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Star Citizen loan clarification: it's an advance on their UK game dev tax rebate

Micael

Member
To the surprised of no one sane it turned out to be proof of nothing, and it is a wise move, while it might turn out that the £ stays like this or doesn't drop more, given that Brexit bill negotiations are still to be started, let alone freedom of movement talks which will dictate if the UK can remain in the single market or not, there is a very good chance the £ will fall further, so they are basically taking a small hit to future income (at worse, at best they will get more money) to get a certainty on how much they will receive, instead of gambling with how the market will react to the Brexit negotiations and possibly losing money in the process.


I swear I will never understand why mods let so much shit posting go in this forum when it is certain subjects, like indie games, valve, star citizen, among others, people just drop in start saying stuff that is verifiable false and crazy, and get absolutely no punishment for doing behavior that should be confined to the trash pit alternative fact reality of reddit and 4chan.

If people want to think Star Citizen is going to turn out into a big pile of old crap, that is fine, it is an opinion, I mean there is so so so much about star citizen development process that can be validly criticized, the fact they have what must be one of the most open development processes around (the irony given the claims), sure helps a lot with that.
But to claim it is a scam is just false by any sane measure that can be verified at this point in time, not to mention it is a very serious accusation, which none of these borderline troll posters seem to back up ever.

The explanation seems really fishy. For what it's worth, here's Derek Smart answer on the subject :

http://dereksmart.com/2017/06/star-citizen-final-countdown/

"This response has so many Red flags, I don't even know where to begin. So, right off the top of my head...

Look at the 2016 filing, and it is 100% clear that the tax credits aren't even going to fund 2 months of operations! I wrote an analysis of their 2016 filings which shows the tax credit amounts. Quote: ”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.”

That they took a loan against such a SMALL tax credit, should be alarming that they would even need to. If after getting $150m + investor money + loans, you also need to pledge ALL assets for a high-risk loan against a measly tax credit, that's a problem. Not to mention a tax credit that is due in just a few months when they file taxes. But they apparently need the money right now. Why is that?

If this was just about the tax credits, why then is it not the ONLY collateral (p4 Section 4.2.9) listed? If true (given their record, this is highly unlikely), obviously the bank felt it was a RISKY loan because they could fold BEFORE being eligible for the tax credit. So they secured ALL their assets.

A UK tax credit, like here in the US, is a guaranteed asset, as long as your revenue is in compliance. You can take out a loan against just the tax credit, without putting your entire company and assets on the line – just for that. In this instance, this was not the case. The loan collateral isn't just for the tax credit, but for highly valuable assets. Of course, as we've seen in the case of 38 Studios collapse, things can go sideways pretty quickly if you don't plan correctly.

Also, Ortwin is the same guy who has been involved in various venture collapses, and complete loss of investor money; mostly in Germany. I wrote about this in my Money Laundromat blog a few months ago."

Derek Smart is a complete idiot, most of his claims about star citizen are straight up lies, https://youtu.be/IHUbzzKJXBc?t=1743 as you can see in that video (check that specific time stamp), so yeah keep using that guy, or the escapists which had sources saying things that employees verified as being false like having ID cards and the likes.

Well, we're still quoting Chris Roberts after 8 years, $150 million spent and basically nothing released so I guess we can quote everybody...

The kickstarter only started at the end of 2012, so you know yet another claim that seems to be inaccurate from you, also had no idea you did accounting for star citizen to know they have spent 150 million $, which should be said is quite the achievement, after all they only raised close to 153 million $, I guess you just proved that they do indeed not pay taxes, or even payment fees really, since that would be basically the only way they could spend 150 million with 153 million raised, those filthy scammers, tax dodging scum.
 
The mental gymnastics people are doing in this thread claiming this is normal is hilarious.

Wanna know another company that tried to pull this of? 38 Studios, and we all know how well that went. In the end, their deal fell through because Schilling either couldn't or didn't want to put up enough collateral. But the context is similar, both companies were running on fumes and this is an an act of desperation. This is one of the worst possible ways to secure funding.

Whether or not CIG can recover from this is debatable. I personally doubt it, as it means CIG would have to push out SQ42 within the next couple of months and sell millions of copies on top of their existing pre-orders. CIG's future is looking pretty bleak.

Talk about false equivalence at best. A cautionary tale at worse.

Also this is not what a happened with this loan. You are trying to push a narrative and are projecting it pretty hard. You seem to not be asking question but making an assumption, on what CIG will or might have to do. When you are basing this on a now debunked misrepresented report.
 
Devil's advocate. Does this statement now make how long this thing is taking to release, and supposedly how much money it has received over the years, a non-issue?

