star citizen Foundry 42, Cloud Imperium subsidiary, takes a loan and puts EVERYTHING as collateral

[Prysin]

@HellyStar citizen IS a ponzi scheme. If you want to claim otherwise, provide us some proof of massive games that cost THAT much money and took this many years -> to not have a damn shit to sell. just 1990s "demos", with a playerbase that is shrinking faster then a 80 year old mans erection.

[Astronautical]

29 minutes ago, Prysin said:

@HellyStar citizen IS a ponzi scheme. If you want to claim otherwise, provide us some proof of massive games that cost THAT much money and took this many years -> to not have a damn shit to sell. just 1990s "demos", with a playerbase that is shrinking faster then a 80 year old mans erection.

I'm not him but, destiny cost $140 million over 4 years. so its not like star citizen is drastically different in development cost progress at this stage. sure it has been in development for longer than most games but just googling "longest game to develop" gave me a list of games that took 7+ years...

unrelated but BLOODY HELL Team Fortress 2 was 9 years in development?!?!?

[Taf the Ghost]

17 minutes ago, Astronautical said:

I'm not him but, destiny cost $140 million over 4 years. so its not like star citizen is drastically different in development cost progress at this stage. sure it has been in development for longer than most games but just googling "longest game to develop" gave me a list of games that took 7+ years...

unrelated but BLOODY HELL Team Fortress 2 was 9 years in development?!?!?

It's Valve.  The start time for a Game is an interesting question with them.  

 

As for Star Citizen, it's entering Duke Nuke'm Forever territory rather rapidly. Feature creep kills a game and, for as much as there is a lot of bad blood between RSI and some of the main detractors of the project, the project is going to fail.  

[Prysin]

3 hours ago, Astronautical said:

I'm not him but, destiny cost $140 million over 4 years. so its not like star citizen is drastically different in development cost progress at this stage. sure it has been in development for longer than most games but just googling "longest game to develop" gave me a list of games that took 7+ years...

unrelated but BLOODY HELL Team Fortress 2 was 9 years in development?!?!?

TF2, Skyrim etc... sure they took time, but in those cases it is clear that those games were MOSTLY backburner projects, except Skyrim, because Bethesda is just outright incompetent.

[mr moose]

8 hours ago, Hawx said:

It's already been explained that it's an advance tax rebate (so the bank will get paid back next year when CIG receives their government rebate). Also pointed out is that the IP clause is nothing but a formality.

 

 

 

There is no such thing as a "formality" when it comes to big money and taxes.  Especially when you sign a document that includes terms regarding IP. 

 

It's a loan, Calling it Currency management, or an advance on tax rebates doesn't change the fact it is a loan.   Maybe it's a smart move depending on current conversions costs, maybe they need the cash upfront to bankroll  their operations.  Who knows.  I doubt anyone on this forum has any real idea.

[dalekphalm]

6 minutes ago, mr moose said:

 

There is no such thing as a "formality" when it comes to big money and taxes.  Especially when you sign a document that includes terms regarding IP. 

 

It's a loan, Calling it Currency management, or an advance on tax rebates doesn't change the fact it is a loan.   Maybe it's a smart move depending on current conversions costs, maybe they need the cash upfront to bankroll  their operations.  Who knows.  I doubt anyone on this forum has any real idea.

They got the loan because they are worried about uncertainty in the US/Euro to GBP conversion rate.

 

Also, note, that the collateral is ONLY for Squadron42, the single player campaign of Star Citizen. Star Citizen itself is explicitly and specifically excluded from the collateral.

 

I don't know if it's true, but apparently putting IP up as collateral is standard practice in the GameDev industry.

 

I highly doubt they need the cash upfront. People are blowing this out of proportion like mad. CIG's financial advisers said this was a smart move. It's not like Chris Roberts made this decision on his own while sitting on the toilet.

[mr moose]

20 minutes ago, dalekphalm said:

They got the loan because they are worried about uncertainty in the US/Euro to GBP conversion rate.

 

Also, note, that the collateral is ONLY for Squadron42, the single player campaign of Star Citizen. Star Citizen itself is explicitly and specifically excluded from the collateral.

 

I don't know if it's true, but apparently putting IP up as collateral is standard practice in the GameDev industry.

