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Intellectual property value of 38 Studios put around $20M

May 23, 2012

One of the many lingering questions about 38 Studios is how much Rhode Island might be able to recoup through company assets if the video game maker goes bust. This story in Joystiq offers some hints:

The value of 38 Studios’ Amalur intellectual property is estimated to be in the range of $20 million. We asked Wedbush Securities analyst Michael Pachter for his valuation following confirmation of layoffs at the studio and coverage of 38 Studios employees flocking to Turbine’s recruitment drive in Providence last night.

“Nobody is buying MMOs after Star Wars fizzled. I think value is low, probably $20 million or so,” Pachter said. “There is just no demand for game assets right now, as THQ proved when it tried to sell the Warhammer MMO. I think [Electronic Arts] could step in, since they are the publisher, so you might see some alternative way to get 38 some bridge financing.”

Electronic Arts had been the publisher on the Big Huge Games developed Kingdoms of Amalur: Reckoning, but has yet to confirm it would publish 38 Studios’ “Project Copernicus.”

Rhode Island taxpayers would be on the hook for more than $100 million, considering principal and interest on 38 Studios’ guaranteed $75 million loan, if the company goes out of business. So under the scenario presented by Joystiq, just 20 percent of that amount could be recouped. 

The outlook for 38 Studios remains uncertain amid reports of layoffs and the company’s inability to make payroll last week.

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