Reply To: Star Citizen – Scoops

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    The 2015 financials are up. For the first time, they actually filed on time this time around. I wonder what could possibly be going on over there. If I had to guess, I would say that section 19 has something to do with it.

    Anyway, the numbers are in stark contrast to the 2015 (analysis here) numbers. As of Dec 2016, they had £593K ($754K) in the bank. Considering that they get money from the parent (Cloud Imperium Games UK) company as-needed, there is no immediate concern here. If the parent company runs out of money, well, they’re screwed. They actually mention this “going concern” in section 1.2 of the filing.

    They are now taking the tax credits awarded by the government for software companies in the region. For 2016, they took £3.3m ($4.1m) allowance, and with the £3.1m ($3.9m) taken in 2015, brings the total tax credit to £6.4m ($8.1m) thus far. Due to how this is calculated (after expenses), this tax credit adds approximately £6.4m ($8.1m) to the projects P&L calculations.

    Yearly expenses increased from £12.7m ($16m) to £15.4m ($19.5m), which is an average of £225K ($285K) per month.

    The average employee count increased from 132 in 2015, to 221 in 2016. This was a financial increase from £5.9m ($7.4m) to £9.8m ($12.4) in wages and benefits. What’s curious here is that they hired 89 more people in 2016, with an increase of only £3.9m ($4.9m) in wages & benefits. Thus making the average yearly “per person” increase of only £43.8K ($55.4K). Given those numbers, these are probably either mostly interns, or part-time contractors. Especially when you consider their monthly burn rate for prior years.

    It appears that they still owe money to NatWest bank. Going from the financials, that amount seems (it’s not stated with clarity in section 13) to be £794K ($1m).

    They don’t own the building they are in. Their five year lease is now disclosed as being £249K ($315K) per year.

    Alarmingly, Erin Roberts (brother of CEO, Chris Roberts), the director of the studio, took a pay increase from £152.7K ($193.5) to £230K ($291.3) in 2016. As if it wasn’t bad enough that it was previously over 2x the average for someone in his position in the Manchester region; at that 22% increase, it is way higher than the inflation increase for the region. Aside from the fact that the average salary in the region declined by almost 2x the inflation rate between 2015-2016 period. Not to mention the overall financial conditions in the UK, especially in the videogame sector. Oh well, backers will never know.

    To date, they’ve raised over $151m in crowd-funded money, not including known and unknown loans, as well as other outside investment money, without ever shipping either of the promised games. So even as they keep using all kinds of tricks to continue raising money from the few remaining gullible believer whales, they’re basically continuing to unjustly enrich themselves at the expense of the project. If Erin alone is making this much money, one can only wonder what the rest of the people in the nepotism-r-us friends (Elms brothers, Derek Senior, Ortwin Freyermuth) and family (Chris & Sandi Roberts) program are making off a project they seemingly stand no chance of ever delivering on.

    Section 19 is very curious. Due to the huge restated amount of £2.4m ($3.0m) from 2015, it reads like the sort of thing that would result from either a govt audit, or them just cleaning up their books in order to pass any due diligence muster.  Also, as they’re now taking tax credits, it makes sense that these sort of numbers should be devoid of any such discrepancies, or they would also be in some serious problems with the govt. If you look at the chart from the previous analysis, with these restated numbers, it is now also clear that though the company doesn’t sell anything, they’re using money received from the parent (the backer piggy bank) company, as their income/turnover cash flow.

    A single studio is burning about $2m per month. Yet, when we estimated that they had to be burning approx $3m per month worldwide (five studios), some said nuh-uh. In 2016, they raised about $36m, and this single studio burned through about $24m (including the $8m tax credit) of it.

    Finally there is one very important element – the more funds we can raise in the pre-launch phase, the more we can invest in additional content (more ships, characters etc.) and perhaps more importantly we can apply greater number of resources to the various tasks to ensure we deliver the full functionality sooner rather than later” – Chris Roberts, Sept 16, 2013

    UPDATE: Analysis of suspicious asset allocation.


    As it stands, the upcoming highly anticipated 3.0 patch, as per the schedule update of June 9th, is already late, and with a slew of items either on the “TBD” chopping block, or delayed by up to a whole month.  In fact, since the schedule first showed up six months ago, it’s been consistently rubbish. When sources recently told me that the public schedule was bullshit, and that it didn’t even reflect the internal dev schedule, I was a bit skeptical. It all makes sense when you consider all the radical changes to the schedule, and then think back to Aug 19, 2016, during GamesCom, when Chris stated this:

    .so, it’s our big end of the year release. er so er yeah, so we’re gonna get it out the end of the year; hopefully not on December 19th but, er, like last year….but it is a big one, so, not making er, I got shot for making promises, but er, that’s our goal.

    That was a whole 10 months ago. So by the time it is released – assuming Aug (yah! just in time for another GamesCom fundraising) – it would have been a year since it was “coming in four months”.

    The changes in last week’s schedule update are truly hilarious. Some highlights:

    Line 47: Procedural Planets
    Line 154: Netcode
    Line 162-182: Cargo
    Line 180: Repair. This was feature complete in the last schedule. Now it’s back on the menu + 2 weeks.
    Line 208-211: Component system (in case you missed it, read my latest Quora reply regarding performance issues)
    Line 349: Volumetric Fog. Notice how it was due to be completed on June 9th (today), but somehow isn’t marked as “Feature Complete”? Yeah, me too.
    Line 378: Mission System Broker. Delayed a whole – freaking – month. LOL! I’m dying.

    Whatever they brand and release as 3.0 between July and Aug, is going to truly test the patience and loyalty of the remaining (those who didn’t get a refund off this sinking ship) backers. Even those who are probably laundering money through the game, are going to be concerned. From what I am hearing from inside sources, 3.0 is going to be just another chopped up mess, masquerading as a point (remember 2.0? yeah, me too) release, just in time for a critical fundraising (Gamescom in Aug, CitizenCon in Oct) drive as 2017 draws to a close. As I’ve written before, every single promise they have made for planets (moons vs planets), networking (critical revisions removed from schedule), etc in 3.0, has either been revised/removed, or in a state of disarray. But wait! If you read my May 24th analysis of the networking and instancing issues they have to contend with, it should give a good idea of what they are facing, and what to expect if/when 3.0 is actually released.

    Two years ago in July 2015, after they had raised an unprecedented $85m, I stated in my Interstellar Citizens blog that they simply couldn’t build the game as pitched, let alone for less than $150m. I had no clue that two years later, with an engine switch, and over $151m raised, that they still wouldn’t have shipped either of the two games, let alone 25% of the Star Citizen MMO game. It’s just amazing to me.

    And with E3 2017 going on, and the studio and the projects (Star Citizen and Squadron 42) nowhere (they were last seen at the Amazon Lumberyard showcase booth at GDC 2017 in Feb) in sight, given the amazing games on display, all made for less than $150m, it stands to reason that, as most of us have said all along, this project – in its entirety – is DOA. It will never be “finished”, let alone delivered as promised.