CLOUD IMPERIUM GAMES GETS LOAN
Dr. Derek Smart PhD prophecies the end of days
has popped up that, on the surface, seems to suggest that the makers of the long-awaited await Star Citizen may be in financial trouble. News popped up on Press Start that UK-based Foundry 42, a subsidiary of Cloud Imperium Games, has taken out a loan with the bank Coutts & Co, and has leveraged as collateral a large amount of the company’s intellectual property.
Basically - miss a payment, and the bank then owns the assets.
It sounds more drastic than it is, however. For one, Coutts - a financial institution that only deals with high value, reliable clients, like rock stars and even the Royal family - is not in the business of handing out loans to failing companies. It would much rather make its money from interest, than random bits of an unfinished game.
Further, the document that revealed the news, and was found by a NeoGAF poster over the weekend on the UK website Companies House ( as reported by Inquisitr. com), points out that it’s only Foundry 42’s assets that are up as collateral - that means only assets pertaining to the standalone Squadron 42 are in question, not Star Citizen itself. Which CIG then reiterated on its own forums, going on to add:
“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.”
It’s essentially a pretty standard bit of business process. But it says a lot about the complex expectations around this company and this game - and the $150 million it’s already made via various forms of ship-sales and crowdfunding - that what is effectively normal practice for many other companies (such as Apple) has caused such a shockwave among both Star Citizen fans and detractors.
Derek ‘Battlecruiser 3000’ Smart is arguably the most vocal of the latter, and of course he was quick to light the pyres of Star Citizen’s once again impending doom via his blog. But watching Star Citizen crash and burn seems to be his only career now, so maybe take it with a grain of albeit entertaining salt.
“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?”
The truth is that this is such a high level of business operation that it’s hard to work out either way what - if anything - the loan means. As backers ourselves... It was exciting to be a part of this game four years ago. Now, we chalk it up as a speculative investment that may one day show a return.