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Reckoning dev lays off entire staff - Report

[UPDATE]: Source says beleaguered 38 Studios and Big Huge Games sent out pink slips to all employees, believed to number close to 400. Rhode Island governor calls Kingdoms of Amalur a "failure."

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It appears 38 Studios and its subsidiary Big Huge Games are no more. The Verge and Joystiq heard from sources today that all employees at Curt Schilling's Providence, Rhode Island-based and Maryland-based development studios have been let go. The company put out just one game in its lifetime, February's well-received role-playing game Kingdoms of Amalur: Reckoning.

All 38 Studios staffers are out of work, according to the report.
All 38 Studios staffers are out of work, according to the report.

38 Studios employed 379 employees full-time as of mid-March, according to a report from last week. Employees at the company had not been paid since May 1 and lost health care benefits today, according to Joystiq. As of press time, 38 Studios had not responded to GameSpot's request for comment on the matter.

Troubles at 38 Studios first came to light earlier this month, when reports from the Rhode Island government indicated that the company had failed to make a $1.125 million loan payment to the state's Economic Development Corporation. The studio eventually made the payment, but it also enacted a round of unspecified layoffs. The company's CEO, Jen MacLean, left the studio in March, with senior vice president of product development John Blakely heading out just this month.

The fate of 38 Studios' massively multiplayer online role-playing game Project Copernicus is unknown. Rhode Island governor Lincoln Chafee recently revealed the title was being readied to ship in June 2013. If 38 Studios decides to sell its Amalur intellectual property, it can expect to get $20 million for it, according to one industry analyst.

38 Studios purchased Big Huge Games from THQ in 2009. It is unclear what will happen to the Kingdoms of Amalur: Reckoning sequel that Schilling confirmed was in the works earlier this year. The original sold 1.2 million copies during its first 90 days, outperforming publisher Electronic Arts' estimates, according to Schilling.

[UPDATE]: In a press conference this afternoon, Governor Chafee explained that the state had not been informed of the pending layoff of 38 Studios' entire staff. In explaining how the studio hit the skids seemingly overnight, Chafee explained, "The game failed. The game failed." He added that Kingdoms of Amalur: Reckoning would have needed to sell 3 million copies just to break even.

Additionally, Rhode Island's WPRI has a copy of the mass layoff email that was sent to 38 Studios employees. It reads:

The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.

Got a news tip or want to contact us directly? Email news@gamespot.com

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egger7577

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Edited By egger7577

I don't understand why the Governor is involved in any of this?

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AntwanMedia

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Edited By AntwanMedia

@egger7577 The state lent them $75 million therefore if they fold the intellectual property of Amalur falls to the Governor and the people of Rhode Island.

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nsfn

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Edited By nsfn

@AntwanMedia @egger7577 1 million people in Rhode Island so, lets see here: 75/1 = 75. I'd say that's a pretty gouging price but hey "Power to the People" lol

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rcarp711

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Edited By rcarp711

@nsfn @AntwanMedia @egger7577 Add to that the fact that many of those residents also paid $60 for the retail game. /ouch

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AntwanMedia

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Edited By AntwanMedia

With most of the world under-going financial turmoil... a £45 ($60) price tag is ludicrous. All it means is less money for the developers at the end of the day.

Most people can't afford to shell out on new games every week and it's causing a ripple effect that we've been watching for a good while.

The reason why COD Sells well is because people know they'll get their monies worth out of the multiplayer and they'll make that their main purchase for the year. I don't like the COD games but don't blame people for going down that route.

There's too much downloadable content, game pricing is getting higher each year and people don't have the money to keep up with the industry. Companies are unwilling to bend on pricing so all we're left with are closures, mergers and buy-outs.

As for the game I thought it was awesome, I loved it but it's time for companies to start taking stock of the issues and broaden their minds. $75 million on an untested IP is madness and it's obvious that the sales projections for it were insane too.

