38 Studios collapse would put Rhode Island taxpayers on $112.6m hook

The potential collapse of Rhode Island-based MMO developer 38 Studios could force state taxpayers into repaying private investors $112.6m through 2020.

WPRI reports that the Rhode Island Economic Development Corporation borrowed $75m for 38 Studios from private investors with interest rates between 6 and 7.75 per cent. The developer was supposed to repay the loans through the sale of its games.

Kingdoms of Amalur: Reckoning, from subsidiary Big Huge Games, is the only title to be released by the studio to date. Their MMO Copernicus is still in the works, but a release window has yet to be provided.

If the developer does collapse, the Rhode Island governor will ask the General Assembly to repay bondholders. The scenario could spell disaster for an industry in search of general tax breaks, specifically those in other US states seeking the financial help.

Rhode Island politicians and 38 Studios’ management are currently working to keep the studio ‘solvent,’ but beyond that there is no word coming from either group at the moment.