Star Citizen – A New Dawn

Star Citizen – A New Dawn


It was only a matter of time. When you’re burning more money than you’re making, and your project is over four years late and well over $145M over budget, you’re probably in trouble. We’ve known for some time now that they were actively looking for money to continue funding the project because despite the crowd-funding chart being complete nonsense, they are burning through a lot of cash.

Though sources had been telling me since 2017 that they were looking for investors but not getting any takers, I had tweeted in May 2018 that they were in serious financial distress.

So, how does a company that claims to have raised $185M in FREE money – over a period of 6 years – end up teetering on the edge of bankruptcy, and with less than $9M in tangible cash assets?” – Derek Smart on Twitter, May 8, 2018

In their Dec 2017 they sub-divided the initial 100 shares (issued Dec 2013 @ at £1 each) to 1,000,000 shares (valued at £0.0001 each). There was speculation that they were either looking for investors, or were going to be offering stock incentives to key personnel. In an Oct 2018 article, based on sources telling me they had secured investors, I had always expected that the final confirmation would appear in the UK filings if that was the case. In the US, though there are investors, we don’t have any insight into how many there are, nor what loans (if any) they currently have as well. We already knew about the Coutts loan they took out in the UK, and for which the bank secured the UK govt tax credits and all the group’s (CIG/RSI/F42) assets (including Squadron 42) as collateral. As of the 2017 financial filings, the loan wasn’t fully paid off.

The much delayed public filing which was due in Sept 24, 2018, was finally filed on Dec 11, 2018. That shocking disclosure showed that back in May 2018, the execs (Chris Roberts, Erin Roberts, Ortin Freyermuth) either sold or transferred at no cost, a total of 18500 personal shares to a British Virgin Islands entity (Infatrade – the filing appears to be a typo) which also has a UK entity. They also created 113861 new company shares which we later found out they definitely sold to two Cayman Islands entities (Indus & Erloch).

At the time, we had no idea what the newly created shares were valued at. There was also speculation that these transactions were some sort of bridge funding. The reason for the latter speculation is that Infatrade happens to be an outfit that provides bridge funding for various enterprises. While they owned Ascendant Pictures, Chris and Ortwin had worked with Infatrade which according to IMDB provided the bridge/gap funding for their movie, Lucky Number Slevin.

The other piece to the puzzle was finally made public when the Dec 14, 2018 filing showed the value of the 113861 newly created shares as £149.63.

So in that transaction, they raised £17M for CIG. And if the 18500 personal shares were actually sold (as opposed to just being given away in some form of compensation) to Infatrade by the three execs, that would have raised £2.7M for them, assuming the same share price.

CIG 113861 £17,037,021.43
Chris Roberts 14598 £2,184,298.74
Erin Roberts 1301 £194,668.63
Ortwin Freyermuth 2601 £389,187.63
TOTAL 132361 £19,805,176.43

The timing of this transaction is interesting because it happened mere months before the CitizenCon (their biggest yearly fund-raising) event in Oct. Which also explains why they deliberately didn’t file the confirmation in Sept as they were required to. Instead, they waited until after CitizenCon to do so. Obviously not wanting to spook the whales or other parties who would have an interest in this transaction.

The conclusion of all this is that 11.88% of CIG (the parent company of the group) is now owned by dark money entities.

Chris Roberts 835402 75%
Indus Management 111386 10%
Ortwin Freyermuth 97399 8.74%
Erin Roberts 48699 4.37%
Infatrade 18500 1.66%
Erloch 2475 0.22%
TOTAL 1,113,861 100%

Back in Aug 2018, I had written another article about their financials which showed that Erin Roberts and others had sold back their shares and IP to the company to the tune of about £1.7M going into the pockets of the execs. Basically, they took backer money to build studios, the game etc, then turned around and sold their interest back to the group, thus taking backer money out of the project.

What needs zero speculation is that they have to keep raising money or the project collapses. That a company which claims to have raised over $210M in crowd-funding, while having investors and loans in the US, and now in the UK, would be having cash flow issues which forces them to dark money, is a five alarm fire. There is no standard Red flag here.  And if you are wondering why this is happening, you should think maybe 1) they really didn’t raise that much money 2) they are burning through more cash than they are making 3) they have NO cash reserves.

