on a major loan, you might expect an emergency meeting about the loan and the company's future would produce some results. But apparently today's meeting between 38 Studios owner Curt Schilling and Rhode Island governor Lincoln Chafee resulted in... absolutely nothing. Specifically, Rhode Island's Economic Development Corporation will take no immediate action to prevent the studio from going under, with Chafee on record as asking, "How do we avoid throwing good money after bad?"

It's a loaded question if you consider that the failure of 38 Studios would put the state's taxpayers on the hook for more than $112 million. Schilling has declined to elaborate on the company's state in interviews, and he has not made public how much more funding the company is seeking. It's bad news for the studio, bad news for the state, and bad news for any fans still looking forward to the possibility of Project Copernicus in the future.

[Update: Joystiq reports that "it appears 38 Studios put up all present and future IP by the company as collateral," meaning that if the studio defaults, the state of Rhode Island will own all of its game assets. We've tucked some of the ensuing news coverage in the video behind the break.]

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Travel back two years to when Cheyenne Mountain Entertainment was filing for bankruptcy and (unsuccessfully) attempting to sever ties with Gary Whiting, Chairman and CEO of the company. Stargate fans watched as their hopes for an MMO were dashed.

Fast forward to present day, when Stargate Worlds appears back in the news. Unfortunately for fans, it has nothing to do with offering a sliver of hope that the game itself might also revive; instead, more lawsuits are being filed against Whiting and other Cheyenne employees.

The newest lawsuit filed in Arizona includes 17 plaintiffs who accuse Whiting of misleading investors in various ways to obtain their cash. Some of the allegations leveled at Whiting include "negligent misrepresentation, breach of fiduciary duty, common-law fraud and securities fraud"; he's also accused of issuing loans to himself from the company's funds -- money that may still be in Whiting's possession, according to Cheyenne Mountain's court-appointed receiver, Keith Bierman of Phoenix-based MCA Financial Group.

What's in a name? Quite a lot, as it turns out. A name alone was enough to send Blizzard and Valve to man the lawyer cannons over two upcoming games, DOTA 2 from Valve and Blizzard DOTA from Blizzard. The companies have reached an agreement, however, which includes Blizzard renaming its game to Blizzard All-Stars while retaining use of the "dota" name for noncommercial use in the fan community. Valve retains the commercial use of the name.

It sounds like a little matter until you remember that Warcraft III was the source of the map that spawned this game type, leading to both companies developing competing versions of a sequel. Blizzard All-Stars currently has no release date, while DOTA 2 is due out sometime next year and is currently in beta testing. Luckily, the terminology is only being changed on the corporate side, meaning players are free to continue discussing the games as they would have anyway.

En Masse Entertainment has issued a response to yesterday's developments in the long-running NCsoft vs. Bluehole Studio legal drama.

A posting on the official TERA blog says that the upcoming action MMO will launch as scheduled on May 1st despite "baseless accusations" and "unfounded rumors" regarding the theft of Lineage III assets by former Bluehole employees in Korea.

The piece states that "after extensive Korean proceedings, Bluehole Studio was not found to have made any use of any NCsoft trade secrets in the form of source code or game design." It also notes that NCsoft product performance has suffered since TERA's Korean launch more than a year ago.

Multiple news sites are reporting a verdict in the long-running NCsoft vs. Bluehole Studio litigation regarding stolen Lineage III assets. According to the sites, the Korean Supreme Court has confirmed the guilty verdict in the criminal trial originally reached in 2009. The body also doled out "tougher punishment" in the form of prison time and probation for a former Lineage III department head and a team manager.

ThisIsGame.com points out that there could be more bad news coming for the team that turned Lineage III assets into TERA, as the outcome of a $5.7 million civil suit is still pending.

MMO Culture has published a timeline of the TERA legal proceedings, though neither website cites a source for its information. We'll update the story with more details as they become available.

While we heard about Sony Online Entertainment's partnership with ProSiebenSat.1 Games Group to publish MMOs in Europe last month, the specific details of this deal were lurking under a cloud cover of mystery and speculation -- until now. SOE has posted a quite lengthy FAQ about this partnership and what it entails for the future of the studio in the Old World.

According to the deal, ProSiebenSat.1 has the license to officially publish eight of SOE's titles in 40 countries. These MMOs include DC Universe Online, EverQuest II, Free Realms, PlanetSide 2, and EverQuest Next (although not, oddly enough, EverQuest itself). SOE hopes that ProSiebenSat.1's location and expertise will result in in a greater audience for its games as well as more support and better localization for those under ProSiebenSat.1's umbrella. SOE even hopes that the partnership will result in "special content" for European players.

Previously, SOE had distribution agreements for Europe but nothing on the scale of what it now has with ProSiebenSat.1. It looks like EU players will need to transfer their accounts and characters over to ProSiebenSat.1's domain, although SOE promises that this will be an easy process. It's also important to note that these games and their servers will not interact with their North American counterparts, effectively separating the communities.