June 10 2012
Although failures are to be expected in the highly competitive game industry, it's always unfortunate to see a game developer close up shop and layoff all their staff. Such was the case at Curt Schilling's 38 Studios last month, and it means that we'll never get to play the MMORPG they dreamt of building, codenamed Copernicus. Curiously, just before the end we received a glimpse of what we'll be missing as 38 Studios released a video showing a flythrough of the world.
Naturally, there has been a lot of speculation about what went wrong at 38 Studios, particularly since the company received a $75 million loan guarantee from the State of Rhode Island in return for relocating there. With such large sums of money involved, it's hard to imagine that mismanagement didn't play some role, although many of the former staff still appear to stand behind the central figures behind the company (Curt Schilling, industry vet Todd McFarlane, and writer R.A. Salvatore). No doubt, government loan guarantees often come with political baggage, and they're great fodder for election campaigns, which certainly may have played a part in the closure of 38 Studios.
One thing that does seem clear is that if a project requires a continual influx of new funding to reach completion, it's in serious trouble. I can't really imagine undertaking the development of a game that costs tens of millions of dollars not knowing whether I'm going to run out of money a few million shy of finishing it. However, we rarely get the full picture in these situations, and if their single-player RPG Kingdoms of Amalur had sold better, this story might have ended very differently.
Of course, that same week layoffs were also taking place at EA/Bioware, developer of Star Wars: The Old Republic. I wouldn't call the game a failure, but it hasn't been a slam dunk either. This has led some people to conclude that the MMOG industry is turning a corner, and we are witnessing the end of big-budget subscription-based titles. It certainly seems likely that some of this will spook investors, at least in the short run.
In fact, the entire video game industry is experiencing major growing pains right now. Mobile devices are beginning to tread in game console territory, distribution is going digital, revenue models are changing, and the audience, while larger than ever, also has more games than ever to choose from. At the same time, expectations have soared to such heights that it's hard to imagine any game fulfilling them.
Nevertheless, some developers do seem to be getting it right. Rift appears to be doing quite well, having recently revealed the first expansion for the game, and it's a safe bet that Blizzard will make money on the Mists of Pandaria expansion for World of Warcraft. While Guild Wars 2 uses a different revenue model, it seems almost certain to be a financial success.
I suspect that it's a little early to erect a tombstone for big-budget MMORPGs, although it may be a few years before we see such spectacular sums risked on a game in this genre. Blizzard certainly has the resources and the talent to shake things up. They've been quietly working on a project called Titan, and while we know very little about it at this stage, it shouldn't be underestimated. Of course, it takes the right game at the right time to have WoW-like success, and it's anyone's guess where that might come from. The way I see it, if Minecraft is possible, just about anything is possible.