(3B Studios, LLC Project), Series 2010: Bond Summary Statistics

TABLE OF CONTENTS
Rhode Island Economic Development Corporation

Job Creation Guaranty Program
Taxable Revenue Bonds
(3B Studios, LLC Project), Series 2010
Report
Page
Sources and Uses of Funds
Bond Summary Statistics
Bond Pricing
Bond Debt Service
Project Fund
Net Debt Service
Debt Service Reserve Fund
Capitalized Interest Fund
Form 8038 Statistics
10
Proof of Arbitrage Yield
11
Underwriter's Discount
12
Ocr 26. 2010 12:35 pm Prepared by DBC Finance
CONFIDENTIAL
(1:, ... \rhode is/and\ri economic development corp\dea/ files\38 studios\quant\riedc:RIEDC-2010)
BCI_00008909
SOURCES AND USES OF FUNDS

(38 Studios, LLC Project), Series 2010

Dated Date
Delivery Date
11/02/2010
11 !0212010
Sources:
Bond Proceeds:
Par Amount
75,000,000.00
75,000,000.00
Uses:
Project Fund Deposits:
ProJect Fund
49,799,010.42
Other Fund Deposits:

Debt Service Reserve Fund
Capitalized Interest Fund
Delivery Date Expenses:

Cost of Issuance
Bond Insurance
12,749,91250
10,604,076.63
23,353,989.13
650,000.00
634,065.00
562,935.45
1,847,000.45
75,000,000.00
Oct 26, 2010 12:35 pm Preoared by DBC Finance
CONFIDENTIAL
(! , .. .'.rhode island\ri
econom1c development corp',deal files\38 studfos\quent\riedc:RfEDC-2010) Pege 1
BC1_00008910
BOND SUMMARY STATISTICS

11/0212010
11/02/2010
Dated Date
Delivery Date
First Coupon
Last Maturity
05/01/2011
11/01/2020
7.421605%
Arbitrage Yield
True Interest Cost (TIC)
Net Interest Cost (NIC)
Ail-In TIC
Average Coupon
7.585763%
7.444181%
7.756023%
7.320687%
6.846
5.360
Average Life (years}

Duration of Issue (years)
75,000,000.00
75,000,000.00
37,587,089.13
Par Amount
Bond Proceeds
Total Interest
Net Interest
Bond Years from Dated Date
Bond Years from Delivery Date
T alai Debt Service
Maximum Annual Debt Service
Average Annuai Debt Service
38,221 '154.13
513,436,666.67
513,436,666.67
112,587,089.13
12,749,912.50
11,261,837.20
Underwriter's Fees (per $1000)

Average Takedown
Management Fee
Other Fee
6.250000
1.000000
1.204200
8.454200
Total Underwriter's Discount

Bid Price
99.154580
Par
Bond Component
2015 Term Bond
2016 Serial Bond
2020 Term Bond
Value
Price
Average
Coupon
Average
Life
PVof1bp
change
23.685,000.00
100.000
100.000
100.000
6.000%
6.750%
7.750%
4.036
5.997
9,947.70
B-590
29,293.95
6.846
43,494.45
8,860,000.00
42,455,000.00
75,000,000.00
TIC
Ali-In
TIC
Arbitrage
Yield
Par Value
+ Accrued Interest
+ Premium (Discount)
-Underwriter's Discount
-Cost of Issuance Expense
-Other Amounts
75,000,000.00
75,000.000.00
75,000,000.00
Target Value
73,802,999.55
73,152,999.55
74,437,064.55
11/02/2010
7.585763%
11!02/201 0
7.756023%
11/02/2010
7.421605%
Target Date
Yield
Oct 26, 2010 12:35 pm Prepared by DBC Finance
CONFIDENTIAL
4,252 80
(634,065.00)
(634,065.00)
(650,000.00)
(562,935.45)
(562,935.45)
(562,935.45)
(J:I ... Ifhooe islandlri economic development corp ideal fi/es\38 studios\quant\riedc:RIEDC-2010) Page 2
BCI_00008911
BONO PRICING
Maturity
Date
Bond Component
Amount
Rate
Yield
Price
7,440,000
7,885,000
6.000%
6.000%
6.000%
6.000%
6.000%
6.000%
100.000
100.000
100.000
2015 Term Bond:

11/01/2013
11/0112014
1110112015
8,360,000
23,685,000
2016 Serial Bond:

11101/2016
8,860,000
6.750%
6.750%
100.000
11101!2017
11/01/2018
11/01/2019
9,455,000
7.750%
7.750%
100.000
10,190,000
10,980,000
7.750%
11,830,000
7.750%
7.750%
7.750%
7.750%
100.000
100.000
2020 Term Bond
11/01/2020
7.750%
100.000
42,455,000
75,000,000
Dated Date
Delivery Date
First Coupon
11/02/2010
05/01/2011
Par Amount
Original Issue Discount
75,000.000.00
Production
75,000,000.00
Purchase Price
Accrued Interest
74,365,935.00
Net Proceeds
74,365,935.00
CONFIDENTIAL
11102/2010
(634,065.00)
100.000000%
(0.845420)
99.154580%
(/: .. '.rhode rsland'.ri economrc development corp ideal files\38 studios\quant'.riedc:RIEDC-2010) Page 3
BCI_00008912
BOND DEBT SERVICE


