38 Studios has been through a lot over these past 3 weeks. After failing to make a payment to the state of Rhode Island on May 1st, it was looking like the company might be unable to recover from the mess it was in. You know you’re in trouble when you might end up having to shut down and force an entire state to pay off a $75 million loan. The company managed to scrap up the $1.125 million needed to make the late payment, but that doesn’t mean 38 Studios is out of the storm yet.

When the company failed to make payroll last week, the company went ahead and told their temporary and contract employees that they no longer had jobs at 38 Studios anymore. Now it appears that they are firing more people,  according to Rhode Island’s Governor Lincoln Chafee. When you consider that 38 Studios was lured to Rhode Island from Massachusetts in an attempt to create more jobs, you can see that there is a problem here.

At this time, there is no news about how many employees will be let go. It’s a shame that a company has to let go of people in these tough economic times, but sometimes that’s what needs to be done. With that being said, however, I don’t see 38 Studios being around in a year, or even 6 months. While another company could buy out 38 Studios and gain their IPs, with the $75 million loan that the company has hanging over its head I don’t see that likely. Instead, the taxpayers of Rhode Island are going to be stuck with the burden, and I wouldn’t be surprised if this fiasco turns up in the election come November.

Things keep looking worse and worst for Curt Schilling’s 38 Studios. After failing to make a $1.125 million payment earlier this month, it now turns out that the company can’t even pay for it’s 400 some-odd employees who work there. According to a source talking with Joystiq, not only were they unable to make payroll this week, but they also let go all temporary workers and contractors.

The company was lured to Rhode Island in 2010 as part of an effort by the state to attract more jobs. It was considered a risky move by R.I., attracting a fledgling video game company with promises of a $75 million bond, but at the time it was deemed that the rewards would more than make up for the risk. It’s looking like the rewards won’t be following, however, and the state will be on the hook to pay off the $75 million bond plus interest until 2020 if the company flounders. This debacle has already cost one man his job: head of the REIDC Keith Stokes, who approved the loan in 2010 resigned Wednesday night.

The company did try to make the overdue $1.125 million payment, but after the company’s CFO informed the EDC that there were insufficient funds to cover it, the check was returned. There is one slight positive to this whole mess, however. If the company were to collapse, Rhode Island will gain possession of any and all of 38 Studios’ IP’s. However, at this time the only game produced by the company was Kingdoms of Amalur: Reckoning, and while it was a modest hit, it hasn’t exactly set any records. While the state could sell off the IP, it likely won’t be enough to recoup the more than $100 million it will have to pay for the loan.

One of the biggest stories in the gaming industry follows ex-Infinity Ward heads Jason West and Vince Zampella in their fight against Activision. In case you’re unaware, Activision tried firing the duo after some heat between them sparked. Now, some time after the initial event, West and Zampella are seeking out a hefty amount of cash in paid damages. They’re asking for one billion dollars to be exact.

One billion dollars. Just say it, say that number over and over again three good times. That’s a lot of money. Notes on the amount were spotted once the publisher released a financial filing which the SEC picked up on. In the text, it states:

“After concluding an internal human resources inquiry into breaches of contract and insubordination by two senior employees at Infinity Ward, the Company terminated its employment of Jason West and Vince Zampella on March 1, 2010.

On March 3, 2010, West and Zampella filed a complaint against the Company in Los Angeles Superior Court for breach of contract and wrongful termination, among other claims. In their complaint, West and Zampella alleged damages, including punitive damages, in excess of $36 million, an amount they have since significantly increased during discovery to over $1 billion, as well as declaratory relief.

On April 9, 2010, the Company filed a cross complaint against West and Zampella, asserting claims for breach of contract and fiduciary duty, among other claims. The Company is seeking damages and declaratory relief.”

This case will set out before judges on May 29^th and that’s not far off. Just recently there was some news regarding an accusation of Activision making attempts to hack into West and Zampella’s company email, which isn’t looking too good. Word is that Activision even conjured up the idea of faking a fire drill to get everyone out of the building so they could send someone in to crack the codes on the duo’s computers. If this is true, Activision really has some things to answer to. We’ll see what happens when the case goes to court.