Good luck to the staff. I hope they get the money they are owed as the game was truly a labor of love. I hope they find work again soon.

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Lu_Shen

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Edited By Lu_Shen

I thought Kingdoms of Amalur was boring, but this is most unfortunate. They certainly didn't deserve this.

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Shadowsnake

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Edited By Shadowsnake

Since this was a RA Salvatore inspired game, I wonder how much $ went into his pocket. Really too bad I like the game itself, definitely pretty decent. I feel for the people that lost their jobs over it though, GL making it out there!

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gostrider373

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Edited By gostrider373

koa.r is hell alot of fun to play. its my number 2 fav game other then skyrim. cant believe this has happened :( i wish them all best of luck and hope they can get back somehow :/ im def gona miss them all.

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Andrew1073

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Edited By Andrew1073

I wish my cousin the best in finding a new job...sucks.

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megawavez

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Edited By megawavez

oppssss...

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Valen_Ca

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Edited By Valen_Ca

Sucks for the studio, the game was actually pretty fun, ok sure listening to Fae got annoying after a while but it was still a decent game.

EA will probably buy it, then we can kiss the Steam version goodbye, since for some reason EA doesn't believe that Steam and Origin versions of their games can co-exist.

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it009x9281

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Edited By it009x9281

I thought the game was hit too oh well sorry hear about more ppl losing there jobs:(

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--Rob--

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Edited By --Rob--

My sympathy to the actual workers... but Schilling can suck it.

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icym

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Edited By icym

My best to all the hardworking people out there. I hope you all land on your feet or get back on soon.

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b0sse

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Edited By b0sse

@Pyerun I agree.

Damn, another good studio shuts down =/

I still miss Team Bondi.

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Witchsight

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Edited By Witchsight

Brutal.

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kakotan

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Edited By kakotan

This is sad, it was such a wonderful world to play in , i hope they can find someway to pull back and get back to work and make more dlc and a new game, I love the story and the characters of this game, i let my brother borrow it and he loves it as well, I know I sound selfish and these ppl lost their jobs, but i hope they can all come back to work for 38 and 38 gets a grant or something or the government bails them out cause this is a great team and a great story dangit :( Dont want KoA to be another titanquest and never see another one like it cause IronLore is no more

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dengl

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Edited By dengl

@kakotan Then you didn't here about Grim Dawn by the makers of Titan Quest?

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Pyerun

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Edited By Pyerun

Any new IP has a very slim chance of selling 3 million copies so quickly. The game did not fail, greedy management owners failed.

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dlCHIEF58

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Edited By dlCHIEF58

@Pyerun

I don't think it was greedy management as opposed to slightly mismanaged. For one, they still have not received any proceeds form the initial sales of the game and DLC from EA yet according to Shilling. And the MMO development is expensive which I bet most of the money went (along with relocation costs which was the reason behind the loan that killed the studio). But it seems to me this RI governor wanted them to fail by his comments. For one, 1.2 million sold in a game is NOT a failure and it is unrealistic to think that 3 million sales would come from a new RPG IP that released in the same 4-6 month window as Dark Souls, Skyrim and Mass Effect 3. I am sure that neither EA nor 38 Studios expected that number for sales in the first few months either.

Too me it seems that the MMO was sucking more money than was planned and they weren't getting their proceeds for game sales quickly enough to counter-balance it. Just a story of an inexperienced developer that bit off a little more than they could chew.

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olgert56

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Edited By olgert56

Why don't they look at what other companies have been doing with their first games? How do they expect 3 million copies sold when the game has mediocre graphics and plays like an MMO? Not saying it's bad, but not outstanding enough for them to expect that much... It's simple research. I feel sorry for the employees but those in charge deserve it.

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fzd88

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Edited By fzd88

Pretty sad. The game was actually good...but not good enough to recover their 80million investment. Like others have said, that's too much $ to bet on a single, and first, IP. Needed something simple and low cost (maybe 5m tops and 1-2 year dev cycle with 30 people...not almost 400). Torchlight 1 is a good example.