Dated Date
Delivery Date
Period
Ending
Annual
Interest
Debt Service
Debt Service
05/01/2011
2.639.957.88
11/01/2011
2,654,706.25
5,294,664.13
0510112012
2,654.706.25
2,639,957.88
2,654,706.25
2,654,706.25
11/0112012
0510112013
1110112013
05/01/2014
11/01/2014
05/01/2015
11/0112015
05/01/2016
11/01/2016
05/0112017
11/01/2017
05/01/2018
11!01/2018
05/01/2019
11/01/2019
05/01/2020
11/01/2020
2,654,706.25
2,654,706.25
2,654,706.25
2,654,706.25
2,654,706.25
5,309,412.50
10,094,706.25
12,749,412.50
2,431,506.25
2,431,506.25
2.431,506.25
2,194,956.25
10,316,506.25
2,194,956.25
1,944,156.25
1,944,156.25
1,645,131.25
1,645,131.25
1.278,750.00
1,278,750.00
883,887.50
883,887.50
458,412.50
458,412.50
10,554 '956.25
1,944.156.25
10,804,156.25
1,645,131.25
11,100,131.25
1,278, 750.00
11,468,750.00
883,887.50
11,863,887.50
458,412.50
12,288,412.50
37,587,089.13
112,587,089.13
Principal
7,440,000
7,885,000
Coupon
6.000%
6.000%
8,360,000
6.000%
8,860,000
6.750/o
9,455,000
7.750%
10,190,000
7.750%
10,980,000
7.750%
11,830,000
7.750%
75.000,000
Ocr 26_. 2010 12:35 pm Prepared by DBC Finance
CONFIDENTIAL
11/02/2010
11/02/2010
12,748,012.50
2,194,956.25
12,749,912.50
12,748,312.50
12,745,262.50
12,747,500.00
12,747,775.00
12,746,825.00
112.587,089.13
(/:'1 ... 1f1lode islandvi economic development corp\dea/ files\38 srud/os\quant\riedc:RfEDC-2010} Page 4
BCI_00008913
BOND DEBT SERVICE


11/02/2010
1110212010
Dated Date
Delivery Date
Period
Ending
1110112011
11/0112012
11/0112013
11101/2014
11/01/2015
11/0112016
11/0112017
11101/2018
11/01/2019
11/0112020
Principal
7,440,000
7,885,000
8,360,000
8,860,000
9,455,000
10,190,000
10,980,000
11,830,000
75,000,000
Oct 26, 2010 12:35 pm Pre{Jared by OBC Finance
CONFIDENTIAL
Coupon
Interest
Debt Service
6.000%
6.000%
6.000%
6.750%
7.750'%
7.750%
7.750%
7.750%
5,294,664.13
5,309,412.50
5,309,412.50
4,863,012.50
4,389,912.50
3,888,312.50
3,290,262.50
2,557,500.00
1,767,775.00
916,825.00
5,294,664.13
5.309,412.50
12,749,412.50
12,748,012.50
12.749,912.50
12,748,312.50
12,745,262.50
12.747,500.00
12,747,775.00
12,7 46,825.00
37,587,089.13
112,587,089.13
(/:I ... \rhode islandvi economic development corp\dea/ fi/es\38 studiosi.quant\n"edc:R/EDC-2010) Page 5
BC1_00008914
PROJECT FUND
Incoming
Interest
Date
11102/2010
1113012010
12131/2010
01131/2011
(212812011
0313'12011
0411512011
0413012011
0511l112011
05!31!2011
06/3012011
0713112011
08131/2011
09.'30!2011
101C71201 1
1013112011
11101!2011
1113012011
1213112011
01131.'2012
Deposit
@0.25o/,
49,7&9.01 a 42
7,155.36
7,667.95
5,711.22
5,712.41
5,713 60
Principal
Debt Service
Reserve Fund
Capita1il:od
lntere!ll Fund
13,000,000.00
9.392,332.05
G.400.COO.OO
(5,711.22)
(5.712.41 J
(3.923.12)
2,132.27
2.132 71
2.133.16
2.1::!3.60
2.134.05
{2, 132.271
(2.132.71)
17.200,000.00
(44.879.16)
1.269.15
423 96
424.05
50.137.44
(2.133.60)
(2.134.051
4.155,120.84
{1.470 83)
4.056.900.92
(423.96)
2.035.432.90
49,799,010 42
Av!!rage L1fe :years)

