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Star Citizen loan clarification: it's an advance on their UK game dev tax rebate
- Thread starter Raticus79
- Start date
A weakening pound means dollars go further in the UK, i.e it's good for US companies funding UK operations (which is largely what we have here). Pre-EU ref it took $1.56 to get £1, now it takes $1.26 to get £1. If you're paying £1 million a quarter on your UK operation, you've basically getting about 20% more bang for your US buck.
Nice to see you've posted without reading literally anything about the OP or the situation at hand.
Quality post, really.
Crossing Eden
Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
At this time he's still the only other person perpetuating the nonsense that they're in financial trouble besides you.
Derek Smart is however responsible for a shit ton of misinformation being spread about the project, and if you actually participated in the discussions around this game besides near constant concern trolling and then disappearances when called out, then maybe you'd know that no, people don't just accept every design decision as a stroke of genius and actually provide really good critique about features and such. Also, stop calling everyone who sees through you a backer. Not everyone looking forward to this game's development and are interested in it have spent 100s of dollars, I don't even think a single person ITT even has. So either drop that line of logic completely, or provide some receipts.
RubberJohnny
Banned
It's fun catching up.
I like Zalusthix moaning about the backers being considered to be all of one mind, in the Discord where they're all literally planning to post in the thread as soon as it's created to downplay the original story.
The funnest thing is KKRT admitting he doesn't know what collateral is, which apparently didn't stop him form wading into the topic and trying to shoot it down yesterday.
I like Zalusthix moaning about the backers being considered to be all of one mind, in the Discord where they're all literally planning to post in the thread as soon as it's created to downplay the original story.
The funnest thing is KKRT admitting he doesn't know what collateral is, which apparently didn't stop him form wading into the topic and trying to shoot it down yesterday.
That's some meta shit right there. Really fine argument you laid down. Never been to the discord myself, but I'm sure you're an expert on it.
Yes that's correct.
I was mistaken, it is simply just an advance on money they already going to get, a potentially more favourable rate than if they waited.
RubberJohnny
Banned
And with whole studios and a game hanging in the balance if they miss a payment.
Isn't that due to network issues more then optimisation? I had problems with my 1080.
Yes I was mistaken, it is just borrowing against tax credits.
Which is very good then because we will then now early if this game is sinking.
Saint of Killers
Member
I've no interest in the game just yet but it's still good to know the dev is not dooooooomed.
Crossing Eden
Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
FriskyrumX
Banned
Why does Apple need to take out a loan? Don't they make like Billions of Dollars every year? Also, maybe actually read the OP for your answer.
Lincoln6Vacano
Neo Member
The fun part is, I can't wrap my head around the fact that accounts get banned here for sarcastic jokes, yet some of the vitriol that gets spewed in this and other threads gets through unscathed.
neurosisxeno
Member
A studio (singular) and a part of the game. Yes. It's not all of CIG and their studios, just Foundry 42.
RubberJohnny
Banned
Oh that's OK then!
I'm sure were they to default and admit that they'd lost SQ42 and the bulk of their developers, "but don't worry, we're still working on the MMO", people would be reassured not angry that tens of millions just went down the drain and pledge further to start rebuilding their staff /s
Come on, it'd effectively be the end of the project regardless.
PM a Mod if you think someone is casuing trouble.
They can only miss payments if the UK government would go bankrupt. And nobody said they don't have money in case of a worst-case scenario, they are only hedging to get a better rate.
You were first feeding into baseless speculation and now that we have a very plausible clarification, you still need to try to spin this is in a negative light? Is it that hard to say, "yeah this wasn't as bad as it first seemed, I'm sorry". Nobody will hold a grudge against you if you did that, you know.
Quality answer, and yeah I did read the OP but still couldn't grasp why a loan is necessary when they have the fundings. But ok, quality time requires quality questions.