These guys are getting rich off backer money. With loans, investor money etc, and zero product delivered after six yrs.  Chris Roberts is the same guy who in 2012 claimed that he needed crowd-funding so that he wouldn’t have to get publishers or investors involved in the project. Sources tell me the same thing has happened on the US side. But we can’t get data on that because it’s a private company. Everything leaks, so eventually we’ll get that info. Especially with the on-going Crytek lawsuit. With this May 2018 investment it’s pretty clear that, as I wrote back in July 2015, NO amount of money is going to deliver the game they pitched and promised. In case you missed this, I wrote in my 2015 Interstellar Pirates blog that these are some of the same people involved in the highly publicized Gizmondo money laundering fiasco.


In fact, let’s review that funding chart analytics while we’re at it. This online Google sheet gives historical numbers in various formats. Aside from the fact that it has NO way of tracking refunds, investments, loans, taxes etc, we’ve long held that the funding chart is pure and utter bs that’s designed to show growth & interest. They claim to have consistently raised about $30M a year since 2014. In fact, they raised $7.2M in 2012 when the campaign started in Oct. Then by the end of 2013, they claim to have raised $28.4M. Between 2014-2018, the numbers are $32.9M, $35.9M, $36.1M, $34.9M, and $35.1M. If you are a programmer, financial analyst, or just the bean counter at a publisher or dev who follows financial analytics, see if you think the above metrics are perfectly normal. They are not. It’s a MASSIVE LONG CON CONFIDENCE SCHEME designed to give the impression of healthy interest in the project.

The problem with cons is that at some point you either run out of money or you deliver something. That Chris Roberts is notoriously incompetent at getting ANYTHING done when he’s in charge, unfortunately for him, he started running out of money due to his inability to deliver. Had he not gone off track but had actually stuck with the original vision for the games, NONE of this would matter and he wouldn’t now be on the verge of burning every single person who ever gave him money for Star Citizen. But that’s how these things go. If you haven’t yet, you should read the Chris Roberts Theory Of Everything article from Gameranx about this Chris Roberts phenomenon. The folks over Kotaku UK also delved into the history and wrote a lengthy five-part series back in 2016.

The bottom line is this. The funding chart is bs. They’re literally burning more cash than they are making. And they are fully leveraged in loans and taking on more investors to stay afloat long enough to foist on backers whatever it Squadron 42 (single player game with Hollywood star talent) ends up being. Speaking of SQ42, the single player game to Star Citizen, the dev schedule was promised in Dec 2017. Instead backers got another trailer then and this past Oct. Then a few days ago, the newsletter was announced as delayed. Seriously, I’m not even joking. So now we have to wait and see if the SQ42 dev schedule is actually released this month as promised or if they’re just going to pretend Chris never made that promise three times in a row over the past three years.

If they do release it, chances are that just as they have done with the Star Citizen dev schedule, it will be bs designed to placate backers, and which they will just keep changing in the months to come. I remember back when I wrote an article that the public dev schedule for Star Citizen was pure bs, and that sources told me the internal dev schedule went beyond 2020. That was back when they claimed the dev was almost “finished“. Next thing you know, they change the schedule format again – for the 3rd time in as many years – removed all previous promises, and acted like nothing happened. The dev schedule then started going only to year end. Then hilariously, mere months ago, they reveal tasks well into Q2/2019. Right now, the Star Citizen “game” is still barely 25% complete, and still NO signs of life in SQ42 thus far. As I wrote in my year six blog, we’re now entering year 7 with a dev schedule that only goes to Q2/2019.

But don’t worry though, I’m sure everything is fine. But as Jody Macgregor wrote in his latest article How Star Citizen Raised $7 million in seven days, the hardcore backers are perfectly OK being in their golf club environment. The rest of us just get to lol even as the dream ship continues to sink slowly.


The very next day after my initial reporting of these events, another CIG-UK filing appeared online. As with the off-shore funding, this happened this past Summer, and they’re only dumping it now at the end of the year – during the holidays.

Investor, Daniel O’connell Offner, has now joined CIG. Which means he probably has the title here in the US as well, since like Ortwin, he is only licensed to practice here. Dan has an extensive experience in steering companies to acquisitions, raising investor money etc. He is the quintessential heavyweight with notable deals under his belt. Dan also owns Blue Heron Ventures. These are his short list of clients. I have no reason to believe that either of these are likely to buy CIG. At least not the game companies (e.g. Ubisoft) who know better than to give Chris ANY money for ANYTHING. Regardless, that someone like him would be willing to join this train wreck, is probably a sign that something can be salvaged in the end.