Yield To ReC,p! Date:
Arbitrage Yield
Value ol NE>gaUva Art11traga
Balance
42
36,306,165.78
27,413,633.73
27_419,544.95
27,425.257.36
27.430,970.96
(5,713.60)
3,923.12
1,470.83
Scheduled
Draws
13,000,000 00
(7.15536i
17 ,200,()00.00
49,799,010.42
CONFIDENTIAL
Cashflow
Principal
31.697 70
13,181.46
31,874.78
9,955.15
44.879.16
4,200.000.00
(41 ,829.93)
41,82g_gJ
4.100.000.00
10.230.970.96
10,234.894.08
10.279.773 24
10.281.905.51
10.284 038.22
10.286,171.38
10,288,304.98
10,290,439.03
6.090.439.03
6,091,909 86
6.133,739.79
2.0:>5.008.94
2.035,432.90
2,035,856.95
63.572.48
0.00
23.136.61
4S.935,856.95
o 4034
0 2494510%
7 4216048%
1.377.11i:i.50
(1: 1... \Jtiode island'J"i economic development corp\deal files\38 studios\quant\riedc:RJEOC-2010) Page 6
BCI_00008915
NET DEBT SERVICE

Date
Principal
05i01J2011
1li0112011
05!0U2012
1 t.'01J2012
05!01i2013
1'.'012013
05!01/2014
jl/0112014
05101i2015
1/0112015
05i01l2016
11/01,2016
05/01l2017
11/0112017
0510112018
J/0112018
0510112019
11!01:2019
05101!2020
11.'0112020
7.440,000
Interest
2.039.957
2,654.706 25
2,654,706 25
2.654,706.25
2,654.706.25
2,654 706.25
2 654 706 25
?.385.000
13.860.000
9.455.000
10.190.00[)
10.980.000
11.830.000
75,000,000
2.43-1,506 25
2,194,956 25
2 1!<4,956 25
1.944.156.25
1,'344,156.25
1,645,131.25
1.645,131 25
1,278.750.00
1.278,750 J{l
883,887.50
883,887.50
458,412.50
458.41250
37,587,089.13
Oct 26. 2010 12:35 pm Prepared by DBC Finance
CONFIDENTIAL
General
Fund
Debt ServicE!
Reserva Fund
as
2.639.957.88
2,654.706 25
:2.431.506.25
8,"'60.000
Total
Debt Service
2.654.706 25
2.654.706 25
10,094,706 25
2,431,506 25
10,316,5G6.25
2,194.956 25
10,554.956 25
1,944, '56 25
25
1,645,13'1.25
11,100,':}1.25
1,276,750.00
11,468.750 co
883.887.50
11.863,8a7 50
458,412.50
12,288,412.50
1 \2,537.089.13
[38.511 55)
(35,193.16\
73.704.71
31 874.78
31.874.78
31 874.78
Capitalizad
Interest Fund
2,639,957
2.654,706
2,661,343
2,650,024
2,549.126.76
10,062,1331.47
Jl 874.78
13.323.658.54
Annual
Net DIS
88
25
02
63
2,399,1331.47
10,284.631.47
2,163,081.47
10,523,081.47
1.912.281.47
10,772,281.47
1.613,256.47
11,068,256 47
1.246,875.22
11.436,875 22
852-012 72
\1.832.012.72
426,537 72
(493,374.78)
31 874.78
31 874.78
3187473
31,874 79
31.874.78
31 874.78
31,874.78
31,874.78
31.874.78
31,874 78
31,874.78
31.874.78
31.874.78
12,781.787.28
0 00
""
Debt Service
10,614,031 78
88,649.398 81
12,611 ,'158.23
12,684,262.94
12.686,162.94
12,684.562 94
12,681,512.94
12,583.750.44
12.684.02544
[66,837.06)
88,649,398.81
(1: i ... \rflode islandifi econom1c development corp',deal fi/es 1.38 studioslquant'.riedc.-R/EOC-201 0)
Page 7
BCI_00008916
DEBT SERVICE RESERVE FUND


Date
11/01/2011
Deposit
12,749,912.50
11/01/2012
11/01/2013
11/01/2014
11/01/2015
11/01/2016
11/01/2017
11/01/2018
11/01/2019
11/01/2020
Interest
@0.5%
Principal
(63,749.56)
(53,749.56)
(63,749.56)
(63,749.56)
(63.749.56)
(63,749.56)
(63,749.56)
(63,749.56)
(12,813,662.06)
63,749.56
63,749.56
63,749.56
63,749.56
63,749.56
63,749.56
63,749.56
63,749.56
12,749,912.50
637,318.52
12,749,912.50
Average Life (years):