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After failing to make a scheduled 1.1 million dollar payment to the Economic Development Corp. on May 1st, 38 Studios may be in some deep trouble. Curt Schilling, the former Red Sox pitcher who founded the company in 2006 as Green Monster Games, had an emergency meeting with Rhode Island state officials to ask for help to keep the company afloat. If the company were to default on a $75 million loan that it took out after being lured to Rhode Island from Massachusetts, Rhode Island and its tax payers would be stuck having to pay off the remainder of the loan until 2020.

“How do we avoid throwing good money after bad?” That was the question posed by the Governor Lincoln Chafee, as they look for a way to keep 38 Studios from defaulting on its loan. If the state feels that the company can still be viable, they can pay off $1,125,000 guaranty fee that is past due. However, in these trying economic times, and with it being an election year, that just might be the kind of spending that will make a politician hesitate from pulling the trigger.

Something else that might affect 38 Studios’ chances is the fact that the company has been around for 6 years and only in the last 3 months has it released a single video game. While an established company like Blizzard can get away with releasing a game every year or 2, a company that doesn’t have a name for itself can’t afford to sit around developing one game at a time while money is pouring out. But, the state can’t just go ahead and let itself be stuck with $75+ million in debt, either. I wouldn’t be to surprised to see some sort of middle ground being reached.

When the European branch of GAME was going through difficulties earlier this year, many fans were disappointed by the fact that the store wasn’t able to carry any of the hot games that they had pre-ordered. Now, it looks like it’s Australia’s turn, as the Australian branch of GAME entered into administration this week. That is, it entered administration right before the launch of what might be the biggest game of the year, Diablo III.

I can’t imagine the rage that a person might be feeling right now had I pre-ordered my copy of Diablo III from GAME. Not only will they be unable to receive their copy of the game, but they can’t even receive a refund for the deposit in any way, shape, or form. In other words, that money is gone, and it’s not coming back any time soon.

For those Australian fans affected by this, there’s really nothing you can do, unless you paid for the pre-order with a credit card, in which case you can then dispute the charge and hopefully get the money back. For everyone else, they’ll have to merely wait, as according to Kotaku, the people who have pre-orders have become “unsecured creditors”. However, they are on the bottom of the list when it comes to which creditors get paid first, so don’t hold your breath. Don’t throw out your receipt of your pre-order however, because it’s possible that once GAME Australia comes out of administration they may decide to honor the pre-orders again. Who knows?

When most companies have a disagreement with another company, you can bet that the legal system will be involved. That’s what happened when Blizzard Entertainment decided to file an injunction with the US trademark office to block Valve from using the term DOTA. However, what ended up happening is a bit surprising, and I think shows just how level-headed some companies cane be even in trying times.

DOTA, for those of you who don’t know, is Defense of the Ancients. It was a fan-made custom map created for the game Warcraft III back in 2003. It quickly took off as one of the hottest mods on the planet, and has spawned DOTA clones like League of Legends and Heroes of Newerth. Valve decided to get in on the action when they announced that they were going to team up with top DOTA developers and develop DOTA 2 as a standalone game. Blizzard decided to create its own DOTA game for StarCraft II, called Blizzard DOTA, and filed paperwork with the US trademark office to block Valve from using the term DOTA. After all, Blizzard felt that since DOTA was first developed and released for Warcraft III, the term should belong to Blizzard since the term DOTA implies a Blizzard game.

Perhaps not wanting to be involved in a protracted legal battle, Blizzard and Valve met and decided that it was in both parties interest to have the matter settled quickly. Blizzard agreed to drop the DOTA claim, and will be allowed to use the term for non-commercial purposes for Warcraft III and StarCraft II maps. They have since renamed Blizzard DOTA to Blizzard All-Stars, which as Blizzard’s Rob Pardo claimed, “better reflects the design of our game.” Valve will still be allowed to use DOTA 2, and can use the term commercially as well.