 

I highly doubt they need the cash upfront. People are blowing this out of proportion like mad. CIG's financial advisers said this was a smart move. It's not like Chris Roberts made this decision on his own while sitting on the toilet.

 

My point is the inclusion of IP is not a formality, Should anything go wrong, the bank is not going to just hand the IP back citing "it was just a formality".    People who start calling financial contracts "formalities" are trying to insinuate no danger exists, but the reality is if there was no danger the bank wouldn't require such collateral in the first place.  Being standard practice doesn't change that. 

 

Personally I don't care what IP is or isn't on the line, the fact is we don't really know if this is a smart business move or the first signs of poor financial management.   Only someone in the trade would be able to know that, and most likely only after a review of their business finances.  

[dalekphalm]

Just now, mr moose said:

 

My point is the inclusion of IP is not a formality, Should anything go wrong, the bank is not going to just hand the IP back citing "it was just a formality".    People who start calling financial contracts "formalities" are trying to insinuate no danger exists, but the reality is if there was no danger the bank wouldn't require such collateral in the first place.  Being standard practice doesn't change that. 

 

Personally I don't care what IP is or isn't on the line, the fact is we don't really know if this is a smart business move or the first signs of poor financial management.   Only someone in the trade would be able to know that, and most likely only after a review of their business finances.  

Agreed - we shouldn't call it just a formality.

 

But everyone is armchair accounting here, especially the OP, who as we know is Mr. Doom and Gloom about everything.

 

So far, Star Citizen has shown no signs of crashing or of going out of business. They show behind the scenes work and there is solid, real progress every week. They're working mostly on backend things these days, so the argument "feature creep" and ballooning isn't really a thing. The main features and scope have been locked in for like at least a year - if not longer.

 

Most of the stuff people are looking forward to (Eg: calling the current alpha bland, etc) must wait until the backend can support them.

[Taf the Ghost]

3 minutes ago, mr moose said:

 

My point is the inclusion of IP is not a formality, Should anything go wrong, the bank is not going to just hand the IP back citing "it was just a formality".    People who start calling financial contracts "formalities" are trying to insinuate no danger exists, but the reality is if there was no danger the bank wouldn't require such collateral in the first place.  Being standard practice doesn't change that. 

 

Personally I don't care what IP is or isn't on the line, the fact is we don't really know if this is a smart business move or the first signs of poor financial management.   Only someone in the trade would be able to know that, and most likely only after a review of their business finances.  

Roberts & company have shown pretty consistently to be fairly bad at the "business" part of this whole endeavor. I don't know the details of GameDev side-deals to know if putting the IP up as collateral is normal for a loan on future funds from the British Government, but saying it's "standard practice" doesn't sound right.  Why do they need *that* much money from a loan to cover operations?  Unless there is something wonky with the UK taxes that caused a massive charge that impaired their Cash on Hand, something isn't quite so straight forward.

 

I've heard of IP being put up as collateral by small studios to secure financing (and you normally hear about it when it goes South), but, as I said previously, this isn't the sign it's about to collapse.  But it normally means we're probably about 12 months out before problems start to get really bad.

[dalekphalm]

1 minute ago, Taf the Ghost said:

Roberts & company have shown pretty consistently to be fairly bad at the "business" part of this whole endeavor. I don't know the details of GameDev side-deals to know if putting the IP up as collateral is normal for a loan on future funds from the British Government, but saying it's "standard practice" doesn't sound right.  Why do they need *that* much money from a loan to cover operations?  Unless there is something wonky with the UK taxes that caused a massive charge that impaired their Cash on Hand, something isn't quite so straight forward.

 

I've heard of IP being put up as collateral by small studios to secure financing (and you normally hear about it when it goes South), but, as I said previously, this isn't the sign it's about to collapse.  But it normally means we're probably about 12 months out before problems start to get really bad.

If you read (and believe) the statement issued by CIG, the reason they're taking these loans, is because of the uncertainty in conversion ratios of GBP, which is the currency they get their Tax Refunds in.

 

Sure they could be lying, but why would they? They're incredibly transparent about the state of development, which for a $150m budget AAA sized game, is going steady.

[Taf the Ghost]

38 minutes ago, dalekphalm said:

If you read (and believe) the statement issued by CIG, the reason they're taking these loans, is because of the uncertainty in conversion ratios of GBP, which is the currency they get their Tax Refunds in.