Yield To Receipt Date:
Arbitrage Yield
Value of Negative Arbitrage:
Oct 26, 2010 12:35 pm Preoared by DBC Finance
Debt Service
(63,572.48)
63,572.48
63,749.56
12,749,912.50
CONFIDENTIAL
Project Fund
(63,572.48)
Balance
12,749,912.50
12,749,912.50
12,749,912.50
12,749,912.50
12,749,912.50
12,749,912.50
12,749,912.50
12,749,912.50
12,749,912.50
(13,323,658.54)
9.9972
0.5000002%
7.4216048%
6,152,095.47
(I:L. '.rhode island'Ji economic development corp\deal files\38 studios\quant\riedc."RIEDC-2010) PBge 8
BCI_00008917
CAPITALIZED INTEREST FUND


Date
Deposit
Interest
@0.25%
Principal
Project Fund
Debt Service
10,604,076.63
13,181.46
9,955.15
6,636.77
05!0112011
11101120!1
05101/2012
1110112012
10.604.076.63
2,639.957.88
3,31838
2,654.706.25
2,654,706.25
2,654,706 25
33,091.76
10,604,076 63
Average Life (years)

Yield To Receipt Date
Arbitrage Yield:
Value of Negative Arbitrage:
Oct 26, 2010 12:35 pm Prepared by OBC Finan';e
CONFIDENTIAL
2,639,957 88
{13,1B1.46)
[9,955.15)
(3,318.38)
2,654,706 25
2,654.706.25
2,654.706.25
(9,955 15)
10,604.076.63
(6,636.77)
(23,136.61)
Scheduled
Draws
Balance
10,604,076.63
7,964,118.75
5,309.412.50
2,654.706.25
1.2483
0.2500004%
7.4216046%
883,200.45
(l:i ... lrhode islandl!"i economic development corp ideal files\38 srudios\quant\riedc:RIEDC2010}
Page 9
BCI_00008918
FORM 8038 STATISTICS


11/02/2010
11/02/2010
Dated Date
Delivery Date
Bond Component
Date
Redemption
at Maturity
Principal
Coupon
Price
Issue Price
100.000
100.000
100.000
7,440,000.00
7,885,000.00
8,360,000.00
7,440,000.00
7.885,000.00
8,360,000.00
2015 Term Bond:

11/01/2013
7.440,000.00
11/01/2014
7.885,000.00
11/01/2015
8,360,000.00
6.000%
6.000%
6.000%
11/01/2016
8.860,000.00
6.750%
100.000
8,860,000.00
8,860,000.00
9,455,000.00
7.750%
7.750%
7.750%
7.750%
100.000
100.000
100.000
100.000
9,455,000.00
10,190,000.00
10,980,000.00
11,830,000.00
9,455,000.00
10,190,000.00
10,980,000.00
11,830,000.00
75,000,000.00
75,000,000.00
2016 Serial Bond:
2020 Term Bond

11101/2017
11/01/2018
11/01/2019
11/01/2020
10,190,000.00
10.980,000.00
11.830.000 00
75,000,000.00
Final Maturity
Entire Issue
Proceeds
Proceeds
Proceeds
Proceeds
Maturity
Date
Interest
Rate
Issue
Price
Stated
Redemption
at Maturity
Weighted
Average
Maturity
Yield
11101/2020
7.750%
11,830,000.00
75,000,000.00
11 ,830,000.00
75,000,000.00
6.8458
7.4216%
used for accrued interest

used for bond issuance costs (including undeTWriters' discount)
used for credit enhancement
allocated to reasonably required reserve or replacement fund
CONFIDENTIAL
0.00
1 ,284,065.00
562.935.45
12,749,912.50
(!.\. ..'.rhode is/and\ri economic development corp \deal fifes\38 studios\quant\riedc:RIEOC-2010) Page 10
BC1_00008919
PROOF OF ARBITRAGE YIELD


Present Value
to 11/02/2010
Date
05/0112011
11/0112011
05/01/2012
11/0112012
0510112013
1110112013
0510112014
11/01/2014
05101/2015
11101/2015
05101/2016
11101/2016
05101/2017
1110112017
Debt Service
@ 7.4216048%
2,639,957.88
2.546.014.74
2,654,706.25
2,654,706.25
2,468,632.23
2,654.706.25
2,295,135.90
2,213,015.27
8,114,049.08
1,884,496.52
7,709,542.40
1,581,604.27
2,380,303.86
2,654,706.25
10,094,706.25
2,431,506.25
10,316,506.25
2,194,956.25
10,554,956.25
1,944,156.25
7,333,383.62
1,645,131.25
1 ,302,432.24
6,978,962.01
1 ,024,652.34
11,100,131.25
1,278,750.00
11,468,750.00
883,887.50
11,863,887.50
458,412.50
12,288,412.5{)
6,666,227.07
740,480.53
6.403,539.40
475,857.59
6,158,614.66
229,450.21
5,930,670.61
112,587,089.13
74,437,064.55
10,804,156.25
0510112018
11101/2018
05/01/2019
11/01/2019
05/01/2020
11/01/2020
Proceeds Summarv
Delivery date
Par Value
Arbitrage expenses
11/02/2010
75.000,000.00
{562,935.45)
Target for yie!d catculatiOn
74,437,064.55
Oct 20, 2010 12:35 pm Prepared by OBC Finance
CONFIDENTIAL
(l:t .. \rhode isiand\ri economic development corp'.dea/ (i!es\38 studios\quant\riedcRIEDC-2010) Page 11
BCI_00008920
,---------------------------------------------------------
UNDERWRITER'S DISCOUNT