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hunter8man

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Edited By hunter8man

Who the hell expects a new IP to sell 3 million copies of a game that really had no mass-marketing campaign behind it (aside from Shilling talking about it on Conan)? The only way that might happen is if it was released at a lower price point. I feel bad for the employees. They worked their butts off only to get royally screwed by the big-wigs. This is a prime example of why so many developers are hesitant to create new games, and it's a damn shame.

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bgranli

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Edited By bgranli

Something is very strange here.

You can't expect your first game, that is a new IP, to sell 3 million copies. You can hope, but you can't expect.

And you can't spend so much money on the project that you have to sell 3 million just to break even.

I feel sorry for the staff, but the morons running this charade...

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Darkeus

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Edited By Darkeus

@bgranli I agree, something is not exactly right here. There seems to be more to this than what has been reported.

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wwlettsome

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Edited By wwlettsome

@bgranli totally agree...seemed the game sold well but if they needed 3 million units to break even then they made serious miscalculations about the market potential and apparently their cost structure

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187umKILLAH

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Edited By 187umKILLAH

My thought's go out to those people who put all that time and effort into this great game only to lose their jobs, was so looking forward to another KoA game. Reckoning has the most enjoyable and addictive combat I've ever experienced in over 25 years of gaming, with its massive available loot, beautiful environment and other goodies it's far superior to the majority of overhyped garbage released this year.

However a grassroots effort has formed on Twitter in an attempt to help former employees of 38 Studios find new work at a variety of game companies with open positions

https://twitter.com/#!/search/%2338jobs

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oldschoolvandal

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Edited By oldschoolvandal

Sad...plain sad... Hope employees either are hired back by whoever buy KoA IP or find new opportunities somewhere else.

Here go my thoughts on what the problem with 38 Studios was:

- they've created a good game in many ways but not outstanding to seel the 3 million copies needed to break even.

- add to this math the fact that they needed to pay McFarlane & Salvatore royaties that I can very securely say were higher than the "normal" game artists and writers would ever see

- at the same time Curt Schilling was also expecting his return of investment (ROI) and taking money whenever possible (that's not bad....that's just how new business works)

- to finish it up KoA was their first title, so no previous games to provide any income to cover the development cycle costs, which is around two years of payments and investments with no return to speak of.

There you go....a huge structure to be kept working for 2 years (give or take) and you can easily see how 75 million were spent.

But back to the first thing I've said...sad, sad news for the gaming industry.

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kmne11528

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Edited By kmne11528

It costs so much to make games these days. Such a shame to see so many lose their jobs.

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ChrisX2012

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Edited By ChrisX2012

The problems nowadays is that it's sink or swim. Something doesn't seem right though... We may hear more on this at a later date. It would suck to work you @$$ off on a game, have it turn out decent and then have your company dismiss you like cannon fodder... This is too why I have given up on try'n to get into the gameing industry. Skyrim lead to there downfall or did it?

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Assimilat0r

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Edited By Assimilat0r

Kingdoms of Amalur is my favorite this year RPG.

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iPostMaReviews

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Edited By iPostMaReviews

Aaaannnd that's why I gave up on the idea of working in the game industry.

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marty2004

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Edited By marty2004

Sad...

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highlanderjim

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Edited By highlanderjim

never had a problem with this game, was far more enjoyable than the bland vanilla skyrim, kept me entertained till diablo3.

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TrueProphecy22

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Edited By TrueProphecy22

Strange world when a game that sells 1.2 million copies is a bankrupting failure...

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MugenAkagi

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Edited By MugenAkagi

@TrueProphecy22 Not when you do the math...

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PC-RUL3S

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Edited By PC-RUL3S

I've been waiting for ages for this patch, I just don't understand how they can get in such a mess.

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dab0ne

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Edited By dab0ne

I hate it when this happens. Stories like this make other Dev's scared to take risks on new IP's. Don't know what's going to happen to gaming in the future. Seems like the risk of creating a new major title is getting to be too high.

