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Curt Schilling's 38 Studios laid off all of their employees today, shutting down both their Rhode Island office and Maryland-based subsidiary Big Huge Games, a source familiar with the company tells Polygon. The news came as a surprise to nearly everyone involved, including the state of Rhode Island and Governor Lincoln Chafee who during an afternoon press conference said that as of this morning they hadn't heard a word about possible layoffs or a closure. During the evening press conference Chafee attributed the sudden studio closure and financial plummet to the studio's fist game, Kingdoms of Amalur: Reckoning, which he said "failed."

"The game failed," he said. "The game failed. That was integral to the success of the company."

He told reporters that experts told them it would have had to sell 3 million copies to break even. Schilling has said that the game sold about 1.2 million copies in its first 90 days. "Companies fail over night," Chafee said, in response to a question about the sudden closure. The studio's financial turmoil came to light earlier this month when they first missed and then later made a $1.125 million payment to the state of Rhode Island.