As much as we like to talk about success stories around here, it’s an unfortunate truth that sometimes the little guy doesn’t pull through. Yesterday reports started circulating that fledgeling development house 38 Studios closed its doors, laying off all 379 staff employees at both their main Rhode Island office and the Big Huge Games subsidiary in Maryland, and today further reports confirmed the development.

The first signs of trouble came earlier this month, when the studio missed its scheduled loan payment to the state’s Economic Development Corporation, then failed to make a $1.125 million loan payment via check due to insufficient funds. A round of unexplained layoffs and inability to pay their entire staff twice in one month later and… well, we feel like we really should’ve seen this coming in hindsight.

Kingdoms of Amalur performed modestly, selling 1.3 million copies in its first 90 days and receiving generally positive feedback from critics and customers. Clearly not well enough, though; the state estimated that the title needed to sell 3 million units in order to break even on its loan.

After all the trouble Rhode Island went through to attract 38 Studios from its Massachusetts home, seeing this experiment in direct state funding to game studios come to such a messy end is especially disappointing. All things considered, we wouldn’t be surprised if we don’t see another attempt at this kind of project for a while.