38 Studios and Big Huge Games folded today and layed off all of their nearly 400 employees. The game sold 1.2 million copies in the first 90 days, out performing EA's expectations. According to this article, the company would have needed to sell 3 million just to break even. Maybe it was just a poor business model and maybe it is that development costs have escalated to a point where $60 isn't enough to ensure profitability. If development costs for new IPs are so outrageous that a game has to sell 3 million to break even, it won't be long until we see a $70 or $80 price point.
Kingdoms of Amalur was, in my humble opinion, a great game (the metacritic score is 80, generally favorable). It was great to see a studio taking a risk on a new intellectual property and this is terrible news for those who can't stand the constant churning out of sequels. I hope it doesn't scare away devs and publishers from exploring new ideas.