I posted this over on Blue's. Copying them here for posterity.
Expect sales, free weekends, and a rush to release sq42 regardless of completion status.
Hard to believe Derek Smart was right.
Well, I mean, Derek is Smart.
Seriously though, I have said a lot of the same things Derek has said: there's way too much scope creep, they aren't producing content anywhere approaching what they promised, SQ 42 is way behind schedule, etc. Say what you will about Derek, but he has worked in this industry for decades. His opinions are worth listening to even if you disagree.
I am going to be perfectly honest, on Dec 12th when I
broke the news about the $46M investment, a whole 8 days before
CIG even acknowledged it on Dec 20th, I really had
NO clue that the "
90 days tops" comment (which those guys have derided and attacked me over since Oct 2015) was so on the mark. They were literally
INSOLVENT at various periods in time, spending more than they were earning; and to the extent that they were looking for investors since mid 2017 (as I had reported at the time) and managed to find off-shore dark money which they closed a deal on in May 2018. Without telling backers anything. The same thing they did when they spent a year evaluating Lumberyard, then not saying anything until the day they released on 12/23/16 - again hours after I broke the news.
Though they claim this $46m is for marketing, looking at their financials, it's clear to see that they're lying. You don't SELL shares in your company to raise marketing money for a game that's literally
TWO YEARS away. Remember, they got the money in May 2018, and were possibly negotiating, going through due diligence etc, for months prior. And then in Dec 2018 they say SQ42 is going to be in Alpha by end of Q2 2020.
Especially since, if you
look at the financials, you will see that they were already spending money on marketing.
So they are just using the money to pay for their monthly shortfall (seen in the financials) from May 2018 to whenever it runs out. This way they aren't operating in the Red.
Bottom line is that even with over $200m in FREE MONEY, Chris couldn't ship a SINGLE game going into year 7. And
back in 2015 when I said they couldn't build that game for anything less than $150m, a decent custom engine, and a talented team, some people called me crazy, attacked me etc. Here we are.
My
Star Citizen - A New Dawn is extensive blog that has charts and numbers which show the seriousness and alarming nature of this investment.
ps: Who remembers back when I was opining that they had to have been burning between $3m - $4m a month?
So they have 3.5 months to stay solvent without any additional funding? PCGamer says they expect Squadron 42's beta to be ready by the second half of 2020. So the first game probably won't release until late 2020 or even into 2021. If they continue to use $4 million per month they will need an additional $82 million just to make it to early 2021. I just don't see that as possible with only crowdfunding. Haven't they already milked as much money as they can out of their gullible fans?
It all depends on how this public $46m investment rattles the faithful. Remember, they were already raising and spending over $40m a year since 2015
The amount in 2018 is looking like
$37.7m*
If we estimate that they raised and spent another $40m in 2018, it's easy to see that this investment is like a reserves of sorts. Remember, they got it in May 2018 and so they probably spent some of it by now going by the fact that 2018 funding is down to 2014 levels - even with all the shady shit and multiple sales they pulled in 2018 to milk whales. We will know more if/when they release the 2018 financials.
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?
My point is that if they continue to raise money - even at the lower levels - this $46m can be stretched (as a reserve) to the end of 2020. This was their plan all along I think, once they figured out that they simply couldn't make it to SQ42 release without downsizing (thus affecting BOTH projects) and such. Remember that though I'd been saying this since 2015, until Dec 2018, we didn't know for sure that SQ42 was so far out! I mean, the
roadmap was shocking enough and shows that for MANY years Chris
BLATANTLY LIED about the
state of the project. Heck, even in 2016 when sources told me it was nowhere near complete, once again CIG went and
issued a press statement basically saying I was full of shit.
Anyway, they will coast until sometime next year; and my guess is that even if they managed to get SQ42 into Alpha by end of Q2, it probably won't make a difference to their funding.
*
source
