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38 Studios seeking additional state funding

by Steve Watts, shacknews.com, May 16, 2012 3:00PM PDT

Kingdoms of Amalur: Reckoning developer 38 Studios is requesting additional assistance from its home state of Rhode Island, following reports that the company was meeting with officials to discuss its $75 million loan guarantee. The Rhode Island Economic Development Corporation didn't take action yet, and is reportedly still deciding whether to help the company.

Local station WPRI reports that the company could still pay off its overdue payment of $1.125 million, which was due to the EDC on May 1. So far the company has received $49.8 million of the $75 million loan.

Governor Lincoln Chafee says the question is "how do we avoid throwing good money after bad?" He says that while he was initially opposed to the EDC loan, he is now on the company's side since taxpayer money is at risk. "Well we had a very generous proposal that 38 Studios took advantage of," he said. "Now we're in some difficulty with that. Very generous proposal."

Now the EDC board is set to meet again on Monday, while continuing to talk to 38 Studios in the meantime for more information. Exactly what form the state help could take isn't clear, but House Speaker Gordon Fox suggested the possibility of state tax credits.

The rub lies in drumming up more money to pay back the loan, though, which would probably mean selling another product. 38 Studios has been quiet on its next project, codenamed "Copernicus," and Chafee says he doesn't know if the title is on-schedule.