On Wednesday, May 16, the RIEDC held an emergency session with 38 Studios, which Curt Schilling attended. Neither the RIEDC nor the studio announced any clear outcomes from the meeting.

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On Thursday, May 17, 38 Studios' chief financial officer hand-delivered a check for the $1.125 million to the RI EDC offices. However, within the hour state officials discovered insufficient funds in the account to draw on, and they returned the check.

On Friday, May 18 (today), 38 Studios successfully delivered the $1.125 million to the RIEDC—$1.025 million from the studio's account, and the remaining $100,000 via a personal check. However, in order to make the payment to the state, the company apparently stiffed their staff. 38 Studios failed to make payroll today, which bodes very ill indeed.

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Didn't I read something about Schilling being against government interventions in business?

Yes, yes, you did, and local media in New England are particularly angry about that. Just today, Boston Globe columnist Brian McGrory wasted no words in an editorial about the hypocrisy inherent in a "small government," "free markets" millionaire taking $75 million from the state to fund his highly risky pet project.

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Is there anything about this that isn't a mess?

Nope. The head of the RIEDC has already resigned, and yesterday Joystiq reported that various executives' profiles kept mysteriously appearing and disappearing from 38 Studios' website. It seems likely that some corporate "reorganization" is in order.

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So what happens next?

Well, that's the $75 million question, isn't it?

38 Studios is apparently still hard at work on Project Copernicus. Although until today roughly nothing had ever been seen of the MMO project, studio representatives told Chafee (who then told the press) that launch is slated for June, 2013. 38 Studios released the first footage of the game a few hours later. It is theoretically possible that at this time next year, 38 Studios will be successfully launching their game and will successfully repay the state from the revenue.

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Sure, "theoretically." But realistically, what's likely to happen to the RI taxpayers?

MMORPG development is notoriously risky, and it's a pretty crowded market. The signs do not look promising.

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Thanks to the way bonds and compound interest work, meanwhile, if 38 Studios ultimately defaults, the state will have to make up for far more than $75 million. WPRI crunched the numbers, and found that the taxpayers of Rhode Island could be on the hook for over $112 million by the year 2020.

38 Studios did put the Kingdoms of Amalur and Project Copernicus intellectual property up to the state as collateral, according to Joystiq, which means that should they default the state might be able to recoup some money by selling the IP to another developer or publisher—if anyone wanted to buy it.

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This doesn't sound like it will have a happy ending.

38 Studios may have gotten footage of Project Copernicus out today, but we still know effectively nothing about the game. Either they're keeping everything very tightly under wraps, or they just don't have much to share.

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Meanwhile, PR for Boston-area MMORPG developer Turbine (Lord of the Rings Online, Dungeons and Dragons Online) reached out to us earlier today to announce a large recruiting event in Providence this coming Tuesday. It's clear they hope to snap up staff who are currently in the area working on Project Copernicus.

Given that so far, Turbine always pays their programmers, they may well find a few folks willing to jump ship. And sending developers running back to Massachusetts may be the most sadly ironic outcome of all.

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UPDATE: On May 24, 38 Studios shuttered Big Huge Games and laid off the entire staff of 38. In a press conference that took place shortly after the layoffs were announced, governor Chafee told press that the state was unaware the studio would be dismissing staff, and that Amalur would have needed to sell 3 million copies to break even.

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