Game Discussions Star Citizen Discussion Thread v12

[Darkfyre99]

I would be interested in seeing that info in writing.
Dividends are only paid out, if the company has made a profit. At this stage there isn't any profit, or doesn't seem to be.
I wonder where the directors feel the profit has come from ?

CLOUD IMPERIUM GAMES LIMITED filing history - Find and update company information - GOV.UK

CLOUD IMPERIUM GAMES LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

 

[Xink]

No I wouldn't consider there to be any profit in that figure. The company should have a set wage struture, until there is a shippable product there isn't really any profit to pay dividends out.

The ships are the product. That's what sales figures means. They sold digital goods. They make profit off them.

You can argue "but they have not shipped a game" until blue in the face it won't change a thing. That's not how accounts work. The issue is the suckers that keep buying digital goods thinking something else will come after if only they keep buying. It won't.

 

[Bigmaec]

I mean, directors have to drive yachts eat, too.

Of course they need an adequate salary, or else they leave to a better paying company.

Someone with Chris Roberts' resume would be highly sought after by expert headhunters, right?

 

[Space Menace]

Anyone aware of how many people have bought in ?

The ships are the product. That's what sales figures means. They sold digital goods. They make profit off them.

You can argue "but they have not shipped a game" until blue in the face it won't change a thing. That's not how accounts work. The issue is the suckers that keep buying digital goods thinking something else will come after if only they keep buying. It won't.

I ran as 'Trading As' for my first 12yrs in business (from start up). The business got much larger so we had the business go Ltd for the final 19yrs that we owned the business. I know how a business and accounts work. My wife is a fully qualified accountant.

Out of curiosity I have given her the links, this looks very odd to me. I certainly would not be paying myself dividends if I hadn't delivered a product yet (he hasn't yet).
The directors have a legal responsibilty to expain where that profit came from within the companies finances, just to be able to pay dividends out. A question backers may be able to put to CIG, if enough got together and simply asked.
Would be very interesting to hear/read where they think what they regard as profit to pay dividends on.

To me at a quick glance under UK law, it could be construed as misappropriation. (just imo)

 

[Mole HD]

So, while refunds is having fun dissecting CIG's financial report, a refundian crossposted the thread to /r/sc (probably a bad move doing that rather than just posting the financials and it was downvoted and then locked, with the backers who got in before the lock giving the expected comments.

Fair enough, went looking and... I can't find any thread discussing the financials. Its almost like the backers don't want to know how their money is being spent!

So i head over to Spectrum and.... nobody is discussing it there either (unless its already been deleted by Nightrider and bans have been handed out).

Seriously, backers don't have any interest in reading about the financials of the company they have "invested" in?

Are none of them interested to read that the board are giving themselves dividends for an unreleased product? I mean, surely the faithful want to take a look and then ensure there is a positive spin on the results!

I can't say I'm particularly interested, it's blatant capitalism at it's finest. In a world where 90% of all politicians and business leaders are solely concerned with lining their own pockets...it means very little at the end of the day

 

[Navigare Necesse Est]

this might be my all time favorite interaction from playing SC......

Yeah, it's Shelley. Others play Civilization, too. Bit of intellectually more inspiring than the salt.

 

[Xink]

The original kickstarter backers might have a reason to ask where is their product. Everyone buying ships does not. They received their digital goods already, which were taxed on top. Or not, and made a pre-order. The authorities are pretty comfortable with this situation.

 

[VR Golgot]

I would be interested in seeing that info in writing.
Dividends are only paid out, if the company has made a profit. At this stage there isn't any profit, or doesn't seem to be.
I wonder where the directors feel the profit has come from ?

It’s all in the latest UK filing on companies house, for CLOUD IMPERIUM UK LTD:

CLOUD IMPERIUM UK LTD. filing history - Find and update company information - GOV.UK

CLOUD IMPERIUM UK LTD. - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

The use of the share premium reserve can be seen there in September 2020 too.

(NB I don’t think the filing history for CLOUD IMPERIUM GAMES LIMITED that Darkfyre shared has all that. It’s never straightforward with CIG )

Here’s some backdrop on the technique used:

So the short take is:

£1mil went out of the share account:

• It went to the directors (Chris, Erin, Ortwin, Sandi, Klein [the seeming broker of the Calders deal] & Nitsche [the Calders rep, who replaced Dan Offner in May 2019]).
• Cloud Imperium UK LTD would only use this technique for providing a dividend + present a solvency statement if they were running at a loss.

There's other interesting stuff and speculation in there. Like the US company could be doing fine, and dumping its debt on the UK side to get the best out of the tax credits or whatever.

But the short story does look 'a bit scummy' as one of them put it.

Running at a loss. Taking money out.

Spoiler: And some more…

The most interesting recent share game for potential personal profit was the $1M of Calder cash they seemingly moved out of the company:

So what they have in fact done, is moved £1m from the share premium account to a new special reserve, reducing the £23.7m to £22.7m in the share premium account.

