'We're a little over a week away from the biggest and most exciting event on the gaming calendar, but things took a bit of a turn for the grisly this week. Kingdoms of Amalur: Reckoning developer 38 Studios completely collapsed, impacting its entire staff of nearly 400 employees, and the impending legal battle between ex-Infinity Ward leads Jason West and Vince Zampella and former employer Activision got uglier and uglier.

　　We discuss all this and more in this week's episode of Quoted for Truth, embedded here for your viewing pleasure, and move on to round up the week's other big stories below.

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38 Studios: The Reckoning

Kingdoms of Amalur: Reckoning maker 38 Studios and its subsidiary Big Huge Games are no more. This past Thursday we learned the unfortunate news that all employees at Curt Schilling's Rhode Island-based and Maryland-based development studios have been let go. 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 as of this week. 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 game failed. The game failed." The way that the staff of the company found out that they no longer had jobs got a lot of attention on Twitter because of the cold and detached tone of the note that was sent out company-wide. "The Company is experiencing an economic downturn," the company's management told employees in an email distributed Thursday afternoon. "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."

　　In a press conference on Thursday afternoon, Rhode Island Governor Lincoln Chaffee 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, Chaffee explained, "The game failed. The game failed." He added that Reckoning would have needed to sell 3 million copies just to break even. "I would gladly extend the life of the company if I had confidence it would lead to profitability," Chafee said. Charles Fogarty, director of the Rhode Island Department of Labor and Training, said his office reached out to 38 Studios' human resources department on Thursday to offer assistance and was told the company might contact DLT later in the week.

　　Interestingly, Schilling had tweeted the following just the day before, stating that the game had exceeded Electronic Arts' expectations.

　　Reckoning, 38 Studios first game, has outperformed EA's projections by selling 1.2mm copies in its first 90 days

　　— Curt Schilling (@gehrig38) May 24, 2012

　　38 Studios creative director Steve Danuser sees things differently. He told TV station NECN that he had expected more from Rhode Island Governor Lincoln Chafee, who called the original loan a bad deal and said the studio wouldn't receive any more aid unless he was convinced it could become profitable. "We just needed a little more help, and we thought the state would have our backs on that," Danuser said. "We thought the governor was an ally. It didn't turn out that way… Why did you do it? Why didn't you help us? [Governor Chafee] said a lot of things, he's broken confidentiality. He's done a lot of things to materially hurt us and I don't understand it."

　　You'd think that things couldn't get any worse for the beleaguered ex-employees, but you'd be wrong. On Friday afternoon, Polygon's Brian Crecente posted a report claiming that when 38 Studios moved from Massachusetts to Rhode Island in 2010, it offered employees a relocation program that would see the company sell their old homes for them. However, "some" employees received notice from banks this week that they had missed mortgage payments on their old homes, at least one of which 38 Studios told the owner employee it had sold last year. An unspecified 38 Studios official told the site that it was trying to resolve the situation. Let's hope they do.

　　Schilling has yet to speak of the week's events directly. His only acknowledgment being the following tweet.

　　Thank you to everyone sending prayers and well wishes to the team and families of 38 Studios.

　　— Curt Schilling (@gehrig38) May 25, 2012

　　

New Star Wars Game at E3

　　Gamers eager to learn where the next chapter in the Star Wars game saga will take them have less than two weeks before they'll find out. Spike TV and LucasArts announced earlier this week that a new Star Wars game franchise will be unveiled on May 31, with a gameplay reveal following on June 4. The new mystery project will have its coming-out party on Thursday, May 31, during Spike's Game Trailers TV show. Earlier this month, Lucasfilm filed a trademark application and registered domain names for Star Wars 1313, spiking speculation that this is the name of a new game in the Star Wars franchise.

　　CT-1313 was an alias used by Boba Fett. Is there significance to the number 1313? Well, yes, but it's possibly quite tenuous in this context. CT-1313 was an alias used by Boba Fett on the Intergalactic Banking Clan planet Aargau in the Clone Wars-era Star Wars novel Boba Fett: Maze of Deception. In the story, the teenage Fett teams up with bounty hunter Aurra Sing to find his father's hidden fortune.

　　Wow, that last paragraph was nerdy. Could we be getting a Star Wars: Bounty Hunter reboot? Unlikely, but safe money is on something Fett-related. Honestly, we'd be perfectly happy with a Battlefront reboot, or another Star Wars: Republic Commando. Let us know your theories on what the game might be in the comments.

　　

Law and Order: Modern Warfare

In March 2010, Activision fired ex-Infinity Ward heads Jason West and Vince Zampella for insubordination, claiming the pair were secretly planning to start their new studio with the help of Electronic Arts. Recently unsealed emails between Activision management shows that the publisher had a fraught relationship with the studio. West and Zampella filed a lawsuit against Activision for this move, claiming the real reason they were fired was so Activision wouldn't have to pay them millions of dollars in royalties from Modern Warfare 2. Beyond the performance-based payout and any other court-awarded damages, West and Zampella are seeking to gain co-ownership of the Modern Warfare brand. If successful, the duo would have the right to create and release both old and new installments in the franchise.

　　"They betrayed them, and they abandoned them. The documents we've seen from their files are appalling…from Bobby Kotick and Mike Griffith, their attitude towards Jason and Vince, their cavalier attitude about breaching their contract." Ahead of the trial on June 1 (it has recently been pushed back from the original date of May 29), GameSpot spoke to the attorney representing West and Zampella, Robert M. Schwartz. Even by lawyer standards, Schwartz seemed pretty confident of their chances. "We're very confident. We have numerous damning documents, smoking guns, and admissions from key Activision executives that show they seduced Jason and Vince into entering this contract in 2008 with no intention of honoring it," he explained. "They betrayed them, and they abandoned them. The documents we've seen from their files are appalling…from Bobby Kotick and Mike Griffith, their attitude towards Jason and Vince, their cavalier attitude about breaching their contract. We are eager to get this in front of the jury."

