Star Citizen is likely in financial trouble • Hacker News Board

Re: Star Citizen is likely in financial trouble

#51

Post by Belphemur » Sun, Jun 25, 2017, 4:29 PM UTC

headmelted wrote: post #40

Belphemur wrote: post #20

To quote a reddit comment : I should point out that this is not necessarily a bad thing, nor is it clear what the loan is for. What this tells us is that money has been loaned and secured against assets owned by CIG - this is fairly common practice in the case of commercial loans. To bank with Coutts you must have at least £1,000,000 in tangible assets and in any event they are selective about their clientele; which…

"they didn't go to a loan shark neither a shitty bank. It's the bank that manage the assets of the Queen. I don't think they give loan that easily hence the huge collaterals." Irrelevant. Why would they care which bank the money comes from? It would be careless to take any deal on less favourable terms than you could get elsewhere, which implies this Coutts deal was the best they could get. It could easily be a deal…

I guess to make conclusion we would need a disclosure from the studio.

The reputation of the bank and the way they approve client is relevant. It doesn't reduce the fact they took money, but again without a break down of the term we can only speculate the reason.

Saying "they'll fail" because of this loan is making a hasty conclusion.

Re: Star Citizen is likely in financial trouble

#52

Post by gdulli » Sun, Jun 25, 2017, 4:30 PM UTC

LMYahooTFY wrote: post #43

TulliusCicero wrote: post #4

Not very surprised, the game has been a trainwreck in the making from the beginning. Total scope was just way too overambitious, and people weren't going to plow hundreds and thousands of dollars into spaceship jpegs forever.

Why is it the hip and cool thing to call the entire project a train wreck without any actual supporting evidence? Half the subreddit seems to be die hard acolytes while the other half seem to be extremely bitter vets of a game that hasn't been launched. The biggest game development project ever, with extraordinary transparency, and shoddy bloggers are still making money throwing out talking points about how it's a tr…

They successfully got the evidence scrubbed from the internet. That must have been expensive.

http://www.oneangrygamer.net/2017/03/controversial-star-citi...

Re: Star Citizen is likely in financial trouble

#53

Post by resf » Sun, Jun 25, 2017, 4:37 PM UTC

LMYahooTFY wrote: post #43

TulliusCicero wrote: post #4

Not very surprised, the game has been a trainwreck in the making from the beginning. Total scope was just way too overambitious, and people weren't going to plow hundreds and thousands of dollars into spaceship jpegs forever.

Why is it the hip and cool thing to call the entire project a train wreck without any actual supporting evidence? Half the subreddit seems to be die hard acolytes while the other half seem to be extremely bitter vets of a game that hasn't been launched. The biggest game development project ever, with extraordinary transparency, and shoddy bloggers are still making money throwing out talking points about how it's a tr…

You're right about one thing, it's a "game development project", it's not a game.

Re: Star Citizen is likely in financial trouble

#54

Post by Nanite » Sun, Jun 25, 2017, 4:41 PM UTC

troynt wrote: post #49

norswap wrote: post #28

Earlier quoted context omitted.

I'm pretty sure they blew through most of their estimates. The projects was always hailed as one of the big crowdfunding break and nothing indicates they considered borrowing to finance the project given the massive amount of money they got and the time estimates they posted. By all means, check for yourself.

Why would you assume a company would never use a loan? Apple takes out loans and they have billions. There could be tax incentive to take out loans.

Apple takes out loans in the US because their offshore billions are subject to 30ish % corporate tax if repatriated, which is indeed a tax incentive albeit a perverse tax dodging one...

Re: Star Citizen is likely in financial trouble

#55

Post by jimnotgym » Sun, Jun 25, 2017, 4:43 PM UTC

EVERYBODY PAUSE!

This is not abnormal at all (in itself). If you were going to lend money to a software company, what else would you take as security other than IP?

A floating charge is just there to establish the bank as a preferential creditor in case they default. Otherwise if the company became insolvent, the bank would only be entitled to its share of what is left of the assets in proportion to what they had lent. If the bank expected them to default then they would not have lent them any money! A floating charge does not mean necessarily that the bank would be entitled to those assets, if they were of a higher value than what the bank had lent them, for instance.

I just took a look at the December 2015 accounts and they show that they burnt £1m in the year, and had £1.1m left. Again, the bank will know their provisional 2016 numbers and their forecast by now, and would not have lent them money that they didn't have the cashflows to repay.

The game may be rubbish, the project may be a failure, but a registration of a charge is not a cause for concern in itself. Maybe for instance, the company saw an opportunity that needed more cash?