Yes, in the absolute worst-case scenario that you have zero evidence or reason to believe is happening, which is:
1. The UK government fails to pay back their 25% tax credit.
2. CIG is actually bankrupt and has been lying this entire time, whole game is a sham
3. Incoming funding dries up
If all of the above simultaneously happen to make them default on this, then yes it probably would be the end of the project. I'm not holding my breath though as they've been completely transparent this entire time with multiple detailed progress updates per week and great communication in general.
Let's say that you have the vast majority of your money in US dollars right this minute. If you thought it was reasonably certain that, as Brexit negotiations get underway, as May tries to get a new government together in the UK, as May may even be ousted as Prime minister, that the British pound, which has been going down since Brexit was voted on and is close to a high since then(it's gone down 4 cents to the dollar in the last month, though) could go down about 10% and you know you have a tax rebate in British pounds coming in, would you convert that money to US dollars instead of just taking a loan that is reasonably likely to cost you less than the conversion to USD until that tax money comes in and fills the hole and then some?
RubberJohnny
Banned
We've got development so transparent no one can
- agree when development started
- agree on a release date
- agree what features were promised
- agree how basic gameplay features operate
- agree what certain ships will look like
- agree how many players the mmo portion will support
- agree how many employees there are
- agree how much money has been spent
Just no, unless you are making some insanely risky loan, like if you are a startup that started recently, and even then will depend.
Bank loans to Businesses are in the single digit range, and this is an extremely low risk loan:
It's backed by the government money.
Backed by an independent auditor to make sure they aren't committing fraud (the biggest risk here).
Backed through collateral of company assets.
Is expected to be paid quickly.
As far as loans goes this is an extremely reliable loan, so there is no reason why interest rates on a loan like it would not go bellow the average interest rates, let alone go way above the average, which it would be if it was double digits (like really way above).
Lets put it this way if business loans were in the double digit territory, the amount of successful companies taking out loans, would grow quite a bit short.
As for why they gave more collateral than cash, it is pretty simple by definition the more collateral you give the less risk is involved for the lender in case you default, which can result in interest rates going down, which means the likelihood of them coming out winning from this also increases (not to mention they pay less if it doesn't).
I don't think that CIG is a financial genius firm, I do think they aren't anywhere close to being the only company to edge their bets on Brexit, not sure how much you follow it, but there has been a very severe cut back of investment in the UK, due to the uncertainty over Brexit, by firms, universities, even at an immigration level people have severely cut back, there is is now a 96% drop in EU nurses registering to work in the UK since the Brexit vote, the pound has dropped close to 14% since the vote (and that is just against the Euro), there is talks of closing down factories, suing the government if they get out of the single market and so on, it is a huge clusterfuck of which the UK government (and by extension the £) is not expected to come out ahead.
Will they win their bet or not? Who knows only someone that can divine the future will know if the £ will or will not drop enough to compensate for it, but it is definitely within the realm of possibility given that the Tory party hasn't even reached a deal with DUP, let alone figured out what to do regarding brexit, since they want to stop freedom of movement while having access to the single market, which is a borderline mutually exclusive scenario, since to have one they need the other.
Now, don't take this the wrong way, there is definitely a possibility that they could be doing this because they are having a cash flow problem, or even a straight up cash problem, and they just lied about it, but lacking evidence to the contrary, and with an official explanation that tracks well enough within the realm of expected possibilities, I would say one should go with the explanation that has more backing, and that is IMO the explanation they gave.
Crossing Eden
Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
The common consensus is mid 2012-2013 with the early prototypes, followed by creating the foundations of the studios and expanding over time to accommodate for the workload, engine modifications, etc.
Because there is no standard release date, because this isn't a standard game release.
Only if you constantly ignore all the people who tell you to look at the roadmap
Only if you constantly ignore player impressions and discussion.
What?
Because the studio itself hasn't decided.
Yet another example of information out there being actively ignored by people like you.