 

Sure they could be lying, but why would they? They're incredibly transparent about the state of development, which for a $150m budget AAA sized game, is going steady.

I've only been aware of the Star Citizen issues each time there is a dust up.  The Derek Smart vs RSI stuff is messy and the bad blood goes pretty deep, yet beyond the personal issues there are big technical ones that simply aren't going to be cleared.  And, each time there has been a dust up, Chris being pretty bad at business always seems to be a core part of the situation.

 

My experience is in different areas of finance, but this really is heavy on the spin.  "Foundry 42 and its parent company Cloud Imperium Games UK Ltd. have elected to partner with Coutts, a highly regarded, very selective, and specialized UK banking institution, to obtain a regular advance against this rebate, which will allow us to avoid converting unnecessarily other currencies into GBP." A quick look at the GBP-USD chart would suggest either CIG are god-damn idiots or there's something else going on.  [Their money should be mostly USD-based, so you would hedge a Rise in GDP as you move money from USD -> GBP at intervals.  They have a lot of money, their commercial banks has Desks that do these things for them... if they ask.]

 

I also just looked through the filing to the UK Government about the loan, and, while my knowledge of the subtle details about the UK system is limited, the layout is pretty straight forward.  Everything about the company, Foundry 42, is placed as collateral.  Right down to the pens. I've never seen that much collateral put up for what is a glorified line-of-credit, supposedly. So I'm back to my point that either these people are "god-damn idiots or there's something else going on". There isn't enough information available from the form to say otherwise.

 

Also, the form lists the "Game"; there's no specification on what IP it is within the form. Though given my previous point about the Star Citizen IP being in the States, I don't think it would be possible to put that IP up as collateral in the UK very easily.

[dalekphalm]

50 minutes ago, Taf the Ghost said:

I've only been aware of the Star Citizen issues each time there is a dust up.  The Derek Smart vs RSI stuff is messy and the bad blood goes pretty deep, yet beyond the personal issues there are big technical ones that simply aren't going to be cleared.  And, each time there has been a dust up, Chris being pretty bad at business always seems to be a core part of the situation.

 

My experience is in different areas of finance, but this really is heavy on the spin.  "Foundry 42 and its parent company Cloud Imperium Games UK Ltd. have elected to partner with Coutts, a highly regarded, very selective, and specialized UK banking institution, to obtain a regular advance against this rebate, which will allow us to avoid converting unnecessarily other currencies into GBP." A quick look at the GBP-USD chart would suggest either CIG are god-damn idiots or there's something else going on.  [Their money should be mostly USD-based, so you would hedge a Rise in GDP as you move money from USD -> GBP at intervals.  They have a lot of money, their commercial banks has Desks that do these things for them... if they ask.]

 

I also just looked through the filing to the UK Government about the loan, and, while my knowledge of the subtle details about the UK system is limited, the layout is pretty straight forward.  Everything about the company, Foundry 42, is placed as collateral.  Right down to the pens. I've never seen that much collateral put up for what is a glorified line-of-credit, supposedly. So I'm back to my point that either these people are "god-damn idiots or there's something else going on". There isn't enough information available from the form to say otherwise.

 

Also, the form lists the "Game"; there's no specification on what IP it is within the form. Though given my previous point about the Star Citizen IP being in the States, I don't think it would be possible to put that IP up as collateral in the UK very easily.

I just checked USD to GBP, as well as Euro to GBP. There are quite a lot of fluctuations - both up and down - between these conversions. The fluctuations are pretty minor, but when you're dealing with thousands (or possibly tens or hundreds of thousands) of dollars, these little dips can add up to a lot of money.

 

Plus, every time you do a conversion, you're losing a small percentage of the conversion rate, since the bank doing the conversion has to take their small cut.

 

It seems to me that they are doing it to simply avoid doing many currency conversions, and they probably will instead to one large one less frequently.

 

As for putting up the entire Foundry42 IP? Maybe we're talking pretty large sums with the Tax Rebates... It's hard to say without knowing the exact figures.

 

Star Citizen is from a different "company", or rather, Foundry42 is a subsidiary, and has no ownership of Star Citizen IP in general, so there's no risk at all to Star Citizen as a whole.

 

We're all just guessing here as to the impact or the risk. We have no idea. We're not corporate accountants, nor are we banking experts.