How are either of those things issues in the first place?

Star Citizen has been in development for about 5 years. The Witcher 3 took 5 years, GTA V took 6 years, Skyrim took 4 years, Mass Effect Andromeda took 6 years...here's some helpful charts:

vdOpS8r.jpg

flrVzR9.png
(2nd one is outdated for the SC part but that has no bearing on the rest)

As for the money, The Old Republic took 200mil, 137mil for GTA V, 105mil for Max Payne 3, 80+ for Red Dead Redemption etc

So, if 5+ years and around that sort of development costs for fairly typical large scale games is acceptable...why is the same thing suddenly too much for one of the largest, most ambitious game in development that aims to push the envelope for immersion and graphics? That doesn't take into account things like having to set up studios, rework the engine etc, either.
 
It's already been explained how this is normal and actually beneficial multiple times ITT. Care to use specifics about how it's not?

Yeah i don't get it.

http://www.bostonmagazine.com/2012/07/38-studios-end-game/

vs

http://www.kotaku.co.uk/2016/09/23/inside-the-troubled-development-of-star-citizen

One is still around and doing smart things with their money, still hiring and interacting with their community and the another did a bunch of stupid shit an it's now closed. Both opened around the same time.
 

MUnited83

For you.
The mental gymnastics people are doing in this thread claiming this is normal is hilarious.

Wanna know another company that tried to pull this of? 38 Studios, and we all know how well that went. In the end, their deal fell through because Schilling either couldn't or didn't want to put up enough collateral. But the context is similar, both companies were running on fumes and this is an an act of desperation. This is one of the worst possible ways to secure funding.

Whether or not CIG can recover from this is debatable. I personally doubt it, as it means CIG would have to push out SQ42 within the next couple of months and sell millions of copies on top of their existing pre-orders. CIG's future is looking pretty bleak.

I guess if you completely ignore all the specifics about the loan that actually explain very well how it isn't anything like 38 studios, that might make some sense. But I'm used to people like you being completely allergic to facts at this point.
 

NewGame

Banned
I'm sure the game will be released, but knowing Chris and having played his other games it will probably be a solid 7/10 experience.

Money problems in his previous games did little to improve our impede the game quality anyway.
 
I guess if you completely ignore all the specifics about the loan that actually explain very well how it isn't anything like 38 studios, that might make some sense. But I'm used to people like you being completely allergic to facts at this point.

It's exactly like 38 Studios. Going this route mean Robert failed to attract additional investors. They're running out of money so they're cannibalizing future income to stay afloat.
 

fester

Banned
It's simply amazing. The facts about the loan get stated clearly, and instead of a simple "oops, my bad, I overreacted", or "my financial understanding wasn't up to snuff, I should have waited before forming an opinion", the response in this thread becomes a cop-out "both sides are the same" bullshit deflection. If you try to point out the FUD being spread on the current topic (aka the bank loan), you get branded a "zealot". Can we please have a fucking discussion without all the polarizing bullshit? Step one: stop listening to Derek Fucking Smart.
 
It's exactly like 38 Studios. Going this route mean Robert failed to attract additional investors. They're running out of money so they're cannibalizing future income to stay afloat.

Roberts one didn't want to get a publishers, after being told that space games are dead and they have no market. That's why he went this route and another reason why he went this route is because he wanted to be able to make the game. He wanted.

http://www.gamasutra.com/view/feature/200998/chris_roberts_on_star_citizen_.php?print=1


Which he is doing. 38 studios is closed. So what is you're evidence to prop this up? "They're running out of money so they're cannibalizing future income to stay afloat"

Here was there issues in 2015: http://www.kotaku.co.uk/2016/09/23/inside-the-troubled-development-of-star-citizen. Something they have improved since.
 

Crossing Eden

Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
It's simply amazing. The facts about the loan get stated clearly, and instead of a simple "oops, my bad, I overreacted", or "my financial understanding wasn't up to snuff, I should have waited before forming an opinion", the response in this thread becomes a cop-out "both sides are the same" bullshit deflection. If you try to point out the FUD being spread on the current topic (aka the bank loan), you get branded a "zealot". Can we please have a fucking discussion without all the polarizing bullshit? Step one: stop listening to Derek Fucking Smart.
What's weird is that this is quite literally the most transparent big budget project even in terms of it's development, there are actual things to critique about the game atm, yet somehow, i've genuinely never seen more fake stories/rumors, conspiracy theories lobbed at the devs, or such transparent desperation to feel schadenfreude at the expense of the devs on the off-chance that this game does fall through. Which I don't see the motivation for at all? Some reasons i've seen are because it's ambitious, Because it's pc exclusive, because crowdfunding is all some evil scam instead of a legitimate way to fund a project. I just don't get it.
 