　　What kind of damning documents? Those unsealed emails show correspondence between Activision CEO and chairman Bobby Kotick, co-chairman Brian Kelly, and president Mike Griffith in which Activision senior management discuss West and Zampella at length. In a January 26, 2009, email exchange between Griffith and Activision executive vice president of worldwide studios Dave Stohl, the two discuss "kicking out" Zampella and West. "They've yet to talk about how to respond," Griffith wrote to Stohl. "I've asked them to try to respond to the proposal unemotionally--which is probably impossible for them. […] We should also discuss what the plan B is going to look like. Steve and I going out there is one option, but there could still be a ton of risk getting the project done depending on how the team takes it. Treyarch taking it over now is also an option, but scary given the tight timeline. It would probably have to be a combination of the two. I know you mentioned that Brian K. is pretty over them at this point, but is everyone ready for the big, negative PR story this is going to turn into if we kick them out?"

　　Whether everyone was "ready" or not, that was certainly what they got. West and Zampella's legal firm are demonstrating a remarkable skill at manipulating the media cycle, and quickly seem to be trying to develop a scenario by which their clients just can't lose (in the court of public opinion, at least), regardless of how the judge ultimately rules. How do you think this is going to develop in the coming weeks? Which side do you think the judge will ultimately come down on? Will Activision be punished for being the "evil corporation" trying to cheat creative talent out of their earnings, or will West and Zampella be exposed as difficult and demanding creative types? Let us know how you think it will unfold in the comments.

　　

Bungie's Destiny

An unexpected side effect of all the West and Zampella drama was the unrelated information that got caught up in the mess when the documents were unsealed ahead of the trial. Of note was information about Bungie's 2010 contract with Activision. When the studio signed its publishing partnership agreement, it committed to four games and four downloadable add-ons in eight years, with the first set for release exclusively on the Xbox 360 and its successor in 2013. A PlayStation 3 version of the game would be planned to follow in the fall of 2014. The paper reports that the original agreement had Bungie on the hook to deliver four "massively multiplayer-style…sci-fantasy, action shooter games" under the code name "Destiny." The quartet would kick off in the fall of 2013 with a game for the Xbox 360 and its successor, with subsequent installments to launch every second year thereafter for Sony's consoles and PCs as well. For the years in between those main installments in the series, Bungie would produce downloadable expansion packs under the code name "Comet." The first such add-on was slated to hit in 2014.

　　In addition to the Activision projects, the contract revealed a possible revamp of Bungie's Marathon series. Under the agreement, Bungie can devote up to 5 percent of its staff to work on an action shooter prototype for the franchise. If you've never checked out the game, which originally shipped for the Mac, there's a pretty decent Xbox 360 version called Marathon: Durandal (pictured) along with a remarkably well-executed iOS version in the App Store.

　　It should be noted that this contract was drawn up several years ago when details of next-generation hardware were scant. Though the schedule may seem to confirm a new Xbox next year, that may not necessarily be the case.

　　

Colossus Chronicles

It's going to be directed by Josh Trank. Yes, there's a Shadow of the Colossus movie coming out (well, probably) and it's going to be directed by Josh Trank. Does that name sound a little familiar? No? Have you seen the sleeper hit teenage superhero flick Chronicle? Well, that guy. He certainly has an eye for shaping contemporary pop culture ideas, so it's possible he may be able to wrestle the concept into something that works as a movie.

　　What do you think? Does it stand a chance of being a good movie? Or do you think it's doomed to failure like so many other lacking video game adaptations? Let us know in the comments.

　　

Last Week's Games Sold a Lot

"The video game business is doomed," blah blah. "PC gaming is dead," blah blah. Last week the games industry got some of its mojo back, puffed out its chest, and busted out not one, but two big hits that got off to spectacular starts. First up, the highly anticipated (but broadly criticized for its always-online DRM nonsense) Diablo III sold a whopping 3.5 million copies in its first 24 hours on sale, and more than 6.3 million copies during its first week. Blizzard claims that sales of this magnitude make the title the "fastest-selling PC game" in history. They very well may be right, but we've yet to see this verified by anyone else. Diablo III's first-day sales do not include the 1.2 million players who received Diablo III as part of the World of Warcraft annual pass promotion. Additionally, the game's first-week tally does not factor in players in Korean Internet game rooms, Blizzard said.

　　The other big hit was, of course, Max Payne 3, which publisher Take-Two Interactive announced had shipped 3 million copies. That's shipped, not necessarily sold. But it's still a lot.

　　

Horse Armor, Redux

In The Elder Scrolls IV: Oblivion, the idea of horse armor was utterly preposterous, despite the fact that a bunch of us actually bought it. In Skyrim it's about to become something of a necessity. Why? Because Bethesda has added mounted combat to the game. An update on Bethesda's blog reveals that this "highly requested" feature is now available for PC players who download the game's 1.6 update through Steam. Information concerning mounted combat for console versions of Skyrim will be announced at a later date. Mounted combat in Skyrim allows players to deal melee and ranged damage while riding a horse. This feature came about via Bethesda's latest game jam, a weeklong period when staff were allowed to create whatever they wanted to on company time. So what are you waiting for? Go get it.

　　'