Star Citizen Discussion Thread v11

[PiLhEaD]

The whole Forbes article (from December 2018) makes interesting reading. Here's the part on GiG's financials -

"Star Citizen’s six-year development—longer than the standard three-to-four years for many games—and missed release deadlines have sparked doubts from some of the 2 million fans that donated to the project, including the plaintiff in a recent small claims lawsuit demanding a refund. On Thursday, Cloud Imperium released financial data that shows the company using up most of its cash every year, thanks to a ballooning workforce.

By the end of 2017, the company brought in a total of $207 million and had spent $193 million since 2012. Capital on hand at the end of 2017 fell 26% to $14 million from the prior year. Total income—made up from fan pledges, its subscription pass and fan events like its annual CitizenCon event—has been consistent the past three years, with the company bringing in $44 million in 2017.

The majority comes from fan pledges. Backers can no longer directly donate to the company; they now receive something in return, be it the early-access version of the multiplayer for $45 or purchasing in-game assets like starships whose costs can rise into the hundreds of dollars. This year, the company matched 2017’s $35 million, calling December its best ever month for pledges.

The highest expenditure is on its staff, of which 85% were developers last year. With a headcount of 464 across five studios in 2017, salaries cost the company $30 million. Staff size has since grown to over 500. Other costs associated with development made up the second-largest line item, at $10 million."

 

[sovapid]

Even if we knew how badly CiG needed the cash injection it would hard to speculate on the actual terms, but, having to fund (any) repayment schedules out of ship sales* would naturally reduce real-money available to fund the development, which aligns with Mole's observations and concerns.

lol, they took an equity position in CIG, it wasn't a loan.....

 

[Asp Explorer]

lol, they took an equity position in CIG, it wasn't a loan.....

It still isn't a game

 

[PiLhEaD]

lol, they took an equity position in CIG, it wasn't a loan.....

Broadly, any investment into a company is a form of loan. That's precisely the reason behind stocks and shares, to enable businesses to borrow money, by exchanging shares (a 'promise to pay' interest in the form of dividends and share issues) in return for cash investment. Those shares are also (typically) redeemable to recoup the investors' initial capital outlay. Obviously shares are a more risky investment than typical fixed rate loans, which is why investors expect a better rate of return, ideally combined with capital growth.

Calders' have a 10% stake that clearly has terms and conditions attached. They will expect to see a suitable return for their risk. We have no idea what the t&c's of their investment is. If CIG was in a bad state these terms could be worse than a straight commercial loan, particularly if the lenders of first resort (banks etc) weren't interested. CiG wouldn't be the first business to have this problem.

I'm not saying CIG are foundering, but Calders money isn't for free. And you can take that to the bank.

 

[Mole HD]

Welp...storm Dennis has hit with a vengeance early this morning...winds gusting to 80mph which has cut the mains power again, my wind turbine has stopped since it has a built in safety feature and it stops generating when winds are over 45mph, although I have enough stored electricity from it to last a day or 2.

I'm back to running from the 12.5KVa diesel generator again...just as well I went with triple redundancy for the power. I'm guessing there'll be no ferries until the winds subside too

I took these yesterday up the north end of the island when the wind was a mere 45mph... one of these days when nature can make you feel very small.

 

[Agony_Aunt]

CiG could be buoyant, in good health, with dynamic management and under full sale

Funny typo there. I think you meant sail

 

[sovapid]

Broadly, any investment into a company is a form of loan. That's precisely the reason behind stocks and shares, to enable businesses to borrow money, by exchanging shares (a 'promise to pay' interest in the form of dividends and share issues) in return for cash investment. Those shares are also (typically) redeemable to recoup the investors' initial capital outlay. Obviously shares are a more risky investment than typical fixed rate loans, which is why investors expect a better rate of return, ideally combined with capital growth.

Calders' have a 10% stake that clearly has terms and conditions attached. They will expect to see a suitable return for their risk. We have no idea what the t&c's of their investment is. If CIG was in a bad state these terms could be worse than a straight commercial loan, particularly if the lenders of first resort (banks etc) weren't interested. CiG wouldn't be the first business to have this problem.

I'm not saying CIG are foundering, but Calders money isn't for free. And you can take that to the bank.

hahahahahahaha

 

[Wotthe Dickens]

Welp...storm Dennis has hit with a vengeance early this morning...winds gusting to 80mph which has cut the mains power again, my wind turbine has stopped since it has a built in safety feature and it stops generating when winds are over 45mph, although I have enough stored electricity from it to last a day or 2.

I'm back to running from the 12.5KVa diesel generator again...just as well I went with triple redundancy for the power. I'm guessing there'll be no ferries until the winds subside too

Yep, it’s blowing pretty hard down here on the south coast too! Take care Mole!

 

[Tuub t Tute]

Welp...storm Dennis has hit with a vengeance early this morning...winds gusting to 80mph which has cut the mains power again, my wind turbine has stopped since it has a built in safety feature and it stops generating when winds are over 45mph, although I have enough stored electricity from it to last a day or 2.

I'm back to running from the 12.5KVa diesel generator again...just as well I went with triple redundancy for the power. I'm guessing there'll be no ferries until the winds subside too

I took these yesterday up the north end of the island when the wind was a mere 45mph... one of these days when nature can make you feel very small.