 

We don't know all the details, and fear mongering based on information that none of us properly understands serves little purpose.

[AlwaysFSX]

16 hours ago, Prysin said:

Star Citizen is a modern day ponzi scheme. Get over it, and get out of it.

But but but.. it'll be so amazing when it releases!

 

/s

[bcredeur97]

reminds me of Butterfly Labs...

[Taf the Ghost]

1 hour ago, dalekphalm said:

I just checked USD to GBP, as well as Euro to GBP. There are quite a lot of fluctuations - both up and down - between these conversions. The fluctuations are pretty minor, but when you're dealing with thousands (or possibly tens or hundreds of thousands) of dollars, these little dips can add up to a lot of money.

 

Plus, every time you do a conversion, you're losing a small percentage of the conversion rate, since the bank doing the conversion has to take their small cut.

 

It seems to me that they are doing it to simply avoid doing many currency conversions, and they probably will instead to one large one less frequently.

 

As for putting up the entire Foundry42 IP? Maybe we're talking pretty large sums with the Tax Rebates... It's hard to say without knowing the exact figures.

 

Star Citizen is from a different "company", or rather, Foundry42 is a subsidiary, and has no ownership of Star Citizen IP in general, so there's no risk at all to Star Citizen as a whole.

 

We're all just guessing here as to the impact or the risk. We have no idea. We're not corporate accountants, nor are we banking experts.

 

We don't know all the details, and fear mongering based on information that none of us properly understands serves little purpose.

Depending on the timing, volume and other characteristics of the transactions, there's several ways to hedge against a rise in the GBP vs the USD during the movement period. Considering it should have been mostly a 1-way money transfer during the development period, that's not that hard to hedge against and the intra-day movement isn't too important to these types of transactions.  (Obviously, Brexit was different in this discussion, but that should have improved the situation for CIG.)

 

It isn't just the Foundry 42 IP that was put up.  The entire company was put up as collateral. Yet the interest rate isn't bad, which goes to my point about this isn't a sign of the end.  Just that things probably get bad next year.  If the story about the UK Rebate is the entire truth, it points back to CIG or Foundry 42 completely screwing up their taxes.  (Which feeds the thought that Chris is terrible at the business part.)

 

Thinking about this more than I had any desire to, I'm pretty sure this was a deal to secure enough financing to complete some project. The "IP" (Which?) + all of Foundry 42's assets look a lot like an Indie Developer taking out full financing to complete a major project. If they make their launch window, they can pay back the loan; otherwise it's going to be a write off.  Which ends up leaving us, again, asking "why?". If it's a collateralized line-of-credit, why put any part of Foundry 42 within the agreement?  It's either a lot more money or it's for some other reason.

[Hawx]

5 hours ago, Taf the Ghost said:

Depending on the timing, volume and other characteristics of the transactions, there's several ways to hedge against a rise in the GBP vs the USD during the movement period. Considering it should have been mostly a 1-way money transfer during the development period, that's not that hard to hedge against and the intra-day movement isn't too important to these types of transactions.  (Obviously, Brexit was different in this discussion, but that should have improved the situation for CIG.)

 

It isn't just the Foundry 42 IP that was put up.  The entire company was put up as collateral. Yet the interest rate isn't bad, which goes to my point about this isn't a sign of the end.  Just that things probably get bad next year.  If the story about the UK Rebate is the entire truth, it points back to CIG or Foundry 42 completely screwing up their taxes.  (Which feeds the thought that Chris is terrible at the business part.)

 

Thinking about this more than I had any desire to, I'm pretty sure this was a deal to secure enough financing to complete some project. The "IP" (Which?) + all of Foundry 42's assets look a lot like an Indie Developer taking out full financing to complete a major project. If they make their launch window, they can pay back the loan; otherwise it's going to be a write off.  Which ends up leaving us, again, asking "why?". If it's a collateralized line-of-credit, why put any part of Foundry 42 within the agreement?  It's either a lot more money or it's for some other reason.

This is some insane over thinking on your part. Instead of CIG having to convert sums of money from USD/EUR to GBP (as their raw GBP income isn't enough to cover UK operations), their financial advisers figured that an early loan against next year's tax rebate would result in a better outcome for the company. They somehow figured out that the interest paid on the loan outweighed the losses in currency conversion fees and value flux they'd have to deal with otherwise. If you want to complain about it, go find their financial advisers and tell them how wrong they are.

