If 38 Studios Goes Under Taxpayer Will Owe $112.6 Million
Some news came out that 38 Studios is in a lot of trouble right now and is on the verge of closing down. As much as that really does suck, it seems that if the developer closes it’s doors there will be a bigger problem for the taxpayers of Rhode Island.
WPRI has reported that if 38 Studios can not pay the bonds it received from the state the taxpayers will be left responsible for paying $112.6 Million from now until 2020.
This is how the numbers crunch, The Rhode Island Economic Development Corporation borrowed $75 million from private investors for 38 Studios, at interest rates between 6 – 7.75 percent, with the expectation that 38 Studios would pay it back with the sale of games. As it stands, 38 Studios has only launched one game, which is Kingdoms of Amalur: Reckoning, which they got with the acquisition of Big Huge Games.
“If 38 Studios can’t pay, the governor is required to ask the General Assembly to repay bondholders.”
If 38 Studios does go under, this could make it much more difficult for other game companies that try to get tax breaks in other states. Also and more importantly what this could mean for the taxpayers in Rhode Island. This is much bigger than just another developer closing down.