Putting the headline-grabbing drama aside, I think it's useful to look at the mistakes that the company made. I'm sure Harvard Business School will have a field day with this whole episode, inserting case studies into its curriculum as soon as it can get them off the presses, and with good reason. There's definitely some lessons to be learned here. Let's examine them one by one.
Don't attack an entrenched market leader with a nearly identical product. Although we'll never know for sure as it was never shown to the press, it's difficult to envision Copernicus being anything but an extremely well-done clone of World of Warcraft. Company founder Curt Schilling is an admitted WoW fanatic, so putting him in the driver's seat of what was surely intended to be his "perfect game" would probably result in something akin to what he already considers to be near-perfect: World of Warcraft. The problem with this approach is that you can't out-WoW WoW, just like Google Plus can't out-Facebook Facebook. MMO after MMO has tried to clone WoW and its achievements, with results ranging from moderate success (Star Wars: The Old Republic) to relative failure (Warhammer Online: Age of Reckoning). If there isn't a big differentiation between your product and the top dog, gamers aren't going to migrate.
Start small. Blizzard didn't get to where it is overnight. In fact, it took more than a decade for it to reach its current pinnacle. It started as a three-man operation doing ports of existing titles, eventually finding success on the SNES before moving on to the breakout PC title Warcraft: Orcs & Humans. id Software started much the same way, as have many other successful game companies. While I admire 38 Studios' swinging for the fences, they would have been much smarter to start off with a more modest single-player game instead of a gigantic MMO (Kingdoms of Amalur: Reckoning doesn't count, as the MMO studio didn't create it). Instead, they bet the farm on a game genre subject to development cost overruns, significant ongoing operational costs, and a vocal, unforgiving playerbase with a voracious appetite for new content. While 38 proved that, given enough money, you can throw enough people in a room to make a top-flight MMO take shape, what you can't buy is the ability to execute on such an endeavor in a cost-efficient manner. That can only be bought with significant time investment and a team that grows together.
Hire Young and Cheap. The most successful game companies hire young and hungry coders, artists, and designers, letting them grow along with the company. Then, once the greenhorns have matured into veterans, they bring in the next generation to create a potent mix of youthful ambition and experienced leadership. This allows an organization to get the best bang for their buck in terms of staff, while also resulting in a team that really loves the company they work for, since they "grew up" with it. One of 38's big mistakes was going out and hiring a virtual who's who of staff from the MMO industry, along with top-shelf creative folks like Todd MacFarlane and R.A. Salvatore. While this looks good on paper, it costs a ton of money, and may not necessarily result in the product being any better than what's already out there. If you hire the audio designer from this game, the UI designer from that game, and the combat designer from the other game, chances are your game is going to look like a combination of all of those games (that are already on the market). Sometimes it's best to roll the dice on new blood with new ideas, instead of going after industry veterans to the exclusion of anyone else.
Involve the press as early as you can. 38 Studios' top PR priority over the last year was getting the hype train rolling for Kingdoms of Amalur: Reckoning, with good reason. It was their first release as a company, and was thus critical to their establishment of a foothold in the industry. However, there was nothing but years of baffling radio silence surrounding Project Copernicus. The first video of the game wasn't released until May 18th 2012, weeks after the faltering company had missed its May 1st loan payment to the state of Rhode Island. R.A. Salvatore later claimed that the game was deep into its development process. If that was the case, why wasn't the press shown anything but screenshots? The public can't miss what they don't know about, and can't rally around a project that they've never had a chance to get attached to. Copernicus has now vanished, but nobody is going to miss it...because it was never really there to begin with.
Never take public money. There is no better way to turn the whole world against your company than to accept, and then squander, taxpayer dollars. The game industry is volatile; companies are bought and sold at a steady clip, employees are laid off constantly, and a significant number of game studios shut their doors each year. These events matter little to the average taxpayer, as game developers are typically small and private, or large and publicly-traded, just like any other company in the entertainment industry. What they are not, however, is funded by public money. Sure, some may get tax credits from certain states, but the kiss of death for 38 Studios was the fact that it became a government-subsidized business thanks to its $75 million state loan. This made every man, woman, and child in the state of Rhode Island financially liable for the failure of the company, regardless of whether or not they even knew it existed. There's no easier way to have an entire state's population hating you than to pull money directly out of their pockets for no reason other than your company's inability to stay solvent.
The 38 Studios story isn't done yet, as the developer has yet to officially declare bankruptcy. But given the fact that it laid off all of its employees on May 24th, even a best-case scenario - in which it secures private equity and is able to continue operations - leaves the company in dire straits. The original group of employees would be impossible to reassemble, with many already in the process of moving on to more stable companies in the area, or some even moving out of New England entirely.
Furthermore, even if Project Copernicus was to be finished and released, it would be viewed as damaged goods by the gaming public. MMOs face an uphill battle in the best of circumstances, with much of a new release's early traction riding on the perception - good or ill - that players have in regards to its long-term prospects. Because MMOs require such a massive time investment on the part of players, they are often hesitant to involve themselves in a title that they consider to be a lame duck. With 38 Studios' history of instability, gamers will be rightfully skeptical of its ability to keep a modern MMO operational and updated with content. In short, the industry will expect it to fail, and as a result most gamers won't touch it with a ten-foot-pole.
The fall of 38 Studios only further proves that you can't buy your way to a successful video game company. No amount of money can make lightning strike. It takes a lot of hard work, ruthless money management, excellent timing, and a great deal of luck.
At least 38 Studios can say that they worked hard.
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