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RI Biz: Winners & Flops

Tuesday, September 06, 2011


RI Biz Winners and Flops – a review of the people and companies that make RI’s economic engine go or slow. August was dominated by Irene and the response to the tropical storm. Between the vacations, the storm and the clean up, there was a lot of business action.


Citizens Bank - Citizens Bank is offering loans and 0 percent interest credit cards to their customers affected by Irene. The effort is meant to minimize the adverse impact to consumers, business and not-for-profits. Webster Bank also offered some solutions to customers hit by the storm.

Rhode Island's Bond Rating with Fitch - just before Irene hit, RI got some good news when the bond rating agency held Rhode Island's bond rating. In its message, Fitch wrote: "Revenue forecasts are markedly improved, as evidenced by receipts through June 2011 of 12.7% year-over-year growth in personal income tax collections; 1.6% year-over-year growth in sales tax revenue, and a total 4.9% year-over-year increase in General Revenues. This results in estimates of fiscal 2011 ending with a $57.2 million operating surplus and an $80.8 million deposit to the Budget Reserve Fund which increases total rainy day funds to $130.6 million." Some good news in Rhody here.

Toray Expansion - Toray Plastics President and CEO Richard R. Schloesser to announce and celebrate the company’s planned $11.5-million expansion in Rhode Island, which will create 28 new jobs in the state. The state has some incentives in the project.

38 Studios - the state-backed video game company announced that its first game, titled “Kingdom of Amalur: Reckoning”, is scheduled to be released on Feb. 7, 2012.

NuLabel Technologies - a Brown spinoff and Providence startup makes high-tech labels for the shipping industry. It closed on $1 million in new funding and is still looking to close another $1.5.

Senator Tassoni - the union-leaning Senator was on to something with a PUC review of National Grid. Nothing wrong with reviewing the response. 

Betaspring - 12 teams will be presenting on Thursday Sept 8th on Demo Day. These start ups are looking to get some traction and attract some funding.


RI Tech Community got shut out by Mass High Tech - the trade magazine for the New England tech community did not select a single company for its All-Star category or its Emerging Stars. These awards are a queue to the Boston venture world.

195 Commission - this could be in the winner category too as it is made up with solid appointments. But, that is the weakness. It lack visionaries and seems rather local. Where are the John Palmieri-types or Richard Florida... or even a Bob Kraft? If these 20 acres are going to be the focal point and transformation of the RI economy, then this group needs some fire power.

Irene - by the time it made shore in Rhode Island, this storm was barely a tropical storm, but the backbone of our energy infrastructure was crushed. At one point, as much as 60-70 percent of the state was without power. 

Unemployed - there simply seems to be no game plan to put people to work. It has been more than three years that Rhode Island qualifies as a distressed state - a state with an unemployment rate one full point higher than the national average.

Pension PR - The Labor Day issue of the Washington Post featured a story on the threat to American workers' pensions. Rhode Island runs the risk of becoming the poster child for pension liability. The Post's Michael Fletcher writes, "This state has barely a million residents, but it is at least $6.8 billion short when it comes to funding pension plans for retired teachers, police officers and other public employees."


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You gotta go some to call those winners "winners".

Citizens Bank is the only one that is a going concern.. and the banking industry as a whole is in the toilet and begging bailouts from the government due to mortgage loans gone bad.

Toray's expansion is an actual piece of good news.

38 Studios is a guaranteed loser.... the idiots at economic development squandered taxpayer money out of their awe over meeting some sports personality.

They have no products, no expertise... no realistic prospects of anything but a colorful bankruptcy proceeding.

The others are startups with no track record of any sort.. and are still looking to con somebody out of some money.

These are not "winners".

Considering speculative chit chat a "win" is 3/4 of RI's problem...counting chickens before they hatch... and spending the winnings from a horse race before they leave the gate... are what plagues RI at every turn.

Comment #1 by Caroline Evans on 2011 09 06


Yeah 38 Studios has no product at all... except for one of the most highly nominated and anticipated titles in 2012. Bust besides that it has nothing....

Comment #2 by John T on 2011 09 06

@John T..... and let us guess... you work for them, don't you?

Let us also see.... how can a product that is not yet in production nominated for anything?

And tell us what is the ROI on anticipation, anyhow?

Video games are a form of entertainment... and there is close to zero likelihood that a startup of wannabes with no track record at all will produce anything that will be successful.

ONE title.... ONE!?!?!?
And this is a viable company?
Of course not... it is a scam... a little crowd of scammer will award themselves grandiose salaries out of taxpayer loans.... fail... declare bankruptcy... and leave the taxpayer holding the bag.

Of course... there will be the entertainment value of the investigations of who took how much and when to do what.

So the public will get some extremely expensive entertainment out of this boondoggle.... but as to the videogame... .give us all a break.

Comment #3 by Caroline Evans on 2011 09 06

It is real interesting to research Studio 38 and its affiliates and acquisitions.

It is a collection of past their prime gamemakers who lost a $15million lawsuit. Their most recent product... produced under another corporate umbrella.... pre-acquisition by Studio 38... was reviewed as "lame and repetitive".

It would seem they had one successful idea.. back in the mid-1990s... and have yet to duplicate it. In videogame terms... they are dinosaurs.

This seems like losers looking to make a comeback... and who have failed at other similar efforts over the past decade.

The likelihood of this actually working out is next to zero.... it is taxpayer money down the rathole.