Re: Star Citizen is likely in financial trouble

#56

Post by viscanti » Sun, Jun 25, 2017, 4:47 PM UTC

headmelted wrote: post #40

Belphemur wrote: post #20

To quote a reddit comment : I should point out that this is not necessarily a bad thing, nor is it clear what the loan is for. What this tells us is that money has been loaned and secured against assets owned by CIG - this is fairly common practice in the case of commercial loans. To bank with Coutts you must have at least £1,000,000 in tangible assets and in any event they are selective about their clientele; which…

"they didn't go to a loan shark neither a shitty bank. It's the bank that manage the assets of the Queen. I don't think they give loan that easily hence the huge collaterals." Irrelevant. Why would they care which bank the money comes from? It would be careless to take any deal on less favourable terms than you could get elsewhere, which implies this Coutts deal was the best they could get. It could easily be a deal…

> Irrelevant. Why would they care which bank the money comes from?

I'm sure they're looking for good terms, but being able to secure financing from a more reputable entity is still a signal. If they were some sort or real estate developer and could only get loans from someone like the Russian Mafia then we'd have a little more insight into what kind of business they must be running. In this case, going to a reputable bank is probably the best strategy for minimizing the cost associated with the loan.

The more reputable the bank, the more selective they are about their loans, and the closer to the LIBOR rate they'll charge. You can get a much better loan from a large bank than you can from a loan shark.

Re: Star Citizen is likely in financial trouble

#57

Post by bananicorn » Sun, Jun 25, 2017, 4:47 PM UTC

Should kickstarter have a clause for failed software projects to be open sourced/the source code/assets be given to the backers? (Not sure what the non-technical users could do with it, but at least they could get what work has been done so far) Of course I'm not implying Star Citizen has failed, this is just a general thought

Re: Star Citizen is likely in financial trouble

#58

Post by wlesieutre » Sun, Jun 25, 2017, 4:54 PM UTC

SXX wrote: post #46

ngold wrote: post #37

Wouldn't we all love a breakdown on how someone spends that kind of money. So far the game is solid. But I wonder if someone had their eyes on another WOW killer.

$150M isn't that much of money if you consider their studious locations, game scale and quality of their marketing materials. I guess they spent a lot more money on marketing and communications with community since it's the only reason they managed to get so much money through crowdfunding. For instance one of best and largest games recently produced is Witcher 3. It's cost about $81M [1] (half budget is marketing an…

Minor correction, the communication with the community is funded by "community subscribers" separate from the game development crowdfunding.

Re: Star Citizen is likely in financial trouble

#59

Post by mistersquid » Sun, Jun 25, 2017, 4:55 PM UTC

git-pull wrote: post #17

You have to admit, they made really good commercials for in-game content. They stayed in character, too. A few hand-picked favorites: - Imagine: Star Citizen : https://www.youtube.com/watch?v=lJJ9TcGxhNY - Star Citizen - MISC Freelancer Commercial : https://www.youtube.com/watch?v=vO7RxsZpcKc - Star Citizen: Consolidated Outland Mustang Commercial : https://www.youtube.com/watch?v=BR07oZC0QHU - Introducing the 2944 A…

In the first video the barrel roll [0] followed by a person in an EVA suit in the interior of a (different) vessel [1] made me wonder about zero-gravity spatial relationships.

(Before continuing, please excuse my ignorance in the subjects of gravitational physics and aeronautical nomenclature. Also, I do not intend to troll. I'm honestly wondering. I'm also a little embarrassed at the brainteaser-like character of my question.)

Presume a human being is inside a vertically asymmetrical vessel with no interior atmosphere. The vessel is at rest with regard to a nearby ([0] https://youtu.be/lJJ9TcGxhNY?t=106

[1] https://youtu.be/lJJ9TcGxhNY?t=116

EDIT: Change "subject" to "subjects".

Re: Star Citizen is likely in financial trouble

#60

Post by funnyfacts365 » Sun, Jun 25, 2017, 5:01 PM UTC

ohyes wrote: post #22

ohyes wrote: post #9

Earlier quoted context omitted.

I'm guessing this will involve unaffordable office space.

Yeah so I did some research, there's 250+ employees at the subsidiary foundry 42, which would indicate far more than 100 employees to pay for cloud imperium. If it's 400 people or something working at that company, burning through 150 million starts to sound more possible. Also 4 nice offices in non-cheap locals.

Locations or locales isn't the same as locals