Kingdoms of Amalur developer unable to pay staff

All temps and contractors laid off, says source.

It seems Kingdoms of Amalur developer 38 Studios' problems are escalating following recent loan negotiations, with news today that it's not been able to pay staff this week.

A spokesperson for the Rhode Island Economic Development Corporation - which initially funded the studio - confirmed the news to local media outlet WRPI. 38 is apparently in the process of meeting an overdue repayment to the RIEDC for $1.125 million, which appears to be the cause of its inability to meet payroll commitments.

It's not known exactly how many are affected, though bond documents show that as of 15th March this year, the studio had 379 full time employees.

Meanwhile, a source close to Joystiq has claimed that the studio, run by former pro baseballer Curt Schilling, has laid off all temporary staff and contractors.

The RIEDC met yesterday to decide whether to take further steps to keep the company solvent. No firm decision was made, and it will meet again on Monday.

However, the head of the RIEDC, Keith Stokes, who approved a $75 million loan to 38 Studios back in 2010, has now resigned his post.

If the the developer does go out of business, it will fall on Rhode Island tax payers to stump up for the loan shortfall. That said, it will then own the studio's IP, which it will be able to auction off.

Kingdoms of Amalur was 38 Studios' debut release. Full lifetime sales haven't been made public, though we do know that it has moved 410,000 copies in the US since launch earlier this year.

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