Since the company is technically insolvent, there are restrictions on what they can do with cash they have, which they only have via the share premium account. Namely pay dividends.

Goodman Jones said:
A common frustration
A number of our private international clients – including Russian, Italian, Spanish and US companies – have seen real benefit from this change in Company Law.

We recently worked with a Russian group that owns a UK company with valuable intellectual property rights. The UK subsidiary did not have reserves large enough to pay dividends, but it held a fair amount of cash that it wished to distribute back to the parent. It also had a large share premium reserve. The group assumed it would be difficult to declare a dividend – as it would be in Russia. Specifically, they expected to be involved in a difficult and lengthy process involving large legal fees. Yet the directors were surprised by how easy and quick it was to create distributable reserves from their current structure and declare a dividend back to the parent company.

Another of our clients, an Italian fashion chain with a UK subsidiary, was historically loss-making because of its expensive location. The subsidiary had then started making profits, but again had insufficient reserves to declare a dividend. We advised the group to undertake a capital reduction in order to convert the share premium reserve into a distributable reserves. Although, they were aware that this could be done, they were concerned about the cost and the time commitment. They were staggered by the ease with which the process was completed.

The only logical reason to do this is if you want to take £1m out of the technically insolvent company that is only propped up by a recent infusion of capital. Very odd. If they do declare a dividend, it won't be public until December of the year after when the accounts are filed. Such a small amount though, perhaps they will repeat this process in future.

 

[Navigare Necesse Est]

Hah, no profit. What do you call 31,762,819 pounds turnover from sales? Chump change?

We call it turnover.

 

[Space Menace]

The original kickstarter backers might have a reason to ask where is their product. Everyone buying ships does not. They received their digital goods already, which were taxed on top. Or not, and made a pre-order. The authorities are pretty comfortable with this situation.

I don't think authorities would be very comfortable at all, if given the correct information.

The ship's bought are part of a package that you have for 'the game', not individually (or are they sold as individual ? ). The package is for Star Citizen the game inc SQ42 ? or am I mistaken ?

 

[Viajero]

Dividends are only paid out, if the company has made a profit. At this stage there isn't any profit, or doesn't seem to be.

Well, there is if you consider that what they are doing now is already "it", their product sold and released. It makes sense from CR´s own vision of a "playable now" product. They are marketing SC as a released game. They are also monetizing it to the teeth in ways that even the more aggressive p2w games can only dream of, including sharing those profits in dividends with the owners.

It would also obviously deserve to get in depth reviews and scores accordingly, like every other game similarly released, marketed and monetized, but so far CIG has managed to dodge that bullet, have their own cake and eat it, kudos.

 

[Xink]

or am I mistaken ?

You are mistaken. Ships are sold as DLC, digital goods, and are taxed individually.

 

[Space Menace]

Well, there is if you consider that what they are doing now is already "it", their product sold and released. It makes sense from CR´s own vision of a "playable now" product. They are marketing SC as a released game. They are also monetizing it to the teeth in ways that not even the more aggressive p2w games can only dream of.

It would also obviously deserve to get in depth reviews and scores accordingly, like every other game similarly released, marketed and monetized, but so far CIG has managed to dodge that bullet, have their own cake and eat it, kudos.

It's in early access, not released. (fully).

 

[Viajero]

It's in early access, not released. (fully).

Well, CIG has not stamped the label Early Access on the product as far as I can see, nor the released one. But the fact there are dividends being given to owners would indicate the product is already released and generating profits, and otherwise worthy of full on scored reviews.

 

[Space Menace]

You are mistaken. Ships are sold as DLC, digital goods, and are taxed individually.

Really that is very interesting.
I was under the impression they were added to your package as a whole (in your hangar as they used to say)

 

[Space Menace]

Well, the fact there are dividends being given to owners would indicate the product is already released and generating profits.

The fact there are dividends paid means nothing, think who authorises the pay out.

 

[Mole HD]

I don't think authorities would be very comfortable at all, if given the correct information.

The ship's bought are part of a package that you have for 'the game', not individually (or are they sold as individual ? ). The package is for Star Citizen the game inc SQ42 ? or am I mistaken ?

Ci¬G like to try and muddy the waters a bit regarding supposed cash 'pledges' to support the development of the project(s)...but basically, if you pay VAT or sales tax when making those 'pledges', it's a sale of digital goods...no matter what Ci¬G want to call it

 

[Space Menace]

Companies house site is down for maintenance today, would be wouldn't it...

 

[Space Menace]

So if I buy a ship today it isn't added as part of a package I may already have. Because when I bought further ships way back prior to refund, they were all added to my package as a whole. Has that changed then ?

 

[Viajero]

The fact there are dividends paid means nothing, think who authorises the pay out.

It means quite a lot because CIG pledged to reinvest all revenues back into development. Once the game was released all bets would be in principle off and CIG would be free to do as they saw fit obviously. But they seem to be doing exactly that now though, which would suggest that either

a) the product is released or
b) they are just going back on their promise of reinvesting all proceeds in the development and profiting personally from backers money, given in good will for development only.