 

The majority of the "business" side of CIG is handled by Ortwin (who is an experienced entertainment lawyer) and his legal/finance teams. This decision likely barely involved CR.

 

As pointed out by Ortwin, the real collateral is against next year's tax rebate by the government. F42 as collateral is completely irrelevant, as it's only there due to CIG not having anything else to offer in the multi-million pound repayment bracket to go on the loan paper (as you can't write "The UK Government" as your collateral), and would only come into play if the UK Government didn't bother paying their tax rebate and the UK studio didn't have the assets to repay it.

Quote

Obviously, the UK Government will not default on its rebate obligations which will be used for repayment, and even then the UK companies have ample assets to repay the loan, even in such an eventuality which is of course unthinkable.  

CIG's business department decided this was a smart move and that's that. Creating some convoluted explanation regarding a part of the loan that would likely never be relevant given the current information is just stupid.

 

Don't just take it from me, /u/Abrushing on reddit, who has worked in investment banking, did an analysis of CIG's logic.

 

Quote

So, the data I have available for comparison is all from private companies, meaning I can't divulge names and details due to SEC and FINRA regulations. Public companies would just issue an unsecured (no collateral) bond and be done with it. Collateralized loans are more common and help a company obtain a lower interest rate than an unsecured line of credit would. The loan agreements I have all state LIBOR/US Prime Rate plus 0.5% to 1.0%.

 

Last year, CIG was owed a tax credit of £3,319,220. 2015 was £3,115,774, so I'll just average it to about £3,200,000 for simplicity. Now, CIG could be sending this over from the US, but the exchange rate over the past year has been all over the place, to the tune of .75 to .82 GBP per USD converted. Note that this conversion rate means the lower ratio is, the weaker the Dollar is to the Pound. Rather than risk losing money to a volatile conversion, F42 opted to take the advance on their tax credit and minimize the loss.

 

Let's assume they did it at Friday's (6/23) conversion rate (about 0.79). They could move $4,050,633, which would convert down to £3,200,000 for an accounting loss of $850,633. Alternatively, they could take a collateralized loan. This is a short-term loan on the tax credit they are due at the end of the year, so I'm going to assume the bank used the 1-year LIBOR rate to give them time to do their taxes and actually receive the credit to pay it back.

 

1 year GBP LIBOR as of close 6/23 was .667%, so using the riskiest range I found on commercial collateral loans, I'd say their loan would be 1.667% under this assumption. For fun, let's go even higher and say this loan is at 2%. So, a loan of £3,200,000 at 2% means they are paying £64,000 of interest, or $81,013

 

So there you have it. By getting the tax credit loan advance in Britain instead of sending money from the US, they are saving ($850,633-$81,013) = $769,620. Remember, this is only an assumption based on available numbers, so they won't be exact. They should be somewhere in the ballpark, though.

 

 

[Helly]

17 hours ago, Prysin said:

@HellyStar citizen IS a ponzi scheme. If you want to claim otherwise, provide us some proof of massive games that cost THAT much money and took this many years -> to not have a damn shit to sell. just 1990s "demos", with a playerbase that is shrinking faster then a 80 year old mans erection.

Well lets talk about proof. Show me proof that the playerbase "is shrinking faster then a 80 year old mans erection", and dont show some haters comment or hater site that spits out some numbers out of nowhere.

 

Also, no game this massive has ever been made. So while you're searching for those numbers, find me a game as, if not more, massive then SC. Building the tools and technology for something this massive takes time and money, thats just how it is. All you haters keep screaming for proof from us backers and never give proof of the stupid claims you keep making. Like the haters that keep screaming about feature creep, no one has ever shown me proof of that feature creep.

 

So if you want to convince me of anything, show proof. At least CIG shows me proof its not a scheme by showing me progress every single day of the week, and giving updates to the game every few months.

[Prysin]

1 hour ago, Helly said:

Well lets talk about proof. Show me proof that the playerbase "is shrinking faster then a 80 year old mans erection", and dont show some haters comment or hater site that spits out some numbers out of nowhere.

