The unfortunate reality of the game industry today; 38 Studios and Big Huge Games officially disbanded

It's not always all fun and games in the video game world. In an unfortunate turn of events, the entire staff of 38 Studios has now been let go, and Big Huge Games has officially closed its doors. First reported on by Kotaku, 38 Studios was best known for their work on the recently released Kingdoms of Amalur: Reckoning with the help of Big Huge Games, which was a company that 38 Studios owned.

According to WPRI, each employee was met today with the following email:

"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."

Seems like a rather cold way to inform your entire staff that they no longer have jobs. This news comes after a plethora of financial problems that 38 Studios was facing. In regards to Amalur, Rhode Island governor Lincoln Chafee even went as far as to say "the game failed" and that it needed to sell 3 million copies to make back its investment from the state, which it clearly did not.

It's challenging for new IPs to establish an audience.

It's pretty astonishing just how expensive game development is nowadays, as well as how crucial it is to balance risk versus reward in regards to where you dedicate most of your time and resources. It's a difficult industry out there for developers. Just one small misstep could lead to circumstances such as this.

Best of luck to everyone involved in this ugly situation.