I saw the footage of that CalMac docking at Ardrossan and thought of you! Hunker down and stay safe out there.

 

[Viajero]

But what would they, or anyone else, do with it?

Sell it all to another sucker investor for more than what you paid for it of course, that is how in normal businesses you usually get your share return (that and dividends) if the company performs well.

 

[Skizomeuh]

But what would they, or anyone else, do with it?

You've got a few ship models, endless jpegs, ancient mocap footage, a script written by someone who can't write scripts, someone elses Vision and very little else.

Add:

• Months of making-of footage they could use for a Lost in la Mancha documentary.
• An army of gullibles they could sell data of.
• I bet they could even sell the project to some gullibles so they can finish it themselves (and those will praise and forget to sue Roberts family)

 

[Viajero]

hahahahahahaha

I for one highly doubt that the Calders have simply invested in equity, in the regular way. I mean it is possible but there may be also very specific conditions to their investment that we are not privy to, such as preferred equity / returns and the like. Like forced dividends if you will. These would be usually taken from cash/profits after any loan repayments.

 

[metatheurgist]

I for one highly doubt that the Calders have simply invested in equity, in the regular way. I mean it is possible but there may be also very specific conditions to their investment that we are not privy to, such as preferred equity / returns and the like. Like forced dividends if you will. These would be usually taken from cash/profits after any loan repayments.

I hope their lawyer wasn't named Freyermuth.

 

[cheesenbiscuits]

I for one highly doubt that the Calders have simply invested in equity, in the regular way. I mean it is possible but there may be also very specific conditions to their investment that we are not privy to, such as preferred equity / returns and the like. Like forced dividends if you will. These would be usually taken from cash/profits after any loan repayments.

My theory is the Calders merely paid for the rights to the documentary. Now there’s a sound investment.

 

[StuartGT]

I for one highly doubt that the Calders have simply invested in equity, in the regular way. I mean it is possible but there may be also very specific conditions to their investment that we are not privy to, such as preferred equity / returns and the like. Like forced dividends if you will. These would be usually taken from cash/profits after any loan repayments.

Come on now, be realistic. During Summer 2018 the Calders were honoured to invest $46m into CIG and Chris' vision of a Squadron 42 release in 2020, with no terms for returns on their investment. It's not like the financials showed the company's in the red for $millions each year, nor Coutts demanded all UK assets and Sq42 IP as security for a payday loan in June 2017 (which is still outstanding).

 

[[VR] Mad Mike]

Welp...storm Dennis has hit with a vengeance early this morning...winds gusting to 80mph which has cut the mains power again, my wind turbine has stopped since it has a built in safety feature and it stops generating when winds are over 45mph, although I have enough stored electricity from it to last a day or 2.

I'm back to running from the 12.5KVa diesel generator again...just as well I went with triple redundancy for the power. I'm guessing there'll be no ferries until the winds subside too

I took these yesterday up the north end of the island when the wind was a mere 45mph... one of these days when nature can make you feel very small.

I love your photos Mole HD... you have a keen eye!. have you considered taking some to sell? I have bought images for our house which i dare say are no better than some you could likely take!.

 

[Agony_Aunt]

Come on now, be realistic. During Summer 2018 the Calders were honoured to invest $46m into CIG and Chris' vision of a Squadron 42 release in 2020, with no terms for returns on their investment. It's not like the financials showed the company's in the red for $millions each year, nor Coutts demanded all UK assets and Sq42 IP as security for a payday loan in June 2017 (which is still outstanding).

Wow, they still haven't paid back those loans yet?

Weren't they (according to CIG and backers) meant to simply be currency hedging loans or some other manure?

How can the company with such income and best funding year ever not be able to pay back those loans?

Aren't they having to pay interest on those loans? What about late repayment charges?

Would love to see the reaction on the SC sub to posting how they still haven't paid back loans from 2015 and 2017, and that Coutts still own the SQ42 IP.

 

[Vasea Azure]

Welp...storm Dennis has hit with a vengeance early this morning...winds gusting to 80mph which has cut the mains power again, my wind turbine has stopped since it has a built in safety feature and it stops generating when winds are over 45mph, although I have enough stored electricity from it to last a day or 2.

I'm back to running from the 12.5KVa diesel generator again...just as well I went with triple redundancy for the power. I'm guessing there'll be no ferries until the winds subside too

I took these yesterday up the north end of the island when the wind was a mere 45mph... one of these days when nature can make you feel very small.

Hold on to your socks Mole, or grab a surfing board!

 

[Red Anders]

The highest expenditure is on its staff, of which 85% were developers last year. With a headcount of 464 across five studios in 2017, salaries cost the company $30 million. Staff size has since grown to over 500. Other costs associated with development made up the second-largest line item, at $10 million."

Terrifying stuff that because it tells you that when they do need to draw their horns in on the spending front, the first option most companies consider (cutting staff) is already unavailable to them because they can't even maintain their internal timetables with the staff they have now. Well no, they probably could if the staff they had now were being managed in something that bore even a passing resemblance to a competent manner but as long as Chris is there to review everything down to npc hairstyles, that won't be happening.

 

[Skizomeuh]

Well they cut staff already, didn't they? Where are Erin and Sandi?