Average Takedown
Management Fee
Placement Agent's Counsel
NetRoadshow
CUSIP
SIFMA
DTC
lpreo
Miscellaneous Expenses
Oct 26, 2010 12:35 pm Prepared by DBC
CONFIDENTIAL
$11000
Amount
6.25000
1.00000
0.10000
0.00260
0.02000
0.00267
0.04560
0.03333
468,750.00
75,000.00
75,000.00
7.500.00
195 00
1,500.00
20000
3,420.00
2,500.00
8.45420
634,065.00
1.00000
(l:l .. '.rhode island\ri economic development corp\deal files\38 studios\quanMedc:RIEDC-201 0) Page 12
BCI_00008921
Project Copernicus
Assessment Summary and
Recommendations
Assessment team
The initial assessment team was comprised of:
0
Charles Nugent, Project Manager, IBM
George Dolbier, Interactive Media Specialist, IBM
Bill Le Voir-Barry, Agile Specialist, IBM
Smith Young, Architecture Specialist, IBM
Scott Abate, Project Manager, 38 Studios
The team was onsite from January 24th through February 18th, during which time 15 interviews were conducted with
select individuals from the studio.
, - - - - - - - - - - - - - - - - - - - - - - - - - - --- ------
Assessment summary: areas of focus

The initial assessment focused on the following areas (as defined by the statement of work):
v' Program Management
v'
Change Management
v'
Risk Management
v'
Issue Management
v'
Financial Management
v' Requirements
v' Architecture
v' Lifecycle & Releases
Assessment summary: the strengths

./ Excellent morale, one of the best we have
seen
./ High quality staff, both in depth and
experience
./ Highly effective evaluation process for either
building, modifying or buying game technology
./ Highly collaborative and productive work
environment
./ Integration of tools into a unified

development environment exceeds the
industry norms
./ Innovative and industry leading audio
design will put Copernicus ahead of the
MMO pack
./ Successfully reduced the ego-centric
nature prevalent in the
("check your
ego at the door" is working better than other
gaming organizations)
./ Exceptional, top-level creative talent

./ Using a highly recognized development
process in the
Serum
./ Highly progressive work environment with
respect to: communications, feedback and
ethical business guidance
./ No pressure for premature release date from
an external publisher
./ Continuous integration process is mature

and effective, allowing productivity levels
above the industry norms
./ Based on the state of the MMO industry,
the software stack is best in breed
Assessment summary: the opportunities

0 Almost no one developing Copernicus has seen or
read the pitch book (a unified, high-level project vision)
leading to conflict and prioritization issues
0 In-ability for anyone to work remotely impedes

ability to utilize high valued I short supply talent, in
addition to offsite production collaboration
0 Some of the staff and leadership behavior was

observed to be contrary to stated goals- i.e. believing
a goal to be unreasonable, "believing" a goal should
change. It was observed that in lieu of communicating
feedback, decisions being made were contrary to
stated goals
0 Absence of a clear critical path document or

exposure to the pitch book, is impacting the crews
ability to produce.
0 No Economics team, and NOC, Operations,

Software as a Service, security & support teams still in
their infancy. An MMO requires equal attention to all 3
domains to be successful- Financial, Game & Support
0 Change Management: Current check-in method
utilizing just a main code branch, endangers entire
project
LJ Game Decisions being made by very competent
professionals with deep industry experience, but the
decisions are being made in a vacuum without any
input from MMO Marketing expert sources or checks
against current state of the industry, or business needs
LJ Centralized Documentation becoming an

impediment to production. Information not available in a
timely fashion; Specifications, designs not easily
discoverable and usable (Feedback from Interviews
Only)
U Only a "single" Product Owner which potentially

provides an impediment I bottleneck in communication
and ownership of Copernicus Vision. Risk- If Product
Owner leaves the project for any reason, it will
dramatically impact the delivery I vision of Copernicus
0 Opaque financial communications may be
contributing to misinformed and potentially detrimental
decision making
-----------
Assessment summary: the opportunities (continued)