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yuunnnnna

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Edited By yuunnnnna

Also ya can't say that we didn't see this coming.

THQ would've been the next one to bite the dust if it was for Saints Row.

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yuunnnnna

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Edited By yuunnnnna

Amalur was WAAAY too huge and publicized, especialy when the game played like a single player MMO. Not to say its a bad game, but it was definitely mediocre.

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inaka_rob

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Edited By inaka_rob

so the game will be free now.... right. since its a "failure" or still carry its near 60USD price tag...

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nchan

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Edited By nchan

OMG, why does a game need to sell 3 millions just to break even? Let's hope that next gen, Sony and Microsoft don't make their console high power specs, otherwise, many developers will be out of business.

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supersaiyan_sam

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Edited By supersaiyan_sam

@nchan This is a reason we shouldn't be pushing next gen so soon. Dev's still have their investment in current gen and the little devs would hate to have to reinvest

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bgranli

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Edited By bgranli

@supersaiyan_sam @nchan I totally agree.

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inaka_rob

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Edited By inaka_rob

wow! this game is on #1 on my want list. and this just referms what I have been say for a decade now. I would HATE to work in this industry. I graduated with a degree in Mass Comm and was headed for a career in the TV and movie biz... but shortly before I graduated I realized what a terrible industry it is to work in. the video game bisienss is even worse.

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Jaga_Telesin

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Edited By Jaga_Telesin

- Less DLC right after launch.

- More attention to quality control and quality assurance.

- Better attention to community feedback.

- The highest priority on patching bugs and imbalances.

- A more realistic price tag. The days of $60 single-player games are virtually over.

All of these things would have increased sales on KOA:R by leaps and bounds. Virtually everyone I talked to who did not purchase the game fell under one or more of these categories.

Increasing sales due to a different strategy would have made KOA:R a profitable venture, and saved the company in the long run. The fact that strategy ended up the way it did is solely due to upper management, as they control logistics for the entire IP.

It is a shame, but 38 Studios has no one to blame but those who ran the company. Let it be a lesson to others that you can't cut corners and treat your community like dolts with open wallets. A "Reckoning" is absolutely what will occur when you do.

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CalamityKate

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Edited By CalamityKate

I feel sorry for the employees. They obviously put a lot of time and effort into Amalur, creating a nice, large gameworld with a deep backstory and plenty of gameplay.

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gix47

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Edited By gix47

KoA was a good game and did well,what happen here is very poor management and poor handling of a budget

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PlatinumPaladin

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Edited By PlatinumPaladin

"The Company is experiencing an economic downturn." The polite way of saying "we're fu@£ed!" I'd say 38 is obliged to sell the Amalur IP and give the money to the state.

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sircyrus

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Edited By sircyrus

Sad to see so many developers out of work when they delivered a game that so many enjoyed. I personally wasn't a fan of KoA, but I remember Curt Schilling from back in the EQ1 days. He truly enjoys games, which is more than can be said about some heads of gaming companies these days. It's a shame the industry lost that passion.

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Eklundz

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Edited By Eklundz

Two or three simple patches would have saved the game.

Most people didn't go out and buy this day one because it's a new game world and a new franchise.

However, the ones that waited for a few reviews just saw all the hate being spewed on the forums and by word of mouth.

I played the game for 1.5 week, then I realized that the game was aimed towards toddlers with it's no existent challenge.

A game which focuses on action and loot hunting MUST have challenge, The whole point of hunting for loot is to outperform the hard parts and eventually being able to survive against the bigest and badest monsters.

Amalur/Reckoning would have worked if they would just have patched the game instead of trying to milk it for more money by releasing DLC.

One patch to fix the bugs

And one to fix the difficulty

Then everyone would have been happy with the game, the game world was Cool, graphics where really nice, the action was good and the feeling in the game was good as well.

I don't understand companies that don't patch their games.

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