I thought I had read that he had sunk a lot of his baseball fortune into the business.
This article is a long read from more than a decade ago but it tells the story of what went wrong with 38 Studios very well. In short, Schillilng was far out of his league trying to run a business of that size (as opposed to hiring people with actual business accumen to be the brains of the operation) and trying to make it go so big so fast. Starstruck Rhode Island officials lavished loan money on him sans due dilligence while his hubris-filled operation of the business was basically amateur hour.
And getting back to baseball economics, players are underpaid when they are most valuable (when they are younger) and overpayed when they are less valuable (younger). To change that, get rid of arbitration and make them eligible for free agency after three years of ML service time.