It all started when I wrote a blog back in July 2015. It went downhill from there. Rather rapidly.
A SCAM IS BORN IN THE BACKDROP OF THE GREAT MAN MYTH
In Nov 2012, Chris Roberts, who had made some space combat games (his last game was in 1996) almost two decades ago, his wife (unknown at the time), and his attorney partner, Ortwin Freyermuth, announced the Star Citizen space combat game project. They were going to crowd-fund it. They first had it on their own website, but later moved to Kickstarter.
At the time, even though she was introduced as “VP of Marketing” (they have since removed this page from their website), nobody knew who Sandi Gardiner was, as it was kept a secret. She wasn’t credited as a co-creator of the project either. In July 2015 amid claims of nepotism, after she was revealed to be the wife (that’s her in this pitch video with their children) of Chris Roberts, she was then later credited as the co-creator of the project.
Having made a career (spanning almost 30 yrs, with a lot of peers and contacts) out of designing and developing space combat games, along with the very advanced engines that powered them, I have a lot of experience in that market. As a result, being a fan of all my fellow developers in that space, I was also a fan of Roberts’ games. So it was a no-brainer that along with almost 35K others, I backed the project in Nov 2012. That was when the scope was smaller, manageable, possible – and required $2M to develop.
Roberts promised to deliver the game in Nov 2014. He even went on several interviews claiming that he could put it off within that time limit, and that if it took longer, things would get stale:
“You have stated that you expect to have an Alpha up and going in about 12 months, with a beta roughly 10 months after that and then launch. For a game of this size and scope, do you think you can really be done in the next two years?
Really it is all about constant iteration from launch. The whole idea is to be constantly updating. It isn’t like the old days where you had to have everything and the kitchen sink in at launch because you weren’t going to come back to it for awhile. We’re already one year in – another two years puts us at 3 total which is ideal. Any more and things would begin to get stale.” – Chris Roberts, Oct 19, 2012
In mid 2015, through various industry sources (some were working on the project), I got wind of the Star Citizen project in trouble amid technical issues, rumors of mismanagement, inability to deliver on promises, backer money being wasted etc. So I started to investigate it. I got in touch with Roberts to try and get some more details from him. He ignored my inquiries.
So I continued with my research, and subsequently published that first blog in July 2015, Interstellar Citizens in which I stated the following opinion, which then got picked up by the media.
“Without disrespect to anyone, I’m just going to say it: it is my opinion that, this game, as has been pitched, will never get made.Ever.
There isn’t a single publisher or developer on this planet who could build this game as pitched, let alone for anything less than $150 million.
The original vision which I backed in 2012? Yes, that was totally doable. This new vision? Not a chance.
The technical scope of this game surpasses GTAV, not to mention the likes of Halo.
Do you have any idea what those games cost to make and how long they took?
Do you know how many games which cost $50 million to make took almost five years to release? And they were nowhere in scope as Star Citizen?“
Due to the fact that the majority of the industry – including the media – had started having concerns about the project, my blog was widely propagated. It got people talking. That aside from the fact that the media themselves had already started their own rumblings (1, 2, 3).
At that point, Roberts had raised over $87M Dollars based on nothing but promises. This was long after he had increased the scope of the project via stretch goals all the way up to $65M in Nov 2014 – the same month in which he had promised the game would be released.
After the blog hit, and the media stories started appearing, Roberts company, CIG, did the following :
- They canceled my backer account, and refunded me on July 13th. Without my asking.
- Then to make matters worse, they issued a press statement about my being refunded. In that, they also tried to make it look like I had somehow violated their ToS for the game and the website. This despite the fact that I had never – ever – used any of those services.
- Their community manager, Ben Lesnick, also made a public statement about it on the company forums.
All these actions were taken in obvious retaliation for the blog and the fact that it got widespread release in the media. All they did was made it worse by making themselves subject to the Streisand Effect. And so the media kept writing (1, 2, 3) about it. They bet on my being completely vilified for writing an opinion based and technical blog. And some people kept passing around the flawed narrative about there being a Smart v Roberts feud going back decades, and which was the impetus for my writing that blog. That’s nonsense.
“Roberts said he wished someone had sat him down, forced him to pick four or five things that it was important to do well, and focus on those.” – The Chris Roberts Theory of Everything, Gameranx, 2016
As time moved on, several people, some of who were still working on the project, others who had left, started reaching out to me to tell their stories. So I continued to write the blogs in the name of awareness and accountability.