Because most people don't know the intricacies of their budget. For some reason you believe a studio blew threw 150Mil in record time.
It's almost like this is a work in progress and that the fanbase isn't an omnipotent hive mind...
neurosisxeno
Member
Post a proof of both of those things.
Vigilant Walrus
Member
It is so obvious that you're just deflecting and posting all this crap because you're a troll. I find your shitposting so annoying I actually googled "RubberyJohnny star citizen" and lo and behold, the first link that comes up is posts from you on other forums going back to 2014 shitposting stupid garbage about this game.
I'm convinced you're not here to want to have actual discussions about the pros and cons about this game. I believe we should have a healthy skeptic to Star Citizens development, but you're so obviously just out to shit.
And while I don't understand why you spend so much time trying to spread misinformation, false equivalencies and other conspiracy junk, it just kills me that a lot of posters will latch onto your lies about this game.
The mods tell us to stop engaging in pointless bickering back and forth.
The problem with engaging trolls like you is that the more someone comes in to try and set the record straight, it just gives you legitimacy because you clearly have a thing against this game that goes beyond a healthy dose of skeptism. Nobody would dedicate this many hours to shit on a game.
A lot of your criticism is half-truths, confirmation bias and bandwagon effect style rhetoric you could use to obstruct any discussion about any game.
I'm not a backer of this game, nor a "sim fan guy" but I hope that people stop listening to your lies, because anybody who sits down and really reads up on the development and transparency of this game, will know that they have shared more about their iterative process than any game ever.
SC might very well fail.
I'm skeptical that what the are trying to do can be done.
I also think it's going to take a long long time. But I don't think that, something be difficult, ambitious and highly risky is an argument for trying to sabotage and spread miscommunication.
I've worked in software development enough to know how difficult, expensive and time consuming these tasks are. And I can tell you with certainty SC is not some scam. We don't know if they will succeed or fail, but they are trying to make the game they are saying. The changes, postponing, expansion, removal, feature creep, overhauls. These all come with the territory.
They are normal. And this is why many ambitious AAA games are not revealed to the public before they've had a lot of their infrastructure built.
SC is still building the tools. Even after 5 years. That is how ambitious and insanely revolutionary this game is. But that is to be expected when you look into what they are trying to do.
If you honestly want to discuss the merits, and concerns of Star Citizen in good faith, you should come other peoples way in good faith.
That made sense. Thank you for simplify it a bit
Micael explained it a lot better than I did, but no problem.
They're working on a rota system.
Crossing Eden
Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
That's uh....man that's certainly something. Three years dedicated to concern trolling and spreading misinformation about one game? 
At that point all I can really ask is why?
At that point all I can really ask is why?Incredibly well said.
Camp Freddie
Member
I'm not a big fan of the SC development strategy, but the OP seems correct that this is just regular dull accounting stuff.
The £ is unstable due to Brexit and the minority government that could collapse at any time between next week and 2022, so it's better for financial planning to have the money now, rather than converting $ to £ now and relying on getting £ in the future at some unknown exchange rate.
If the £ falls further between the loan and the government payement, then CIG 'wins'. If it strengthens then the bank 'wins'.
Of course, loans are not a zero sum game, the bank always gets some interest and CIG always gets a benefit in easier financial planning.
For collateral, you usually put down 'everything' or a very fundamental and easily valued asset if you want a good rate and know that the collateral is not in any real danger. If I take a £1000 loan, it's secured on my house. Technically, the bank you take my house over £1000 but that'd never actually happen since I'd always find some other assets to liquidate instead. But putting down my house means the bank can trust me (or they have me by the balls if I betray that trust).
Also, securing against other assets is complex since it limits what you can do with them (e.g. if I secure a loan against my car, I can't easily trade my car in for a new one). Counter-intuitively, putting down 'everything' often gives you more financial freedom.
The £ is unstable due to Brexit and the minority government that could collapse at any time between next week and 2022, so it's better for financial planning to have the money now, rather than converting $ to £ now and relying on getting £ in the future at some unknown exchange rate.
