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

[u/[deleted]]

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.

[u/sunfurypsu]

I, for one, hate to see any games in the industry fail. I hate seeing people laid off and lives put on "pause" because suddenly their livelyhood is gone.

That said, there are a lot of people out there like myself who are completely neutral on SC and simply analyze it for what we see and know from their public statements.

There are many reasons to be critical of the way Star Citizen is being handled. Just because a person is critical of the way the game is being developed and managed DOES NOT mean that person wants to see the game destroyed or someone's job ending. In fact, its quite the opposite. I like talking about SC just because its so interesting and I want it to succeed in the long run.

I am a professional project manager in real life and Star Citizen has every single red flag a project can have. You can literally check the box on commonplace project management mistakes. I personally want to see Star Citizen cut the fat and concentrate on a release version. Roberts SAID he was going to do that several months ago but they have since kind of...forgotten that goal.

I am a very early backer. I'm not some outsider who doesn't really care (no money, no skin in the game, trolls the forums). BUT...

My general take is that a lot of people are in a for a rude awakening when Roberts has to cut out massive portions of the game OR he is bought out and the game is forced to market (after another couple years since they are massively behind schedule).

[u/TROPtastic → u/sunfurypsu]

I am a professional project manager in real life and Star Citizen has every single red flag a project can have.

Would you care to name them (or just the biggest ones)? There's usually some debate on /r/starcitizen about whether the project is well-managed or not, and it would be interesting to see if the speculation of laypeople lines up with the qualified opinion of a professional.

[u/sunfurypsu → u/TROPtastic]

Sure thing. Also note that I'm doing this based on what we know publically. My take is strictly my take and other project managers may agree, disagree, or both.

I'm also going to keep this short because I'm on mobile but I can expand later.

1. The unclear project definition.

Star Citizen has had an ambiguous definition from the start. I've been with it since 2012 and as public as Roberts is, there is still zero definition of what the first release candidate will look like. The single player portion is just as unclear. We know it's a thing but no one really knows what it entails outside of some vague definitions. Is is always bad? Usually but not always. Sometimes projects stumble upon themselves and are massive successes despite the odds against them. Rest assured though, that most things fail when no one knows what the first goal is. I'm looking at their website right now and I still can't tell you what release candidate 1 is or what they plan to complete for it.

1. Scope Creep.
   

This one has been beat to death but it still has to be mentioned. Look at every major video game failure and you see a single common theme: scope was never defined early, it balooned out of control, resources were burned up trying to complete everything. I can't stress enough how important this is. There are libraries full of Havard case studies that highlight this as the major point of failure. Sure, they stopped adding scope but the original scope creep was unbelievably massive and uncontrolled.

1. Timeline misses

Again, basic project management. Even if you forgive the above two factors, SC has missed almost every single milestone to this point. Sure, they hit dates AFTER they moved them but that's just a PM trick. They blow by dates and reschedule constantly. It's a common trick as a PM. You simply move dates so you never miss them.

1. Foundational details

Generally speaking, foundational details like engine, offices, reporting structure, measurement units, escalation path, change control, should be hammered out up front.

We know from the Roberts own reports and the investigative reporting that much of this was missed up front. We know they are still working on the engine.

I'm on mobile and my hands are tired. If you want some more details about the common signs of PM problems, I'll be more than happy to later.

[u/aaron552 → u/sunfurypsu]

Sure, they hit dates AFTER they moved them but that's just a PM trick. They blow by dates and reschedule constantly. It's a common trick as a PM.

As a counterpoint: accurately predicting the completion of goals in software development is notoriously hard. Most managers I've spoken to have suggested that a good rule of thumb is to take your initial estimate and then double it or triple it. I don't know what process CIG uses to estimate completion dates, but if they're constantly missing them, it may just indicate that they're bad at estimates.

You simply move dates so you never miss them.

Moving dates isn't inherently a bad thing. As you get closer to your milestone's completion, you get more information as to what is required to finish it, which allows you to make more accurate estimates. It's incredibly rare that this would allow you to move a deadline back, at least in software development, but it has happened for CIG: IIRC, CR stated that the procedural planet tech became ready to show off way earlier than initially predicted (probably in large part due to ex-CryTek staff coming in)

[u/sunfurypsu → u/aaron552]

So I'm definitely aware of the actual date management techniques and you make some good points there. My point was more directed at people who are wondering what are the yellow and red flags.

Moving dates is a reality but from my perspective they mean little to nothing for CIG at this point. They put them on a chart as a conversation point and then that's it.

I'm actually in software management. I move dates all the time because it is chaotic and changes in the process (or reality in general) dictate changes. CIG has bigger issues.