Star Citizen ATV, Squadron 42’s projected 2020 beta, and Cloud Imperium’s $46M private investment

    
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This week’s Around the Verse does touch on the 3.4 release of Star Citizen, but the big news is definitely from Squadron 42, which has released its big roadmap as promised. While Roberts says the Star Citizen spinoff game is “definitely on the downhill slope right now” and most of the game’s main features will be finished by the end of 2019, the AI is the major “unknown risk.” Right now the alpha is projected for early 2020 and then beta by Q2 2020.

In Star Citizen business news, it looks like that investment round that’s been kicked around Reddit for the last few weeks is a real thing. As the “investment fact sheet” confirms, the Cloud Imperium conglom raised an additional $46 million from private investment firms (“Clive Calder’s family office and Keith Calder’s Snoot Entertainment”), to bring Cloud Imperium’s total “money valuation” to $496 million. The deal also adds two new board members to the mix, though Chris Roberts “retains full control of the Board and Group.”

“This investment helps secure our independence,” Roberts says. “We may not have the resources that an Activision or EA have to launch one of their tentpole games, but we now control our own destiny in marketing Squadron 42. […] Beyond this, this investment gives Cloud Imperium the ability to take the long view when needed or pursue a business opportunity that we normally could not have. It allows us to grow as a company.”

The accompanying Squadron 42 Road to Release letter further explains that the minority (10%) investment is specifically intended to “fund the upcoming marketing and release needs of Squadron 42.”

In his letter from the chairman out today, Roberts also recaps the year, notes the teams have expanded to 500 people, and includes historical data on the company’s finances through 2017.

“Overall, the accounting demonstrates that the Group is diligently spending the money we are collecting from our backers and customers on the game development and publishing, as set out from the beginning,” says CIG’s CFO. “There is not a direct annual correlation of our spend to our net income. A buffer arose in the early years as we wrestled with the scope of what our customers wanted, and whilst we accelerated early deliveries through third-party contracting, we were cautious with our growth and expenditure until we could better define what was needed. Since the scope of the production has become better understood, we have been able to plan our growth and optimize our areas of expenditure while still evolving based upon our open development ethos. This allows us to focus in on the detailed areas and key technologies and content that we believe will make this ground-breaking production a great success.”

All in all, the 2020 beta plan – and do note that this is not the full release – marks one of many public admissions of delay for the game. Here’s just a brief recap of some of our coverage going back to 2015:

Finally, this just would not be a proper Star Citizen post without a link to the alpha 3.4 list of playable – and buyable – ships.

Source: Fact sheet, ATV, S42. Thanks, Fastcart, paragonlostinspace, Cotic, Emanuel, and woolydub.
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Annoyed badger

oh dear, more delays on SC, and now seeking additional funding from outside sources, from a game that was supposed to be 100% crowdfunded….and has raised so much money in crowdfunding….

Looking very like a 38 studios situation here in the making.

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Skoryy

I read the article and the comments, and somehow the words ’38 Studios’ just keep coming to mind.

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Fervor Bliss

Did they get you to trade
Your heroes for ghosts?
Hot ashes for trees?
Hot air for a cool breeze?
Cold comfort for change?
Did you exchange
A walk on part in the war
For a lead role in a cage?

Alyn
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Alyn

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wayshuba

And… we follow a similar pattern as Digital Anvil. I don’t think this is a scam, never have. But CR’s track record of managing is horrible throughout his entire career and this is going to end up like all his other train wrecks he ran since leaving Origin.

With this outside investment and seeing the roadmap for SQ42, I have a funny feeling this is not going to end well for anyone at this point.

As someone familiar with these think of a “payday” loan investment. CIG is going to need more money from them as it goes, losing more equity position and eventually control.

Maintaining control of the company and board are an illusion. Once you have taken outside investment the whole dynamic changes. You really think these investors care about a latest, greatest, be all, end all space sim? Nope. Now it just became all about getting a return. CIG just setup a direct outcome conflict between it’s new investors and the product backers.

Nope. CR just put his company into a similar position as he did with Digital Anvil and the WC Movie. Just watch how this changes very quickly over 2019.

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Chris Ochs

This private investment just makes no sense. The numbers don’t add up from the perspective of how the hell do they think they will get a return. You don’t invest 1 million to make 2 million in tech, and especially not in games. It’s such high risk the potential needs to be around 20x investment.

The share percentage makes sense. 10% is about right for a seed round. And since crowd funding doesn’t dilute anything this is in an odd way very much like a seed round.

But man SC will have to basically deliver Wow level success for investors to see a good return. It’s not like this is the first case of stupid money and tech startups. But given who is involved in this, I don’t know I just keep thinking something fishy is going on. And I’m generally much more inclined to assume stupid.

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wayshuba

The numbers, from an investment perspective, do add up (and the valuation really gives it away) but I am almost reluctant to say how for fear of being flamed to death.