 

Also, no game this massive has ever been made. So while you're searching for those numbers, find me a game as, if not more, massive then SC. Building the tools and technology for something this massive takes time and money, thats just how it is. All you haters keep screaming for proof from us backers and never give proof of the stupid claims you keep making. Like the haters that keep screaming about feature creep, no one has ever shown me proof of that feature creep.

 

So if you want to convince me of anything, show proof. At least CIG shows me proof its not a scheme by showing me progress every single day of the week, and giving updates to the game every few months.

Burden of proof lies with you. You're the one claiming there is "such progress", where the rest of us see none. You're the one claiming there is an active playerbase, where the rest of us sees none.

 

But hey, you can always pull the "begging the question + strawman + counter-attack" trick, it just doesnt work against me.

[Helly]

12 minutes ago, Prysin said:

Burden of proof lies with you. You're the one claiming there is "such progress", where the rest of us see none. You're the one claiming there is an active playerbase, where the rest of us sees none.

 

But hey, you can always pull the "begging the question + strawman + counter-attack" trick, it just doesnt work against me.

Progress can be seen in the 4 or 5 video's they put on their youtube channel every week: https://www.youtube.com/RobertsSpaceInd

 

An active player base can only be seen if you play the game obviously. The players actively playing right this moment is obviously low as it has been some time since the game was updated. The active amount of players will explode again in a month when alpha 3.0 will be released. At that point you will know that there is an active player base when you're unable to update the game because the servers are overloaded.

 

so, hey i provided the proof or at least told you where to get the proof.... now its your turn. Or are you going to deny all this and give some bullshit argument its all wrong like all the haters do. In your case i'd call it the "FAKE NEWS" argument.

[Taf the Ghost]

3 hours ago, Hawx said:

This is some insane over thinking on your part. Instead of CIG having to convert sums of money from USD/EUR to GBP (as their raw GBP income isn't enough to cover UK operations), their financial advisers figured that an early loan against next year's tax rebate would result in a better outcome for the company. They somehow figured out that the interest paid on the loan outweighed the losses in currency conversion fees and value flux they'd have to deal with otherwise. If you want to complain about it, go find their financial advisers and tell them how wrong they are.

 

The majority of the "business" side of CIG is handled by Ortwin (who is an experienced entertainment lawyer) and his legal/finance teams. This decision likely barely involved CR.

 

As pointed out by Ortwin, the real collateral is against next year's tax rebate by the government. F42 as collateral is completely irrelevant, as it's only there due to CIG not having anything else to offer in the multi-million pound repayment bracket to go on the loan paper (as you can't write "The UK Government" as your collateral), and would only come into play if the UK Government didn't bother paying their tax rebate and the UK studio didn't have the assets to repay it.

CIG's business department decided this was a smart move and that's that. Creating some convoluted explanation regarding a part of the loan that would likely never be relevant given the current information is just stupid.

 

Don't just take it from me, /u/Abrushing on reddit, who has worked in investment banking, did an analysis of CIG's logic.

 

As I said previously, I don't really keep up with this except when it blows up.  I've got no skin in this discussion beyond the obvious that "the" massive crowdfunding project going under is going to be an issue, and that I'd have liked to play a good space-sim.  But as I also said: 

Quote

"Which ends up leaving us, again, asking "why?". If it's a collateralized line-of-credit, why put any part of Foundry 42 within the agreement?  It's either a lot more money or it's for some other reason." 

I don't have the inner working knowledge to make a definitive judgment on their actions, but CIG is spinning this furiously.  Either their finance people are idiots and should have been fired & sued or they wanted a loan for a lot more than the UK Rebate.  Their UK studio has been around for several years, thus they should have had it all budgeted back in 2013/4, when the GBP was much higher relative to the USD and been hedging accordingly throughout the years.  (They also have a Germany studio, I believe? Same thing.) Which simply means either they need a lot more money than just some line-of-credit/rebate forward or they're terrible at the whole "International Business" part of game development. 

 

This isn't a nothingburger, but since you're talking UK subsidiary + US private company the total picture can't be ascertained.  However, that doesn't change that none of this looks like a business I'd want to be associated with. If I had money invested with a company that did this, I'd be very concerned about it. The fanboy wars changes none of the reality of running a business. 