At the end of the day, Blizzard and Valve realized they were stuck in a petty squabble, and decided to end it. While Blizzard may or may not have had a claim, the fact is that there wouldn’t be much gained if Blizzard was awarded the DOTA trademark. All it would do is alienate fans as one game or another was delayed because of some trademark infringement, and neither company wanted to see that happen. In other words, both companies grew up, and decided to be adults about the situation and come to a compromise. If only we could see more companies do this, the world would be a better place.

Three weeks ago, it was reported that EA was going to lay off a significant percentage of their employees. EA denied the rumors, saying that “EA is growing and looking to hire hundreds of people”. Well, this might not come as a shock to you, but turns out EA was lying.

EA will be “restructuring” the company, which will cause an unspecified number of employees to be laid off. It’s part of EA’s CEO John Riccitello’s plan to use social media to help predict the future gaming trends, thanks to data mining.  In an interview with NPR.org, he had said that the company’s internal statistics will see a shift from one of eight employees being an engineer to one in two.

It doesn’t appear that this layoff is solely about cutting costs. EA is expecting to grow its numbers of employees by the end of the year, which means that the people being laid off are being laid off because they lack certain skills that EA needs. It’s sad to see people losing their jobs in such a way, but if a company wants to change the way it does business, it needs to be willing to drop the tools it doesn’t need and pick up the tools it does. Here’s hoping that the people who will lose their jobs will find something new soon.

EA is looking to use Nexon’s servers and developers for the game in Asia. They want to use Nexon’s expertise in getting people to buy downloadable content and use it to get people to spend their money on things like team jerseys and player experience points. In other words, EA is looking for Nexon to be the distributor of FIFA in Asia.

This makes quite a bit more sense than a merger. Nexon deals more in the free gaming industry, where a person can play a game for free, but if they want to get more enjoyment out of the game, they can purchase different virtual add-ons to customize their character. If they bought EA, I would see that there would be a clash of cultures and philosophies, and it would be a rocky marriage from the start. If you’re one of those people who were wishing to see EA bought out by another company, however, I’m afraid you’ll have to keep waiting.

THQ has announced that they won’t be manning a booth this year at E3. This is slightly disappointing, considering how any big gaming company wants to make a memorable splash at E3, but when you consider THQ’s dire financial straits, it’s no surprise that they are seeking a more limited role this year. It’s pretty hard to lay off hundreds of employees, and even cut the CEO’s salary in half, and still be able to justify spending up to a million bucks on a massive booth.

While THQ may not have a booth, they do plan on being there. A spokesperson for THQ had this to say to GamesIndustry International: “We’re not producing a booth, but we will be participating in E3. We will be showing games to the E3 judges at their event coming up, and we’ll be hosting a press and business center at the show for meetings (as well as participating with first party activities).”

If you don’t know exactly what that means, I’ll tell you. Instead of spending a large amount of money on a booth, THQ is going to instead have a private conference room for people to book meetings with THQ if they so choose. So yes, it’s not going to be quite as flashy as in the past, but sometimes, you need to do what you need to do. THQ may be in a bit of a slump right now, but with their stock prices starting to rise a little bit, it might not be too long until we see another grand booth by the publisher.

After hitting an all-time low of $0.45 on April 17th, THQ’s stock prices closed at $0.67. While that is still below the threshold needed to keep the beleaguered publisher from being delisted, it’s certainly showing an upward trend for a company that desperately needs it. To totally avoid delisting, THQ needs to have its stock price stay above the $0.99 mark for ten consecutive days by July 23rd.

The company had earlier estimated that its sales would be between $130 million and $150 million. However, after strong sales of Saints Row: The Third, THQ is anticipating that its non-GAAP sales will be between $160 million and $170 million. Not bad for a company that some people were thinking would not be around by the end of the year

To help pull them above the water, so to speak, THQ is pushing ahead with its 17 game rescue plan. Some of the games in that plan include Darksiders II, South Park: The Game, and Homefront 2. Here’s hoping that THQ can finally find its stride and put itself back on top!