Oh, if you read his bio, and the words “Columbus Nova” jumps at you, pat yourself on the back. That company (owned by Viktor Vekselberg a Russian oligarch under US sanctions since this past Summer) also owns Daybreak Games. That furor was blazing this past Summer if you recall.

Anyway, Dan now joins Chris, Erin, and Ortwin as director, an exec level position. So he’s either an investor, or he is representing a client. Either way, you don’t get a seat at that table without money or other incentives. This means that this happened here in the US as well, but we will never get to see those filings like we do in the UK.

Aside from the delayed filing of this investment and new director appointment, it’s also curious that even though Dan was appointed on Mar 23, 2018, when they filed their 2017 financial statement (my review) on Oct 26, 2018, they never listed him as a director. This is required by law; and yet somehow the auditors missed or deliberately omitted this. Had he been listed, we would have known about his appointment back in Oct.


I have reason to believe sources who had said that CIG also has investors in the US breathing down their necks. You don’t bring someone like Dan into your company unless you are 1) looking for money 2) looking to cash out. Remember how I have been saying all year that something big was brewing behind the scenes? Then this UK money gig happened in the Summer, and we only now find out about it. The rest of the events are currently playing out, and the biggest is yet to come.

I wrote an article back in 2016 in which I had said that actions Chris had taken, have ultimately started an E.L.E for the project. That’s been playing out. But if it continues to play out as I expect that it will, I wonder how backers are going to feel if Chris ends up selling the company to an investor or a publisher. I would literally die laughing because, well we remember the EA fiasco over Wing Commander, the Microsoft fiasco over Freelancer, and the follow-up Ascendant Pictures fiasco. One epic failure after another.

They also updated the UK filing of corporate directors showing that Ezer Eli Klein, one of the previous officers of Infatrade (the other investor in this deal) had joined Dan Offner as a director of CIG in UK and US.

Then on Dec 20th, four days after my initial reporting, CIG sent out a press release announcing that they had raised $46M this past Summer from Clive Calder, a British billionaire living in the Cayman Islands.

Chris Roberts also wrote a blog about the news. Funny how I get to break all these news, long before he does. So much for transparency. Also, this happen back in May!! As of this writing, the thread about this on the game’s official forums is decidedly brutal. It’s almost as if those guys haven’t been paying attention all these years.


They have also published their financial brochures (2012-2017), as well as an investor fact sheet. Funny how investors and regulators can make you do things. Aside from being shocking, both are basically just promotional sell sheets (see Frontier’s for comparison) with no cash basis, balance sheet, accounts payable etc.

Back in Aug 2015, I asked them for the promised (a condition of an early ToS) financial accounting, but they blew me off.


The sad reality is that this financial brochure is in the vein of the same dubious info they regularly put out. Only enough detail to placate backers, and which contains enough to sow doubt and keep them guessing. I mean they had $14M left end of 2017; and most backers seem to ignore the fact that without things like cash basis, balance sheet, accounts payable, for all intent and purposes, they were probably insolvent. Even the $5M loan sitting on their UK books in 2017, would need to be deducted from that $14M. After that, take into account other loans (they have two in the UK btw), debt etc and it’s easy to see how all of a sudden $14M looks a lot like less than $0.

Between 2012-2017 they raised $207.5M. Which btw is about $32M higher than the actual funding chart on their website which totaled $175.5M year ending 2017. Remember how I’ve always claimed that the funding chart was bs?

Chris now claims that the investment is for marketing of Squadron 42. Of course this is a blatant lie. They had to have started on this deal long before they closed it in May 2018 – at a time when they knew (as we do now) that the project wasn’t due for another two and half years! Who sells 10% of their company for $46M (which comes with a babysitter), then gives a board seat – to market a product that’s years away? Especially when they are burning through money like they have been doing? How does that make any sense? It’s a lie. They spin it this way because the optics of Chris saying that he needed investor money to continue funding the project, after claiming to have raised $211M over six years, having reserves etc just looks bad. I mean, he has already started contradicting himself in various interviews (1, 2, 3, 4) related to this deal.


Chris has gone on the record time and time again claiming that the crowd-funding effort means that he wouldn’t need money from publishers or investors. In fact, as far back as Feb 2013 when talking to VentureBeat after raising over $7M. And not so long ago in Jan 2017, he was claiming that they keep a healthy cash reserve, so if funding stopped for Star Citizen, that the sales of Squadron 42 would fund it to completion.

