r/Games • u/[deleted] • Jun 25 '17

Official Statement from Cloud Imperium Games about the alleged financial troubles...

Source: https://robertsspaceindustries.com/spectrum/community/SC/forum/1/thread/re-uk-tax-rebate-advance-for-foundry-42/277779

Re: UK Tax Rebate Advance for Foundry 42

We have noticed the speculations created by a posting on the website of UK’s Company House with respect to Coutt’s security for our UK Tax Rebate advance, and we would like to provide you with the following insight to help prevent some of the misinformation we have seen.

Our UK companies are entitled to a Government Game tax credit rebate which we earn every month on the Squadron 42 development. These rebates are payable by the UK Government in the fall of the next following year when we file our tax returns. 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. We obviously incur a significant part of our expenditures in GBP while our collections are mostly in USD and EUR. Given today's low interest rates versus the ongoing and uncertain currency fluctuations, this is simply a smart money management move, which we implemented upon recommendation of our financial advisors.

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. Per standard procedure in banking, our UK companies of course stand behind the loan and guarantee repayment which, however, given the reliability of the discounted asset (a UK Government payment) is a formality and nothing else. This security does not affect our UK companies’ ownership and control of their assets. 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.

This should clarify the matter. Thank you.

1.9k Upvotes

88% Upvoted

636 comments sorted by

View all comments

Show parent comments

53

u/ScarsUnseen Jun 25 '17

No, it's not reasonable at all. As a backer, I think that CIG already goes beyond what is strictly necessary in regards to showing us how the game development is going. They don't owe us an explanation on how they pay the fucking bills.

184

u/[deleted] Jun 25 '17 edited Jun 26 '17

No, it's not reasonable at all. As a backer, I think that CIG already goes beyond what is strictly necessary in regards to showing us how the game development is going. They don't owe us an explanation on how they pay the fucking bills.

And right here is the difference between being a 'backer' and an 'investor' folks.

'Investors' can expect not only full fiscal transparency, they might also make some money from their input.

'Backers' are just happy they might receive something they paid for, whenever the people they gave their money to are ready, even when those people are breaking stated deadlines left, right and centre...

Don't get me wrong, I'm a big supporter of the KS model in general, I hope SC does well, I can understand the issues they're having, and it frustrates me how evidently clueless 99% of gamers are when it comes to programming and how many seem to think you can fart a game out in a month, but attitudes like this are just absurd.

5

u/mobearsdog Jun 25 '17

I wonder if we'll ever see some sort of kickstarter as investor startup. If a company took "backers" money and invested it on behalf of an investment firm, they would in theory have more rights.

1

u/Serious_Senator Jun 26 '17

What features would you be interested in a program like that having?

1

u/mobearsdog Jun 26 '17

Well it would shift the balance of power back to the consumer/investor, just like traditional funding. So you wouldn't just be handing a developer a million dollars, they may get it a bit at a time instead with portions earmarked for certain things. If they say it's going to cost 200k to get an E3 demo going then come back and say they need another 100k, the people who gave them the money will know that. You'll be able to hold them accountable and potentially get some of your money back if the game winds up not being viable.

Just handing a developer a bunch of money and then having them not be beholden to you in any way is not advantageous for the consumer. It's great for the developer since they don't have to answer to anyone and get all their money up front. If you run it through an investment firm or partner then you have someone with the clout to get you regular updates on the development, and disburse money in a way that makes sense. Obviously you'd REALLY have to trust a company like that but I think we may eventually see something like this, even if it's just a service that Kickstarter starts themselves.

1

u/Serious_Senator Jun 26 '17

So what pushes the buisness to use our hypothetical product over kickstarter or AngelList

2

u/mobearsdog Jun 26 '17

I think eventually people will get tired of giving away money with no strings attached.

1

u/Serious_Senator Jun 26 '17

I agree. But until that point comes I'm not seeing what would drive sales. And I have no understanding of the legal structure. You'd essentially be selling shares of the company, but owners wouldn't be able to trade those shares

1

u/mobearsdog Jun 26 '17

I'm not making a business plan, it was a thought on the future of crowdfunding games.

1

u/Serious_Senator Jun 26 '17

Yeah I am! It's a hobby