If the £ falls further between the loan and the government payement, then CIG 'wins'. If it strengthens then the bank 'wins'.
Of course, loans are not a zero sum game, the bank always gets some interest and CIG always gets a benefit in easier financial planning.
For collateral, you usually put down 'everything' or a very fundamental and easily valued asset if you want a good rate and know that the collateral is not in any real danger. If I take a £1000 loan, it's secured on my house. Technically, the bank you take my house over £1000 but that'd never actually happen since I'd always find some other assets to liquidate instead. But putting down my house means the bank can trust me (or they have me by the balls if I betray that trust).
Also, securing against other assets is complex since it limits what you can do with them (e.g. if I secure a loan against my car, I can't easily trade my car in for a new one). Counter-intuitively, putting down 'everything' often gives you more financial freedom.
In Service
Member
I draft these documents for a living and they can get quite cumbersome. However, in my busy life, I can't seem to find a reference to the definition of "Game" in the charges for F42 and Imperium - can anyone see that for me?
Other than that point, the charges appear to be quite standard. Interesting that they assign the rights to the Game and then licence them back. I presume that this is to ensure that the assets are classed as Fixed Charge assets and within the control of Coutts - Fixed Charge assets are more important in certain scenarios than Floating Charge assets and control is an important aspect of that.
Despite what was said in some of the other threads, the grant of security over all of the assets of a company in the UK is common - it's a little more unusual in the US for legal reasons.
Other than that point, the charges appear to be quite standard. Interesting that they assign the rights to the Game and then licence them back. I presume that this is to ensure that the assets are classed as Fixed Charge assets and within the control of Coutts - Fixed Charge assets are more important in certain scenarios than Floating Charge assets and control is an important aspect of that.
Despite what was said in some of the other threads, the grant of security over all of the assets of a company in the UK is common - it's a little more unusual in the US for legal reasons.
neurosisxeno
Member
They never put all of CIG up, just F42, and CIG and Star Citizen are intentionally exempted. F42 handles the single player portion of Star Citizen--Squadron 42--and I believe since that's their only product they just refer to it therein as "the Game". Might be missing a reference document somewhere that assigns these things--"Squadron 42 will herein be referred to as 'the Game'". I imagine stuff like that doesn't need to be public record like the details of the agreement do.
It's mostly just 1-2 people who seem to have a dislike for CIG and Star Citizen perpetuating the idea that they put all of CIG's assets up in exchange for a line of Credit which is obviously false at this point. They already explained that much like Apple taking out a $6.5b loan when they had $187b in cash, it was for tax reasons.
It was a post that's easy to miss as it's the first post in this thread, but that post has an explanation:
Source: https://robertsspaceindustries.com/...hread/re-uk-tax-rebate-advance-for-foundry-42
Ortwin Freyermuth is the Co-Founder, Vice-Chairman and General Counsel at Cloud Imperium Games.
For context, this is a followup for these previous threads.
http://www.neogaf.com/forum/showthread.php?t=1396794
http://www.neogaf.com/forum/showthread.php?t=1396987
That's uh....man that's certainly something. Three years dedicated to concern trolling and spreading misinformation about one game?
Incredibly well said.
Gamergaters really love Derek Smart. Might be that. It feeds into their "there's a conspiracy" narrative and Smart plays his cards well by fueling whatever paranoia the pro-GG "journalists" have to manipulate them into giving himself more exposure. As such GG is vehemently anti-SC.
Crossing Eden
Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
I wouldn't say that RubberJohnny is affiliated with GG at all. But you're right tho.
jakonovski
Member
CIG has an idential charge/loan/whatever on their page on the banking site, whatever that actually means.
Oops
Looks like we got a troll. Who is set in his ways rather than having a conversation .
Krisprolls
Banned
You mean like 95 % of people on this board ?
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