Anyway, I think a lot of people are still pretty concerned about this game given the length of development.
Seriously, this exact comment is getting as tired as "but what do you do?" comments in old No Man's Sky threads.

It's been 4 and a half years, INCLUDING pre production. That's really nothing special by normal game standards, and incredibly short for an MMO scale game.
 

Micael

Member
If CIG had all the money they needed, why would they do something that results in a loss of income over the long term?

It is explained in the OP, but as I said:

"To the surprised of no one sane it turned out to be proof of nothing, and it is a wise move, while it might turn out that the £ stays like this or doesn't drop more, given that Brexit bill negotiations are still to be started, let alone freedom of movement talks which will dictate if the UK can remain in the single market or not, there is a very good chance the £ will fall further, so they are basically taking a small hit to future income (at worse, at best they will get more money) to get a certainty on how much they will receive, instead of gambling with how the market will react to the Brexit negotiations and possibly losing money in the process."

Unless you can divine the future you can't even say if this will result in a loss of income, because doing this might very well mean they end up with more income, and honestly given the state of the British government and their complete inability to get their shit together, I would be advising them to do the same thing their financial adviser told them.

EDITED: Should have put originally that they aren't really taking a hit on future income if the £ drops enough to offset the low interest rates they will pay on this, have edited the original thing I wrote to include this "(at worse, at best they will get more money)".
 
What's weird is that this is quite literally the most transparent big budget project even in terms of it's development, there are actual things to critique about the game atm, yet somehow, i've genuinely never seen more fake stories/rumors, conspiracy theories lobbed at the devs, or such transparent desperation to feel schadenfreude at the expense of the devs on the off-chance that this game does fall through. Which I don't see the motivation for at all? Some reasons i've seen are because it's ambitious, Because it's pc exclusive, because crowdfunding is all some evil scam instead of a legitimate way to fund a project. I just don't get it.

Yep no one ever seems interested in the game that is actually there or have any real criticism about the alpha itself. It's always Derek smarts bullshit pops up, along with conspiracy theories with zero evidence to back them up and general neogaf doom and gloom.

Even though they will praise the shit out of other early access games. That will never be truly finished, because they are cash cows. Before they destroy their own community that is.

It all seems like a contrived effort to be obtuse and be skeptical just to be a skeptical.
 
It is explained in the OP, but as I said:

"To the surprised of no one sane it turned out to be proof of nothing, and it is a wise move, while it might turn out that the £ stays like this or doesn't drop more, given that Brexit bill negotiations are still to be started, let alone freedom of movement talks which will dictate if the UK can remain in the single market or not, there is a very good chance the £ will fall further, so they are basically taking a small hit to future income (at worse, at best they will get more money) to get a certainty on how much they will receive, instead of gambling with how the market will react to the Brexit negotiations and possibly losing money in the process."

Unless you can divine the future you can't even say if this will result in a loss of income, because doing this might very well mean they end up with more income, and honestly given the state of the British government and their complete inability to get their shit together, I would be advising them to do the same thing their financial adviser told them.

EDITED: Should have put originally that they aren't really taking a hit on future income if the £ drops enough to offset the low interest rates they will pay on this, have edited the original thing I wrote to include this "(at worse, at best they will get more money)".

The value of the pound would have to plummet to near worthless-ness for this to be a sound strategy. And even if CIG really did think it would be this bad, they would have used cash as collateral, not the entirety of F42.
 
The value of the pound would have to plummet to near worthless-ness for this to be a sound strategy. And even if CIG really did think it would be this bad, they would have used cash as collateral, not the entirety of F42.

Can you point it out to be where it says that they used F42 as collateral? not being obtuse.
 

Primus

Member
Sections 4 and 5 of the document.

That's not what it says at all. From Ortwin's statement:

The collateral granted in connection with this discounting loan is absolutely standard and pertains to our UK operation only, which develops Squadron 42. As a careful review of the security will show and contrary to some irresponsible and misleading reports, the collateral specifically excludes “Star Citizen.” The UK Government rebate entitlement, which is audited and certified by our outside auditors on a quarterly basis, is the prime collateral.

Highlighting is mine, not from the original article.
 

Micael

Member
The value of the pound would have to plummet to near worthless-ness for this to be a sound strategy. And even if CIG really did think it would be this bad, they would have used cash as collateral, not the entirety of F42.