Comment #4 by Caroline Evans on 2011 09 06

My prediction is to wait until the Studio 38 product is launched this coming winter... but don't bother buying it at full retail upon launch.

We can guess the full retail will be around $49 to $99 in an effort to quickly recoup some money to make loan payments. Also.. it is a typical marketer's tool to rack up the price on a mediocre product in the hope a high price will give the false perception of high value.

If you have the patience to wait 6-12 months... you will probably be able to find it in the cutout bin at Ocean State Job Lot for about $5.

Comment #5 by Caroline Evans on 2011 09 06

Oh.. and another thing you RIers might like to know....

Your money went to Baltimore Maryland... which is where the dozens of animators of this project work.

Your RI money went to bail out the economy in Maryland... as that is where the entire animation staff works.

There is a token front here in Providence RI..... and that is all it is.

Now.... when the entire economic development budget gets spent on a company in Maryland.... is it not time for the IRS and FBI to get involved and to see who took bribes of what sort and size in order for this scam to go down.

Anyone who can evaluate a business knows this is a loser.. and incompetence is the standard in RI... so if this loser was, at least, in RI.... the money spent on donuts and copy paper and payroll would at least stay here.

But... when the money is shifted to Maryland.... and an entire budget too... we can feel pretty confidently suspicious it is not just incompetence at work..... but a deliberate bribe-intense scam.

Comment #6 by Caroline Evans on 2011 09 07

There are about 1 million people in RI.

38 Studio was loaned $75 million.

This means that each and every citizen of the state of RI was robbed of $75/each.... and had the money loaned out to some hare-brained nincompoops with an already obsolete video game they hoped to create.

Don't you just feel all warm and cozy inside knowing that they took a more than a day's pay from every minimum wage worked in the state so some jerkwater retired baseball player can play at creating a video game for his own amusement???

But that would be a minimum wage worker who is single and has no kids.

Now suppose that worker is a single mom with two kids.... that means that household had to pony up $225... there are three RIers in that household.... for this project.

And... ya know.. for a minumum wager.... that is pretty much an entire week's pay.. after you subtract out gas and car and insurance to get to the job.... and a few bucks for child care too.

Ayup... are we not proud to have stolen a week's groceries and rent from every working person in the state for the benefit of some spoiled "man" who got paid outrageous sums to play a children's playground game for the amusement of beer drinkers???

Ayup.... great bit of "economic development", eh?

Comment #7 by Caroline Evans on 2011 09 08

Hi, a 38 Studios employee here. Let me see if I can introduce a little bit of reality into this discussion.

* To the "no products, no expertise" comment -- while it is true that 38S hasn't yet released a product, there are two products in development, both to release in the near future. As to the "no expertise" comment, that's just ignorance speaking. I am one of about 250 38Studios employees here in Providence and I have 28 years of experience in video and computer games. Many of my fellow employees have 10+ years of experience. How much experience does the commenter have in his/her field, if any?

* To the "how can a product not in production be nominated for anything" comment -- apparently the commenter doesn't realize that Reckoning, the product in question, has been in production for several years (video/computer games take a long time to create, unlike fields of endeavor the commenter might be familiar with). It has been nominated for multiple awards based on early showings of a very impressive product.

* To the "ONE!?!" comment -- no, 38S has two projects in active development. Unlike fields of endeavor the commenter might be familiar with, video/computer games take teams of 75-500 people to produce, so having two projects going simultaneously is quite ambitious.

* To the "wannabes with no track record" comment -- I addressed that in my first point. I'm guessing most of us here have more of a track record in our field than does the commenter.

* To the multiple comments about past track record in "Caroline Evans" fourth comment -- Many people here have very successful games under their belts, no idea what you're talking about failed games, dinosaurs, losers, etc. You'd need to come up with some actual specifics there for me to address.

* The comment about pricing is silly and shows a lack of knowledge of the industry.

* The comment about RI's money going to Maryland is just plain untrue. Big Huge Games, 38S's subsidiary in Maryland, is smaller than 38S here in Providence. Most (maybe all) of RI's money stayed here in RI. Since "Caroline Evans" doesn't seem to understand, let me explain. 38S has brought its studio to RI and most of its employees have moved here. Others have been hired from around the country and have moved to RI. I was hired from WI and moved to RI. The loan guarantee (not a loan or a gift of money) from RI has done exactly what the RIEDC intended it to -- bolstered RI's economy by bringing high-paying jobs here, bringing workers into the state, where they now live and pay taxes. And it has brought a high-tech company here, to act as an incubator and incentive for other high-tech companies to move or form here. That's exactly what this loan guarantee was supposed to do and it's worked.

* About "Caroline Evans" comment #7, the commenter doesn't seem to understand that RIEDC gave 38 Studios a loan guarantee, not a gift of money or even a loan. As I understand it, RI effectively agreed to co-sign a loan with 38 Studios, guaranteeing that loan for the bank or banks that were going to make it to 38 Studios. No money was given to 38S, and no Rhode Islanders lost money with this loan guarantee. In fact, AFAIK the company is paying back this loan faster than required and has already paid back big chunks of it. So all of the financial numbers that "Caroline Evans" made up are pretty much meaningless. There are no losses, no money "stolen" from RI by "losers," nothing that the commenter has made up looks correct.

Overall, to make a personal aside to "Caroline Evans," you sound very bitter. Did you apply here and were denied a job?

Mike Breault
Narrative Designer
38 Studios

Comment #8 by Mike Breault on 2011 09 12

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