Kingdoms of Amalur: Reckoning Missed 38 Studios’ Sales Expectations

WPRI is reporting that, based on what 38 Studios’ chief financial officer Richard Wester and president and chief operating officer William Thomas said during a hearing at a Delaware courthouse, Kingdoms of Amalur: Reckoning missed the studio’s own financial forecast, despite surpassing EA’s own more conservative estimates. Additionally, the game would have needed to sell at least 2 million copies to bring the company any money.

Quoting from the article:

Wester said 38 Studios received no cash from sales of its first game, “Kingdoms of Amalur: Reckoning,” which was released in February, because the company had to repay $28.7 million advanced by distributor Electronic Arts to fund the game’s development. 38 Studios gets 30% of “Reckoning” royalties and EA gets the remaining 70% under the terms of their deal.

Wester estimated “Reckoning” has sold 1.3 million copies so far, which he said failed to meet 38 Studios’ internal projections even though it beat Electronic Arts’ more conservative forecast. Each copy sold for an average of about $50, and the company spent $30 million developing the game over 30 months, Thomas said.

“I don’t believe the company would see any more cash” from future sales of “Reckoning,” Wester said. “If it gets up around 2 million, then I think you’re at a point where [38 Studios] potentially will start to see some cash come in.” Most games achieve 80% of their all-time sales during their first three months on the market, Thomas added.

The executives’ comments shed more light on why Gov. Lincoln Chafee told reporters the first game had been “a flop,” a comment that Schilling tried to rebut by saying the game surpassed Electronic Arts’ expectations.

The article goes on transcribing Thomas’ account of the studio’s financial troubles, which essentially seem to mirror Schilling’s own version, so I’m not going to copy them, but all in all the impression I get is that 38 Studios’ executives had extremely unrealistic expectations about the business they were running. Whether that’s true or not, however, it’s extremely sad to see how the employees working for the company had to pay the way they did.

Thanks Develop.