What? No it wouldn't, it just needs to go down a few % points, the £ since the brexit vote has came down almost 14% against the Euro, that is well well past most interest rates on most business loans (we are talking about low single digits, not double digits), and this is a loan on money the government owes, so interest rates will be even lower, adding to that they also added collateral to lower them even more, which won't really be needed to be used since once again government, so yeah the interest rates on this are going to be borderline meaningless, certainly well within the range to which the £ can drop.
 

TarNaru33

Banned
I'd say it is another L for the people that keep saying "this is it".

You'd think that constantly being wrong about whatever "it" is, would make people a bit more shy about their grand declarations.

As a person that wants it to come out, I think both sides is being outrageous. One side defends it too hardcore and the other side seem so concerned it is almost like they want it to fail.

I don't see this as a "HAHA you were wrong", I see this as a "eh tread lightly still, but somewhat hopeful".
 

WillyFive

Member
Well, we're still quoting Chris Roberts after 8 years, $150 million spent and basically nothing released so I guess we can quote everybody...

Whatever this flight sim/FPS/multiplayer game is that takes up 50 gigs of space in my hard drive is "basically nothing"?
 
As a person that wants it to come out, I think both sides is being outrageous. One side defends it too hardcore and the other side seem so concerned it is almost like they want it to fail.

I don't see this as a "HAHA you were wrong", I see this as a "eh tread lightly still, but somewhat hopeful".

Why do people keep saying this? this is not what is happening here. Not the people that are relying facts aren't being outrageous, the one citing things with no evidence and Derek smart.

This is not something that resides in a vacuum. Every time a Star Citizen thread is posted you see the same thing from the other side posting bs nor any well researched based concerns. Just the same kinf of baseless stuff Horzion: Zero Dawn got before it came out. With people trying to be Nostradamus.
 

Armaros

Member
As a person that wants it to come out, I think both sides is being outrageous. One side defends it too hardcore and the other side seem so concerned it is almost like they want it to fail.

I don't see this as a "HAHA you were wrong", I see this as a "eh tread lightly still, but somewhat hopeful".

So you didnt take a gander at the previous thread? where many people took the conspiracy theory hook line and sinker and were literally doomsaying the studio and game?
 

Crossing Eden

Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
So you didnt take a gander at the previous thread? where many people took the conspiracy theory hook line and sinker and were literally doomsaying the studio and game?
Don't forget how it'd be the final nail in the coffin for kickstarter.
 

Krisprolls

Banned
My guess is because its not coming to consoles which makes a certain contingent of folks extremely defensive.

Looks like a really bad guess. I've got a 1070 gaming PC, doesn't mean I like scams and crooks. I don't care if it doesn't release on consoles, I think it won't release on my PC either to be honest with you (I hope you're right and I'm wrong though).

Whatever you think about SC, selling virtual ship packs, some for up to $18000 (completionist pack), for an unreleased game is extremely shady business. It's sad if you can't see that yourself anymore. You don't need any conspiracy theory, only common sense.

But hey, I must be too old, I'm the one surely getting crazy and senile. I grew up with Atari 2600, how simple it was at that time. Buy a game, play. No $18000 virtual ships. Nostalgia...
 

Ivory Samoan

Gold Member
Apart from anything else, as a backer, I'm happy if at least S42 is released in by the end of 2018: I do worry about the development of the game after things like Andromeda leaving me raw and a bit sad: as is my right as a gamer/backer/whatever.

A lot of people getting quite upset about others being worried about a game they have invested in, I figure the game should do the talking: the problem is the delays don't help matters with this.... I hope/dream it'll all turn out amazing though, and anyone's worries are allayed steadfastly.
 
Looks like a really bad guess. I've got a 1070 gaming PC, doesn't mean I like scams and crooks. I don't care if it doesn't release on consoles, I think it won't release on my PC either to be honest with you (I hope you're right and I'm wrong though).

Whatever you think about SC, selling virtual ship packs, some for up to $18000 (completionist pack), for an unreleased game is extremely shady business. It's sad if you can't see that yourself.

But hey, I must be too old. I grew up with Atari 2600, how simple it was at that time. Buy a game, play. No $18000 virtual ships. Nostalgia...

You've still yet to provide any sort of evidence for the "scams and crooks". There is plenty of evidence the game exists and is likely to release, it's even playable right now in a form.

Selling ship packs is not shady. It's no different from Kickstarter and every other type ofcrowdfunding...because that's exactly what it is; crowdfunding. You get a reward in return for your donation, in this case you'll get those ships as a thank you for helping to support the game. It's no more shady than say, Shenmue 3 offering a $10,000 Kickstarter tier. According to you that's extremely shady because it's unreleased, were you against that as well?
 