In Aug 2015, I had my corporate attorneys in CA, send them a legal demand letter. In it, I ask them 1) to issue refunds for those requesting it, 2) provide financial accounting for the project, and 3) provide an accurate schedule for the delivery of the product to backers. They declined. And their response contained not only defamatory statements, but also attempts at deflection, making patently false statements about me etc, all which had very little to do with the matter at hand.
Subsequently, having received their responses in writing, which we wanted for the record, we decided to take a wait and see approach until ToS v1.2 expires on May 31st, 2016; which was the deadline for them to issue refunds, and provide financial accountability for not delivering the game as promised on Nov 2014.
In Sept, 2015, I received a cease & desist letter from Ortwin, in which he accused me of stalking because I had done research into the execs (all public figures), and published my findings. My attorneys subsequently sent a strongly worded response to them. That was the end of that nonsense.
Then on Oct, 2015, a gaming magazine, The Escapist, having done their own investigation, during which they got a few past and present employees to discuss what was going on with the project, published a scathing article entitled “Star Citizen Employees Speak Out on Project Woes”
In the same tone of the letter his partner Ortwin Freyermuth had sent to us back in August, in Oct 2015, Roberts published a highly defamatory diatribe entitled “Chairman’s Response To The Escapist“. It was targeted at me, The Escapist writer, and the magazine. And even though the Escapist article never even mentioned me, and publicly stated that I was never a source for the article, Roberts mentioned me over 24 times. Basically solidifying me as the bogeyman and blaming me for the growing unrest and dissent against the project. That diatribe turned out to be a rallying cry from Roberts to their toxic backers, who then proceeded to attack all of us, including CIG’s own very employees and contractors.
And then Ortwin subsequently threatened (the letter was later added to his diatribe above on 10/4/15) The Escapist with a lawsuit if they didn’t retract it. That, notwithstanding the fact that Freyermuth, as CIG partner, and fact witness to what is going on over there, sent the aforementioned semi-legal threat.
As I wrote in my The Money Laundromat blog, in late March 2017, we later found out that over two years later, CIG and Defy Media (owner of The Escapist) decided to settle their differences out of court; with both sides taking down their writings. I later obtained a statement from Defy Media, which is mentioned in the blog.
Then, as if out of a movie, CIG went on the narrative bandwagon that somehow they had been doxed, which was false. And that we had “brought their children” into the discourse etc. Also false. They had their kids in the original promo video; though at the time nobody even knew that Chris & Sandi were even married. And the images which someone found and shared on Twitter, were from online photos that Sandi had shared. The person who found them was trying to prove that they were in fact married (which they had hidden up to the point when it was uncovered), and that those were their children (also aspiring actors) as compared in the video.
Subsequently, the toxic backers of the project continued their on-going harassment and attack campaign against anyone (including media writers) who voiced any sort of dissent against the project. To the extent that several media articles (1, 2) have been written about specifically that subject. As it so happens, due to the monetization of the game, in which CIG tends to sell ship models and concept art for cash, a thriving Black market appeared on Reddit; and which most suspect is also a conduit for money laundering in which game assets are bought (with illicit funds) and sold. And those people with a lot to lose, are mostly the ones engaged in the harassment and attack campaign against dissenting opinions of the project.
And as much as some would like to make this a “Derek Smart vs Chris Roberts” thing, it’s not, and never was. The project’s success and/or failure, rest with Chris Roberts, and him alone. Historically, the same events playing out on Star Citizen, are the same events that led to him being kicked off his last project, Freelancer, by Microsoft. That was back in 1996 – which was when he had left the industry and gone to Hollywood to make movies.
“In the wake of the collapse of Digital Anvil, co-founder and soon-to-be-former CEO Chris Roberts has spoken about his decision to leave the company he founded just four years ago. As we suspected, the company’s troubles were down to “wanting to develop not only hugely ambitious games, but too many hugely ambitious games”, leaving the company’s finances stretched after four years without a single game being released – the sole title to emerge with the Digital Anvil name on it was actually mostly developed by a small British company.” – Eurogamer, July 2000
To make matters worse, over the years as it became obvious that they weren’t going to be able to deliver on promises, the company has been routinely altering the Terms Of Service and the End User License Agreement in a bid to continue stripping backers of rights they once had. I have been tracking every revision since I noticed what was happening.
ToS v 1.2 in which they promised to issue refunds and provide financial accounting, was updated in June 2016. That revision removed several key rights that backers previously had. That being, refunds for non-delivery, financial accountability for the project, and not having to even deliver the project. Seriously.