Q The move from Massachusetts to Rhode Island is
an event that 38 Studios, believes, incorrectly, will not
impact project timeline
Q Software Security is not formally or systematically
addressed, Understanding of service, and software
security is not well demonstrated. 38 studios does not
have an individual or team with primary responsibilities
for security.
Due to state of "infancy I immaturity" of collecting

development metrics, impacts their understanding of
development costs and development ROI
Q
Goals (38 Studios Version of Agile User Stories)

are still too large- i.e .. , at "Epic" Level in many cases.
Not being decomposed enough causes ambiguity and
improper rating of Biz Value. Current usage of Biz
Value is providing false burn rate, as goals are not
decomposed enough- thus, providing false ROI
Q
Q Major functional requirements are being deferred to

non-existent organizations within 38 Studios
Many 38 Studios Crews are operating

independently to produce their output, and at this time
in the project, teams of crews should be producing I
collaborating with each other on large aspects of the
game. Example: Zone Art & Zone Music should be
integrated at monthly review instead of independent
demonstrations
Q
Q "I have an idea what needs to get done (To

improve technology) ... but it is still in my head."
(Product Owner)
Q Using em ails for Serum Master Communications

creates an overload and in-effective method for
coordination.
Q
The current serum team management system will
increasingly impede development as the company
grows
Recommendations: Program Management,

Change Management
Assessment
Establish Sub-Product Owners to Support
Product Owner
Recommendation
By Utilizing More Product Owners, you remove
barrier of communication vision. as well as
remove risk of loosing only source of game
completion "knowledge" (Risk)
Assessment
No Assessment Vision into how Deliverables,
Artifacts, Game Designs, etc .. are managed in
Wiki. No Assessment Vision into how
documents I artifacts flow through SCRUM
crews and between SCRUM teams.
Recommendation
Assessment results have been based on
"hearsay," and interviews indicate that Wiki is
not well maintained I and I or hard to use.
Recommendation
As Release Management (and Operations)
becomes established, need to begin introducing
procedural overlay with SCRUM to define
waterfall type milestones, for example,
requirements review, design review, system and
acceptance testing.
Assessment
Not having a clear vision of the end game is a
barrier to SCRUM. Planning and estimating
dates becomes conservative
Recommendation
Create a backlog item to "Sanitize" and update
the pitch book. Make the result available to all
staff. This document typically serves the
purpose of 9iving the entire development team a
sin9ular. unified, and clear vision of what the
proJects goals are
Assessment
Many 38 Studios Crews are operating
independently to produce their output, and at
this time in the project, teams of crews should
be producing I collaborating with each other on
large aspects of the game. Example: Zone Art &
Zone Music should be integrated at monthly
review instead of independent demonstrations
Recommendation
Utilize an Agile Meeting Method - 1 hour
Standup between Product Owner, Sub-Product
Owners. Creative Directors and Serum Masters
to bring development completion collaboration
and impediments to forefront among all crews I
leadership
-------
- -=='=-:=
'"
Recommendations: Risk Management Management,

Issues Management
Assessment
There are twice as many artists I designers as
engineering staff. This creates a bottleneck
between Designer I Artist - and Engineering
Staff. High probability this will impact deliverable
timelines
Recommendation
Insure Hiring of Engineering Staff is a Priority
wlin 38 Studios Leadership
Assessment
Increase Number of Risk Assessment I
Deferrals During Sprints
Recommendation
During Each Sprint, Utilize Two Sprint
Assessment I Deferral Checkpoints
Assessment
Marketing Team not in P.lace to support 38
Studios Copernicus Project. This is a Risk as
Development of Game oeing performed in a
"Vacuum"- i.e .. , Limited Access to the Gaming
Business Market Research and Interpretation
Recommendation
Consider immediately working with external
research firms that focus only on the business of
games - while aggressively liiring Marketing
Staff
Assessment
As the numbers of crews grow in size, how will
communications and issues be raised,
addressed, and handled?
Recommendation
Institute a Visionary, Product Owner & Serum
Leader 1 hour, Weekly Standup Meeting to
Compile Cross Crew Discovery I Needs; Cross
Crew Impediments, and also engage Operations
I Release Management when Appropriate.
Assessment
Sprints are Long - Currently 4 Weeks
Recommendation
Decrease Length of Sprints to Two Weeks.
Additionally, increase the number of
Assessment Opportunities during the Sprints.
Recommendations: Financial Management,