Suffice it to say think of it this way:

Previous Backers – Make investment to get a product
Outside Investors – Invest to make more money

Those two views are in direct conflict with one another at this point. Bear this in mind for the future. The investors do not care if a ground breaking product is delivered, or even if a product is delivered at all. They only care about a return on their capital. The play here to achieve that is NOT in releasing a final product.

I can see exactly where a potential great return on that investment is here. I can also see that if it is delivered on, there are going to be A LOT of very upset backers.

How this will end up is that you will have backers that wanted SQ42 and the Persistent Universe but they are going to get Freelancer as delivered to market.

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Tee Parsley

The kicker in the conversation could be Amazon. They want tentpole items for their streaming and server businesses. They may already be invested in CIG. Since their goals are different from just making money on the game itself, Star Citizen could be very attractive.

I’ve always thought that a replay of Freelancer/Digital Anvil was the likeliest course; and probably best for the game really.

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Matthew Ward

Frankly I’m amazed it’s taken this long.. Crowfall did crowdfunding at the same time as raising capital from private equity.

I just wish gamers had the wherewithal to see where they fit in this rather disgusting mechanism.

They provide risk free capital receiving nothing in return other that a goodwill gesture of a product that doesn’t exist and has no promise of ever existing.
Private equity have assurances of return and they hedge that shit entirely.
In the case of the company going belly up, they will be first in line for a refund shortly after the relevant government tax authorities.

Gamers? Not even in the equation.

Stop giving these fucking charlatans money. You are not helping games development, you are setting it back.

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Cosmic Cleric

Stop giving these fucking charlatans money. You are not helping games development, you are setting it back.

These days, I don’t think giving money to publishers is helping moving games development forward either. /shrug

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Matthew Ward

Yes, I fear you are correct

cmdr_cotic
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cmdr_cotic

Makes you wonder what will happen next, will they start seeking out more investors and if so, what will that do for the direction/polish (lol) of the game.

By the time Squadron 42 is released, assuming they can hit a deadline, the total cost is going to be knocking on $300 million and they’ve still got years of work ahead of them to deliver the fantasy that Chris dreamed up.

Completely out of all proportion.

deekay_000
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deekay_000

there will almost certainly be more investors before too too long.

not just for sq42 but also for sc pu. that being said, people have been saying this for years. meanwhile dumbass down there acting like he’s some kind of prophet genius. lol

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wayshuba

Keep – sell the company – on your list of options for the near future.

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dsmart

I remember when they were claiming to have played all the SQ42 missions. The roadmap basically says they were lying – this whole time.

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Joe Blobers

DS basically you served your usual twisted vision of “whatever CR di is Evil”. Nothing new. Next :)

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dsmart

Never change Joe – never change.

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GoJammit

I know I’m gonna hate myself for this, but for once, I agree with you. I remember YEARS ago they said they had playtested all of the missions.

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Joe Blobers

Denice, probably because after buying the same re-skinned game from publishers during more than a decade gamers decided to give themselves an opportunity to have what they want with the single guy who repeatedly delivered memorable games? all for 35/45$

Beside hundred whales who have big pocket for anything in their life, whatever their hobby, backers are just girls and guys with a goal… and investors saw an opportunity to make a good profit in 2 years.

Clearly you are the one not validating crowdfunding model. Fine. Just come back in 2020.

Godnaz
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Godnaz

Im not fanatic, also not a cynic but man… some people need to think about what just took place before they comment. $46m investment on a legally declared $211m funded project with a total asset value of nearly $500m.

The numbers are in the binding report, which they cannot lie on. I’m not saying they have a game yet but cmon, dude. If you think it’s a scam, or investment scheme at this point you are either nescient to what’s going on or just begrudging because of your own personal bias.

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Sean Barfoot

Agreed. I’ve never bought the idea it’s a scam or anything. Just don’t think it’s been very well, or ethically managed.

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dsmart

It’s a scam. All of it. Having money and/or investors, doesn’t make it anything less.

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Joe Blobers

… But DS is it anything more? :)

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Bruno Brito

Oh, this will be good.

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wayshuba

It’s neither a scam nor an investment scheme.

But the primary goal is no longer to deliver a product.

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DoomSayer

Why do you think their goal is to not deliver a product?

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wayshuba

No. Because all one has to do is look at CRs history over more than two decades. This man does this for one reason – to make himself money.

The better course of action at this point to make himself money is to sell the company in 2019.

Now that he has taken in PE, his first and main goal is to produce that exit event. The best way to do that is to sell the company.

In other words, he sells, he and the investors make a ton of money, and the buying company is then responsible to all those backers he raised money from. All upside for CR and exactly what I would do if I were in his shoes.

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Isey

Exactly.

I wonder how much of the money raised to date was spent on marketing, to raise more money, to market more, to raise more money.. wait, spend some on developing a game?

I hope this works and can’t wait to play the core game in 2030. (Which will be rebranded as a battle royale…)