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, Jan 2017

I should also mention that although it was executed in May, filed on June 18th, the filing of a new corporate resolution not only removed the pre-emption rights, but also increased (from 5% to 10%) the threshold for any of the five directors to call a vote on important decision making. This means that only Chris Roberts (75%) and Dan Offner (acting for Indus) can call such a vote. The resolution also has an entire section (Article 12) on conflicts of interest, which appear to be designed to keep Chris Roberts in check, and which can also lead to his removal.


To me, this deal makes zero sense. I mean, for six years (long before I claimed in 2015 they couldn’t build the game for anything less than $150M) he couldn’t build a single game with over $211M of free money; but yeah, another $46M is totally going to help.

“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?”Derek Smart, July 2015

I also understand now why sources claimed that standard and institutional investors and publishers have been blowing him off as I wrote in my Sept 2017 article. But if you are familiar with investments, and know what Liquidation Preference and Convertible Notes are and how they work, then it will probably make more sense if we assume that’s what the investors did here.

Oh, one last thing. They have now changed the name of the company from Cloud Imperium Games UK Ltd, to Cloud Imperium UK Ltd. No idea why.



They also released the much awaited Squadron 42 roadmap which shows it going into Beta in Q2/2020. I can’t even stop laughing. At least now we know why they never released it back in Dec 2017 when they promised. We also know now – for an absolute fact – that everything they have shown of it, from the trailers to the vertical slice, were all specifically done for those trade shows (2012, 2015, 2017, 2018), as opposed to being indicative of the game they claim they have been building since 2012. Wow.

2015? NOPE

2016? NOPE

Remember how I had written back in May 2017 that sources told me the public dev schedule was pure fabrication, and that the internal version goes all the way to 2021? Heck, as far back as 2017, Chris is on the record during Gamescom 2017 claiming that the project was almost completed, that the missions had all been played through etc. As far back as 2016, Ben Lesnick (no longer on the project) had claimed that QA had played all the game’s missions. In June 2016, Tyler in QA claimed – in a stream – that he had played all the missions.

Also in Sept 2016 when I wrote that the project was delayed, CIG issued a statement to PC Gamer claiming there were no delays. That was a month before the Oct 2016 CitizenCon where slides used at the show presentation indicated that it was almost finished.


And the roadmap now shows that they’re a good 18+ months to Beta in 2020. So they knew the project was nowhere near ready, and that it was a good four or more years away, and almost six years from its original Nov 2014 release date.

We’re working on it. Production at the moment doesn’t feel comfortable sharing what we have – I’m not going to surprise anyone by saying Squadron 42 isn’t this year….The biggest issue we have with the Squadron roadmap, besides the fact that we gotta figure out some ways not to give things away, that’s solvable…they’re very reluctant to release something that might change.” – Chris Roberts, Reverse The Verse, June 2018

Note that the above statement was shortly after they had received $46M in bailout funding which backers only found out about in Dec 2018.

…and uhm, we’re closing it down – all the remaining features and content. And the last major technical hurdle that we were worried about on squadron was object container streaming which, as you know, we’re almost ready to close out now in 3.3. So we don’t have any major technical hurdles left on squadron, so for us it’s a bit easier to get squadron closed out then obviously Star Citizen server meshing and all that stuff.” – Chris Roberts, CitizenCon Oct 2018

So we now know that everything they’ve stated about it, were all lies. In fact, this is Chris Roberts in May 2013 explaining to Forbes how some devs back in the day would use vertical slice lies to defraud publishers in order to get milestone payments. Since that time, they’ve released no less than four vertical slice builds and trailers; all of which we now know follow the same pattern of deception which he described in that Forbes interview.


Gary Whitta:

Chris thanks for joining us and seriously, congratulations on this tremendously successful funding effort, but I guess really now this is just the beginning of the actual difficult part which is building the game, when are we actually gonna see this thing?