Requirements
Assessment
At the time this report was finalized, financial
information had not yet been compiled
Assessment
At the time this report was finalized,
requirements information had not yet been
reviewed
Recommendation
Schedule an interview with the CFO and obtain
access to the wiki during the follow-up
assessment
Assessment
It was observed and recorded in interviews that
38 Studios waited too long to begin the process
of implementing Voiceover.
Recommendation
Sub-Contract Outside Voice Experts I MMO
Voice Experts immediately to provide technical
direction to close this gap
Assessment
SCRUM backlog is not organized; can't see
relationships ana notes; makes planning difficult
Recommendation
Introduce a Product that can keep tasks, and
coordinate items between products, tasks,
goals, etc
Assessment
Huge parts of game not defined.
Recommendation
Using the Plot as the baseline, determine which
parts of Chapters 1-4 are still undefined.
Recommendations: Architecture
Assessment
Only beginning to get .event functionality ... a
game cfiapter 1s a senes of end game events
Recommendation
Handling Events is a major game function,
establisfl a repeatable pattern for handling
events in softWare and, if available, procure
software early in the development cycle that will
facilitate
Assessment
Problems with customer service- it is in it's
infancy
Recommendation
Solve during early design of the game if to
develop in-house solution or to identify hooks if
outsourced. Needs to be coordinated with
procurement and integration of Game Master
software
Assessment
MySQL database rollback with cache creates
unacceptable user problems
Recommendation
Oracle provides superior rollback (transactions
to a checkpoint) capability where solid state
technology can be added for performance
Assessment
Platform group needs to implement Business Intelligence,
Bl, system for online monitoring
Recommendation
Platform to host the data warehouse supporting Bl would
require 1) a new TCP interface for "online" monitoring of
game ana/or 2) an Enterprise Service Bus (ESB) proauct to
extend Bl serv1ces
Assessment
Big World mods in support of the Helios connector is the
main 38 Studios devefopment. Many dependencies on
connector
Recommendation
Develop schedule (waterfall if necessary) for a GA release;
stable and having passed essential systems integrations
tests. Continuation of BigWorld mods indicate that too many
requirements are allocated to connector (instead of platform
and/or BigWorld server).
Assessment
Analytics system not yet specified.
Recommendation
As much as 80% of Bl can be collected by web analvtics
requiring remaining 20% to be collected by BigWorld server.
1) Consider and evaluate "web analytics" software (IBM
Cormetrics and Adobe market leaders) where code would be
inserted into Unreal client. Early imr>lementation is required
as very difficult to retrofit into _game. 2) BigWorld Server to
collect Bl statistics moved to Bl data warenouse hosted and
maintained by Platform group.
.---------
---------
--
Recommendations: Architecture (continued)

Assessment
Game Master, GM, tools and implementation in support
of customer service
Recommendation
Early implementation is required as may be very difficult
to retrofit into game. Need to begin defining GM role and
other interfaces, such as access to Bl.
Assessment
Database performance issue: review of the Bigl/l!orld
MySQL table structure and performance profiling finding
queries with large SQL joins
Recommendation
1) In addition to BigWorld, consider and evaluate
replacing MySQL with a high performance database for
both Helios and future data warehouse, 2) Need Entity
Relationship Diagram, ERD, (from vendor) to fully
understand logical model.
Assessment
Have not found many architecture diagrams
that document interfaces between systems
Recommendation
Acquire diagrams from different groups to
include 1) game client-server, platform,
release management, operations, and user
support, 2) 38 Studios roles consisting of
Narrators, Designers, Artists, Engineers, QA,
and in the future Bl Analyst, Operators, Game
Master, and User Support
Recommendations: Lifecycle & Releases

Assessment
PerForce supports branching, currently not utilized
Recommendation
Observation that "running the game and testing requires
collaboration and merging of 1) data, 2)code, and 3) art
usually from different machines." Recommend setting up a
separate branch(s) in PerForce to support a specific
environment(s) for specific crews to expedite testing the
game where by the data, code, and art can quickly and
iteratively be tested on the same machine as a branch
under development. Later, the respective branch and
integrated can be migrated into the baseline for smoke
testing.
Assessment
With regard to release management and QA staging,
need to figure out how different when live
Recommendation
In addition to current QA-Staging-Live environments
may need to add environments for Live (future), Live
(current), and Live (grandfather) where Live (current)
becomes a fall back alternative after going to Live
(future). Agile may promote to Live future more
frequently than expected putting requirements for
additional QA testing.
Assessment
Need 20Kbs bandwidth between servers to support the
required engineering data to support cross realm
Recommendation
Make
between realms a systems stress test
requirement
Assessment
Need better QA coverage for builds and automated
testing, i.e., need tools beyond smoke testing
Recommendation
Growth of 38 Studios will require a serious
consideration of commercial tools to include required
skills and the respective impact on hiring
Assessment
Scripted Python sessions for scalability of testing
Assessment
Recommendation
Scripted Python sessions for scalability of testing
Consider replacing Python scripts with automated testing
tool, especiallY for stress testing involving thousands Recommendation
of concurrent players
Consider replacing Python scripts with automated
testing tool, especially for stress testing involving
thousands of concurrent players
---------------
= - -"S:
.lj.;a
----- ..
----
!o'Ll""
Recommendations: Lifecycle & Releases (continued)

Establish a visionary, and have several product owners reporting to the visionary:
Visionary
Product
Owner2
Product
Owner1
'
L
l
Product
Owner3
SCRUM
SCRUM
SCRUM
SCRUM
leader
leader
leader
leader
---"--------
'"'" J-'"'"
SCRUM
SCRUM
0oductsV

Allow different crews to collaborate on user stories:
Many-to-many relationships between crews and epic/user stories
SCRUM Leader
g?
___ r::-:__
I
Crew B
__ } ___
'Epic/user story'
I
I
------- - -
Current SCRUM Problem:

