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38 Studios Isn't Solyndra

As soon as news broke of financial troubles at former Red Sox ace Curt Schilling's 38 Studios video game company, observers began comparing the firm to Solyndra. Former GOP gubernatorial candidate John Robitaille made the analogy just yesterday in an interview with WPRI-TV.

On the surface, the comparison makes some sense: the Obama Administration invested in Solyndra, the solar energy firm, only to watch it go bust - prompting questions about government picking winners and losers in the private sector. Rhode Island officials are facing similar questions after offering up $75 million in loan guarantees to 38 Studios in 2010.

But the cases are quite different. And the differences point to what made the Rhode Island deal so questionable in the first place.

First, the $75 million loan guarantee represented fully 60 percent of the guarantees the state could dole out under its $125 million Job Creation Guaranty Program. This was a big gamble on a single company with no track record. The Solyndra loan guarantee, by contrast, represented precisely 1.3 percent of the US Energy Department's $38 billion loan guarantee program. There is a massive difference, here, when it comes to spreading the risk.

Second, the investment in Solyndra was an investment in an industry that - should it flourish - will produce sizable gains for the country in the way of national security (reduced dependence on foreign oil) and environmental protection (ditto). These are, at least, defensible goals. The Dokkalfar (that's dark elves) of Kingdoms of Amalur: Reckoning serve no such function.

Robitaille made use of the Solyndra metaphor in order to tar the 38 Studios deal. But it's really the Solyndra deal that suffers unfairly in comparison.

Bonus coverage: read my 2010 piece uncovering the origins of the 38 Studios deal

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