Chris Roberts:

Ehh, well the… the… the FULL FINAL GAME will be approximately TWO YEARS from now but ahm, one of the advantages and I think the same is true on David’s Elite if… if you BACK IT EARLY, you know, besides being part of the COMMUNITY and the DISCUSSION, ah, and… and having your voice heard and seeing sort of what’s happening in the background so, you know I… we’re going to ah… you know, instead… we don’t have a PUBLISHER but you know what, we’re gonna TREAT OUR BACKERS the same way we would a PUBLISHER so when we get to a MILESTONE we’re gonna give them a SHOW AND TELL and all the STUFF and personally I’d rather do that to them than a publisher because I’m showing it to a hundred thousand people that really care about this and get EXCITED by it and so that’s kinda cool, but the other thing that you’ll be able to do is PLAY, ah, sort of the EARLY BUILDS and the way I’m… the way I’m sort of STRUCTURING is I’m trying to, ah… test out components of this overall bigger UNIVERSE along the way so I don’t just drop everything all at once so in TWELVE MONTHS TIME you’ll be able to play the SINGLE PLAYER… ah I mean sorry, sorry… the MULTIPLAYER DOGFIGHTING ALPHA which won’t be the full PERSISTENT UNIVERSE and it won’t be the single player game, but it WILL BE basically all the ships that you’ve PLEDGED FOR, think of it more like WORLD OF TANKS… and we’re gonna use that to ah… BALANCE THE COMBAT, uhm… you know, FINE TUNE it with the help of the community, and ah… try and see you know, exactly STRESS TEST how many people we can get in an instance at any one time and then, ah, you know… about SIX TO TEN MONTHS after that we’ll do a sort of BETA of the SINGLE PLAYER CAMPAIGN which is SQUADRON 42 and then finally the FULL PERSISTENT UNIVERSE BETA to sort of ah, you know… gonna be about TWENTY MONTHS OR SO AFTER NOW and the LIVE RELEASE SHOULD BE ABOUT TWENTY FOUR MONTHS… but of course you know, there… it… there may be plus or minus a month here… well not minus… plus a month or so, on that… on the bigger thing at the end… but I’m PRETTY CONFIDENT about the DOGFIGHTING ALPHA IN TWELVE MONTHS



So basically Chris Roberts burned through over $200M of backer money without ever shipping a single one of the two products. As these financial statements show, the project – as I had been reporting – has been running in the Red, and would have collapsed since early 2016 if they hadn’t found a way to monetize JPEGs and increased scope creep. As I wrote earlier today in this lengthy Twitter thread, literally every single thing I’ve written about, from the project’s prospects, the unrealistic schedule, the money etc, have all been proven to be accurate in one feel swoop. It is surreal to me that in April 2016 I wrote the Extinction Level Event blog outlining how decisions Chris had made, forever doomed the projects.

Back in 2015 I had taken legal action and asked them to 1) refund backers who requested it 2) provide a dev schedule for the project so backers know when they can realistically expect the games they paid for, and 3) provide the promised financial accounting for the project.

In the course of three and half years since that time 1) in Dec 2017 when money got tight, as I had previously warned, they stopped giving refunds to legacy (beyond 30 days) backers 2) the first and heavily fabricated dev schedule (the format has changed several times) didn’t show up until Nov 2016; and 3) now in Dec 2018 they have released a financial accounting which pretty much explains itself.

I don’t think anyone that crowdfunded the game would be very happy about that either, if I was snapping pictures on the back of a yacht somewhere.” – Chris Roberts, Dec 2018

And to top this all off, during this same period of time, they revised the ToS several times, rescinding all previous protections and offers made to backers in 2012 – including never having to deliver a game of any kind.

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 2012

So there you have it folks, nothing further can be said here, other than this is Chris Roberts’ history repeating itself. I can’t say I’m surprised because for years I’ve been saying this was how things would eventually play out. All he has achieved is unjustly enriching himself, family, and friends to the tune of millions of Dollars; and all at the expense of trusting backers and investors, through a consistent pattern of lies and blatant puffery.

With investors (NOTE: We have no insight about the US side of things) now having so much money in the project, and with an installed $46M babysitter, we’re now entering a new dawn which I firmly believe signals not only the end of this farce, but also lawsuits abound. The difference this time is that there’s no EA or Microsoft who have the capacity to kick Chris out, rebuild etc. Instead, with someone like Dan who has extensive knowledge and experience in the industry, once this fails – as I still fully expect that it will – he’s just going to sell everything and have his clients take what they can from the proceeds, while writing off their losses as a tax incentive.

UPDATE: Chris has gone on the record and lied again to Games Beat about various issues surrounding this project. I cover that here.