K.Jack

Knowledge is power, guard it well
Apart from anything else, as a backer, I'm happy if at least S42 is released in by the end of 2018: I do worry about the development of the game after things like Andromeda leaving me raw and a bit sad: as is my right as a gamer/backer/whatever.

A lot of people getting quite upset about others being worried about a game they have invested in, I figure the game should do the talking: the problem is the delays don't help matters with this.... I hope/dream it'll all turn out amazing though, and anyone's worries are allayed steadfastly.

I'm in the same boat.

I've invested, I've played it, and I'm really fucking worried slash skeptical.
 
Looks like a really bad guess. I've got a 1070 gaming PC, doesn't mean I like scams and crooks. I don't care if it doesn't release on consoles, I think it won't release on my PC either to be honest with you (I hope you're right and I'm wrong though).

Whatever you think about SC, selling virtual ship packs, some for $1600, for an unreleased game is extremely shady business. It's sad if you can't see that yourself.

But hey, I must be too old. I grew up with Atari 2600, how simple it was at that time. Buy a game, play. No $1600 virtual ships. Nostalgia...

You have no say in what people pay for and for what. You don't have to buy anything, in either case you can just get a game package with a ship for 45 or 50 dollars, if you wanted to. But it seems you are just a man with a vendetta. No one is being conned, there are not crooks, nor is there a scam.

Unless you have evidence to the contrary. But there you are sitting at your desk or with your laptop, literally accusing 400 developers of stealing money. Everyone that spends money on that game, knows EXACTLY what they are doing. You aren't saving anyone.
 

Micael

Member
Looks like a really bad guess. I've got a 1070 gaming PC, doesn't mean I like scams and crooks. I don't care if it doesn't release on consoles, I think it won't release on my PC either to be honest with you (I hope you're right and I'm wrong though).

Whatever you think about SC, selling virtual ship packs, some for up to $18000 (completionist pack), for an unreleased game is extremely shady business. It's sad if you can't see that yourself anymore.

But hey, I must be too old, I'm the one surely getting crazy and senile. I grew up with Atari 2600, how simple it was at that time. Buy a game, play. No $18000 virtual ships. Nostalgia...

You can't really make an argument about embezzlement of funds and then feel indignation by pointing out the cost of virtual ships.
They are 2 wildly different arguments, that will get 2 wildly different answers.
 

MUnited83

For you.
Looks like a really bad guess. I've got a 1070 gaming PC, doesn't mean I like scams and crooks. I don't care if it doesn't release on consoles, I think it won't release on my PC either to be honest with you (I hope you're right and I'm wrong though).

Whatever you think about SC, selling virtual ship packs, some for up to $18000 (completionist pack), for an unreleased game is extremely shady business. It's sad if you can't see that yourself anymore. You don't need any conspiracy theory, only common sense.

But hey, I must be too old, I'm the one surely getting crazy and senile. I grew up with Atari 2600, how simple it was at that time. Buy a game, play. No $18000 virtual ships. Nostalgia...
It's still pretty simple. When the game is released, you can buy it, and you can play it. Nowhere do you need to buy any 18.000$ ship. What kind of crazy ass argument are you trying to make now?
Are you pissed at Shenmue 3 too?
 

Krisprolls

Banned
Selling virtual ships for huge sums of money is in itself a scam in my opinion, especially if the game itself is still not released years after the sale.

But whatever...
 

TarNaru33

Banned
So you didnt take a gander at the previous thread? where many people took the conspiracy theory hook line and sinker and were literally doomsaying the studio and game?

Yes, I read that thread, I didn't care for it. That is why I didn't post in it.

Why do people keep saying this? this is not what is happening here. Not the people that are relying facts aren't being outrageous, the one citing things with no evidence and Derek smart.

This is not something that resides in a vacuum. Every time a Star Citizen thread is posted you see the same thing from the other side posting bs nor any well researched based concerns. Just the same kinf of baseless stuff Horzion: Zero Dawn got before it came out. With people trying to be Nostradamus.

I am aware of that, but I don't see our side (the ones who actually want the game to come out) as having much to defend until the game comes out. I know it is annoying, but we shouldn't be petty because they are.
 

Krisprolls

Banned
That was not a compliment.

How about you go complain about Shenmue 3.

Ah ah I know it wasn't your intention. Still, it was a compliment ;)

Shenmue 3 doesn't sell $18000 virtual goodies, so not the same thing at all.

I suspect they really try to release Shenmue 3 so it's another difference.
 
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