1) Ambiguity
2) Testable
3) Current goals (as epics) too general
4) all goals, now synonymous with crews
ownership, on the same monthly cycle
_j
_ __ L __
- - -
- - -.
IEpic/user story!
Epic/user story!
'Epic/user story'
I
I
I
I
-------
!
I
----- -----
--
I
I
----

Implement a Agile/Serum tool:
Agile tool that greatly assists communication, enforces rules for defining Epic, User Story, Task,
and Crew to include MoSCoW rules, and encompasses project management- all within a single
configuration management environment.
-Example of SCRUM epic used to derive a user story tor a creature behavior qualified with a
MoSCoW business rule that is further allocated to tasks
for
type of object to chango
location
Derive user storv with

MoSCoW rule, e.g., control
pace for change of location
Crew
Crew A
L_
pace is for
motion to walk, not run

Utilize user stories:
Tasks by User Story

For example, a user story for character, environment, and technical
artists to develop player avatar.
0
Character Artist
Crew A
Ar_-
Nee
=:t
)
Creahmti
User Story: Creature

3-D effects
1)mood
2) event transition state
3) zoom
4) day or night
Environmental Artist
Crews
A11dio
Technical Artist
Crewe
Additional Recommendations: Grow the operations

organization
CEO '
,,
'
''
Studios GM :
, Vl" Of
c<,
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' ', 1
'
'
'
'
CRMIGM ' :is
' 0
'
'
um'
'
'
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Live
:
,
Network Admin
Corp IT
PQ/desktop support
Corp systems
Stud10 networking
(contrao!Qr)
--
--------
-------------
--------------------------------
Next steps
0 IBM will schedule a formal presentation of assessment
0 38 Studios will respond with an action plan based on the recommendations
0 IBM will return to 38 Studios for follow-up assessments on a quarterly basis beginning in July of 2011

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TABLE OF CONTENTS

Rhode Island Economic Development Corporation

Sources and Uses of Funds

Bond Summary Statistics

Bond Debt Service

Net Debt Service

Debt Service Reserve Fund

Capitalized Interest Fund

Form 8038 Statistics

Proof of Arbitrage Yield

Ocr 26. 2010 12:35 pm Prepared by DBC Finance

(1:, ... \rhode is/and\ri economic development corp\dea/ files\38 studios\quant\riedc:RIEDC-2010)

SOURCES AND USES OF FUNDS

(38 Studios, LLC Project), Series 2010

Other Fund Deposits:

Delivery Date Expenses:

Oct 26, 2010 12:35 pm Preoared by DBC Finance

econom1c development corp',deal files\38 studfos\quent\riedc:RfEDC-2010) Pege 1

BOND SUMMARY STATISTICS

Average Life (years}

Underwriter's Fees (per $1000)

Total Underwriter's Discount

Oct 26, 2010 12:35 pm Prepared by DBC Finance

2015 Term Bond:

2016 Serial Bond:

2020 Term Bond

Oct 26, 2010 12:35 pm Prepared by DBC Finance

BOND DEBT SERVICE

Rhode Island Economic Development Corporation

(38 Studios, LLC Project), Series 2010

Ocr 26_. 2010 12:35 pm Prepared by DBC Finance

BOND DEBT SERVICE

(38 Studios, LLC Project), Series 2010

Oct 26, 2010 12:35 pm Pre{Jared by OBC Finance

Av!!rage L1fe :years)

Oct 26, 2010 12:35 pm Prepared by DBC Finance

NET DEBT SERVICE

Rhode Island Economic Development Corporation

Oct 26. 2010 12:35 pm Prepared by DBC Finance

DEBT SERVICE RESERVE FUND

(38 Studios, LLC Project), Series 2010

Average Life (years):

Oct 26, 2010 12:35 pm Preoared by DBC Finance

(I:L. '.rhode island'Ji economic development corp\deal files\38 studios\quant\riedc."RIEDC-2010) PBge 8

CAPITALIZED INTEREST FUND

Rhode Island Economic Development Corporation

Taxable Revenue Bonds

Average Life (years)

Oct 26, 2010 12:35 pm Prepared by OBC Finan';e

FORM 8038 STATISTICS

Taxable Revenue Bonds

2015 Term Bond:

2016 Serial Bond:

2020 Term Bond

used for accrued interest

Oct 26, 2010 12:35 pm Prepared by DBC Finance

PROOF OF ARBITRAGE YIELD

(38 Studios, LLC Project), Series 2010

Target for yie!d catculatiOn

Oct 20, 2010 12:35 pm Prepared by OBC Finance

(l:t .. \rhode isiand\ri economic development corp'.dea/ (i!es\38 studios\quant\riedcRIEDC-2010) Page 11

(38 Studios, LLC Project), Series 2010

Oct 26, 2010 12:35 pm Prepared by DBC