Following the 2016 ToS revision, some backers decided they’d had enough; and using all the researched I had collected and posted online, they decided to take action to get their money back. The resulting fiasco opened the floodgate for refunds, due to CIG having created a huge legal liability for themselves with that ToS change. And shortly thereafter, a refund focused sub Reddit dedicated to assisting backers wanting to get their money back was created.
In Jan 25th, 2018, they released yet another ToS revision; this one even worse than the previous versions. Read about that in my blog, Star Citizen – The Fall.
Through all this, Chris Roberts has gone on the record saying that he won’t be able to deliver the games as promised. Instead, after cutting features, walking back promises made etc, he stated that he would be delivering a “Minimum Viable Product“. Which is interesting because in Nov 2015, I wrote an analogy in which I opined that what they may end up delivering would be analogous to getting a $10 box, though backers already paid for a $100 Gold chest.
As recently as Feb 2017, after claiming to have raised over $140 million at the time, he again went on the record (1, 2) to say the following. He repeated it again in Jan 2017. He then went on to claim that if funding for Star Citizen slowed to a halt, that the sales of Squadron 42 would provide funding.
“First of all, we always have a decent amount of money in reserve, so if all support would collapse, we would not suddenly be incapacitated. We plan the scope of the development based on what arrives monthly by the people to support. I’m not worried, because even if no money came in, we would have sufficient funds to complete Squadron 42. The revenue from this could in-turn be used for the completion of Star Citizen.“ – Chris Roberts, Sept 2014
With neither Star Citizen nor Squadron 42 anywhere near complete (estimated at 18% complete as of this writing), backer money has seemingly been wasted, what was once a small indie project, now spans five studios around the world.
And one of those studios, Foundry 42 UK which Chris Roberts setup for his brother Erin Roberts, is in debt to two UK banks. And in the second loan taken out during June 2016, they pledged ALL the company’s UK assets, including Squadron 42, the single player game.
Not only that, according to public UK financials, after Chris used backer money to build the studio for his brother Erin in 2013, they then turned around and sold Erin’s shares back to the main corporate entity in 2016 for over $500K. Essentially taking backer money out of the project via unjust enrichment, even as the project struggled with funding. Though we don’t have the US financials, sources have said that they have done the same thing here in the US. To the extent that Chris Roberts is said to have paid himself and others for work done during 2011, with money raised following the crowd-funding windfall.
This is an important note because ALL of these guys were the same ones involved in the spectacular collapse of another videogame company, Gizmondo, which I wrote about in my Interstellar Pirates blog.
THE BEST LAID PLANS OF MICE AND MEN
To make things worse, at the CitizenCon2016 event in Oct 2016, Chris went on the record to say that Star Citizen Alpha 3.0 (which according to the list of promises, won’t even be 50% completed with that update) was coming by the end of 2016. That build didn’t arrive until Dec 23, 2017. And it was a complete disaster.
The project is now a complete disaster. With neither of the projects having been completed, growing backer unrest, various unflattering media stories about the demise of the project etc, backers and the public at large are finally coming to grips with the fact that the emperor really had no clothes, and that this whole project is now believed to have evolved into a massive multi-million Dollar international scam run under the guise of game development, even as the execs line their pockets with backer money.
Following the release of the disastrous 3.0 build in Dec 2017, as I had predicted, they completely stopped issuing refunds to backers who gave them money outside the 14 day window. Having made numerous changes to the ToS which prevent backers from getting their money back, as evidence from the Reddit setup to report refunds, CIG is now openly challenging backers to sue them. That in itself would be a problematic undertaking due to the arbitration clause since added to the ToS revisions; which also makes any class action virtually impossible to pull off.
Despite warnings and actions taken by the FTC and various State authorities against crowd-funding projects (1, 2, 3, 4, 5) which fail to deliver on promises, when the authorities finally get their act in gear, they are likely to find the biggest scam ever perpetrated on videogame consumers. And given the amount of money involved, it would make the 38 Studios debacle pale in comparison. And that one wasn’t even a scam.
“While this picture of the potential benefits of crowdfunding is undeniably attractive, as regulators we must be vigilant that the exemption will not become a tool for financial fraud and abuse…We expect that various kinds of social media will be used in tandem with crowdfunding. This may involve forums or message sharing through a portal’s website; it may involve current social media channels (especially Twitter and Facebook); and is likely to involve new channels and technologies” – William Galvin, Secretary of the Commonwealth for Massachusetts to Forbes Mag
Then, as if all that weren’t bad enough, in a surprising turn of events, in Dec 2017, they were sued (1, 2, 3, 4, 5, 6) by Crytek, the developers of the engine they were using for the development of the project. I wrote about that in this article, and have been tracking and writing about it since.