[dalekphalm]

22 minutes ago, Taf the Ghost said:

As I said previously, I don't really keep up with this except when it blows up.  I've got no skin in this discussion beyond the obvious that "the" massive crowdfunding project going under is going to be an issue, and that I'd have liked to play a good space-sim.  But as I also said: 

I don't have the inner working knowledge to make a definitive judgment on their actions, but CIG is spinning this furiously.  Either their finance people are idiots and should have been fired & sued or they wanted a loan for a lot more than the UK Rebate.  Their UK studio has been around for several years, thus they should have had it all budgeted back in 2013/4, when the GBP was much higher relative to the USD and been hedging accordingly throughout the years.  (They also have a Germany studio, I believe? Same thing.) Which simply means either they need a lot more money than just some line-of-credit/rebate forward or they're terrible at the whole "International Business" part of game development. 

 

This isn't a nothingburger, but since you're talking UK subsidiary + US private company the total picture can't be ascertained.  However, that doesn't change that none of this looks like a business I'd want to be associated with. If I had money invested with a company that did this, I'd be very concerned about it. The fanboy wars changes none of the reality of running a business. 

I think you're pulling problems out of nothing. The analysis posted by @Hawx, if accurate, shows a potential savings of almost one million dollars. 

 

I don't see see how that makes their financial advisors idiots. 

[Taf the Ghost]

12 minutes ago, dalekphalm said:

I think you're pulling problems out of nothing. The analysis posted by @Hawx, if accurate, shows a potential savings of almost one million dollars. 

 

I don't see see how that makes their financial advisors idiots. 

Because you don't realize an accounting loss on a currency conversion.  It'd be booked as an asset at either the yearly or quarter valuation rate for the conversion. 

 

If they're getting rebates in the 3mil pound range, then they're moving a lot more money over there over the last few years.  Which means they should have already had some sort of hedging position because they should have been moving fairly large chunks of money around 3-4 times per year to cover their expenses. If they needed money in the UK as some hedge against the Rebate, that doesn't make any sense.

 

The kindest read on the situation I can come up with is that they know the Pound is going to rise pretty hard against the Dollar and actually took a large loan against Foundry 42 as an intra-company investment. That would be a defensible move if you have a good read on the macroeconomics of the situation, but that's not part of the message they put out.  It also brings up questions about how many *years* they expect Foundry 42 to take to deliver their product(s). We're right back to my point about either there has been a long-running issue with incompetence at this or they needed a whole lot more money than as a forward on the Rebate.

[Prysin]

3 hours ago, Helly said:

Progress can be seen in the 4 or 5 video's they put on their youtube channel every week: https://www.youtube.com/RobertsSpaceInd

 

An active player base can only be seen if you play the game obviously. The players actively playing right this moment is obviously low as it has been some time since the game was updated. The active amount of players will explode again in a month when alpha 3.0 will be released. At that point you will know that there is an active player base when you're unable to update the game because the servers are overloaded.

 

so, hey i provided the proof or at least told you where to get the proof.... now its your turn. Or are you going to deny all this and give some bullshit argument its all wrong like all the haters do. In your case i'd call it the "FAKE NEWS" argument.

no, i simply am going to archive your post, then come back after Alpha 3.0

Then ill look for playerbase estimates from the previous alphas... and well, you may be dissappointed

[Derangel]

10 hours ago, Prysin said:

Burden of proof lies with you. You're the one claiming there is "such progress", where the rest of us see none. You're the one claiming there is an active playerbase, where the rest of us sees none.

 

But hey, you can always pull the "begging the question + strawman + counter-attack" trick, it just doesnt work against me.

Wrong. YOU are claiming that it is a ponzi scheme. YOU made the accusations therefor YOU have to provide proof. Burden of proof is on the accuser, not the accused.

[rentaspoon]

On 2017-6-27 at 4:50 PM, Prysin said:

no, i simply am going to archive your post, then come back after Alpha 3.0

Then ill look for playerbase estimates from the previous alphas... and well, you may be dissappointed

You mean like the estimates that came from something awful?

 

Launch week is always busy and it calms down in between patches.

 

On topic, the loan puts the rebate itself up for collateral and they have the money to pay it off anyway, if i had to speculate i would assume they are expecting more players to join 3.0 and this loan allows them to increase server count OR its so they don't have to convert currency to pay employees or whatever.

 

If you wanna see progress in the game no one else gets to see, ask to take a tour of the company, sign the NDA and enjoy.