And many more happier ones, I’ll have you know. Sir.
Oh sure, it could totally be a bad situation (arguably, we knew they were in a bad situation before this). I’m just not sure we can read much into the extent of the security, rather than the existence of the loan. In my opinion, if they were going to get a loan at all, it would be with an extensive security package like this. But I do think we should bear in mind that, unlike 38 Studios, CIG do at least have revenue coming in, even if it could easily dry up.
They should just learn from Croateam: why pay payroll when money is tight when you can instead, just. . . NOT!
Right. You’re looking at it from the loaning institution’s perspective, and your logic there is sound.
I’m curious about looking at it from Cloud Imperium’s side of things. As you note:
- They have a revenue stream coming in
- This loan is not for a great deal of money
But… - The collateral associated with this loan means forfeiture and likely liquidation of all assets if it defaults.
So…considering point 1, that they apparently do generate revenues, why does CIG need a small loan? How close or over on 30-60-90 day terms are they with creditors, in other words?
And given: revenue stream (apparent, at this point we don’t know that amount), loan size (loan appears to be small-ish)…Why would you put your entire project at risk of forfeiture and liquidation?
If the answer to the right of the equals sign is “This is all fine,”, those are the elements of the equation left of that sign that right now aren’t adding up for me.
Only question now is whether Derek takes the high road or goes “nyaa nyaaah nyahh toldja so”.
My guess is he’ll start out trying to be professional and “saddened for what it means for the industry” and whatnot and then swiftly descend into schadenfreude and mocking.
Does this at least indicate is that non-sale run-rate of 1.5-2.5mill is not covering current operating expenses?
Maybe they have lump sums in long term investment or non-liquid assets, forcing a short term loan, but the timing still seems weird in that they have had five months of predictable revenue from which to plan asset liquidation or prepare other contingency. Unless, maybe the run-rate sustains, but they have some other debt milestone or balloon payment due which the short term loan will cover?
One other explanation mentioned was hedging - with the decline in the pound, perhaps the cost of the loan is less than the cost of bringing money into the UK with a poor conversion.
Hah nice, checkmark on “saddened for what it means for the industry”. On the edge of my seat-- will the mocking commence?
Wait up a sec, maybe Derek ain’t all that bad after all!
I think this counts as a nyaa nyaa toldja so.
@sharaleo: Derek has substantial character flaws, primarily that he can’t allow any random jerkoff to speak ill of him on the entire internet without responding and fanning the flames. But he isn’t crazy, he isn’t like Cleve.
He’s fighting all the scams: from questionable gaming projects to US politics. He’s a one man machine against the system.
The biggest difference between 38 Studios vs CIG is that CIG has already been paid for a product they have yet to deliver. All that revenue coming is is based upon the promise of delivering a product to the consumer - if they actually finish the game it’s already been “prepuchased” by a huge number of people so the only upside for revenue growth is either recurring payments, subscriptions, or lots and lots of new players. IE finishing the game might really not bring much in the way of new revenue. 38 Studios could at least barely plausibly argue that on release they could sell 3-5 million copies, even if that were fantasy at best. CIG might claim that this would be the hit of the century, GTA V style, and promise hundreds of millions of recurring payments from SpaceWhales or something, but i’m not sure the game is really built around a model they can monetize in that way.
He’s not the Derek we want, but the one we need. The Dark Knight.
Derek 2020.
A bit sad to hear I wont be playing Wing Commander 6(?) in 2018, but it didn’t come as a surprised considering they had fucking starship doors in their office instead of a released game.
Also what i will surely find ironic in the coming chaos is that Roberts will still have defenders in the gaming world for years after squandering 150m but Sean Murray will be a dead man walking in gaming communities forever for his Great Crime of releasing a fully functional game with a great soundtrack that is boring because His Public Statements. Which, if it does pan out that way, would be another example of how social media transmutes saying something bad into a transgression worse than doing something bad.
If this now goes down the drain, I’m sure they could add as another question when you try to visit the US below “Have you ever been a member of the Nazi Party”.
“Do you trust Chris Roberts to deliver on his promises, and/or run a functioning project?”. Answering Yes to that should immediately have you renditioned.
The Turmp would probably have supported The Roberts though.
You misspelled “Turnip”.
This is pop pyschology at its worst but Chris Roberts should have gone the David Cage route and gone ahead and made a cinematic-style game. Quantic Dreams exists to fufill Cage’s childhood dreams of making knock-off B movie summer blockbusters - and hack though he may be, he actually does it. (I always got the impression Cage is the kind of guy that thinks something like Bad Boys is the greatest film of all time and the kind of film he can only aspire to achieve.) When i heard Roberts was hiring big name actors to make cutscenes it was clear to me he had lost the plot, that like Cage he really just wants to recreate The Last Starfighter, Enemy Mine, Star Wars and Star Trek and all the cool space films of the past, and do so in video games. But unlike Cage he doesn’t really know, in the end, how best to do this. His head is swirling with ideas, and he needs the heavy hand of management to direct him on the proper path.
I mean…software companies without a lot of material assets do take out loans, and those loans don’t involve eventual surrender of IP to the bank. I mean, that’s a pain in the ass for the bank, because to recoup whatever, they’ve got to hire outside consultants to sell everything off.
What they’d much rather do is say “OK, we’re looking at your monthly revenue stream of X dollars, and we’re looking at product release dates here and here, in which Y dollars seem like a plausible revenue return within 15, 30, and 45-day windows. If you default on your loan with us, we get Z percentage of those revenue sources, both existing and as they come on line until the debt and interest are repaid. Deal?”
In this case, maybe that’s the first line of recoupment for the bank…but for whatever reason, they only way they’d sign off on the eventual loan was complete forfeiture of everything. And they made that determination, presumably, after examining CIG’s bookkeeping.
Forgive me if I don’t buy the doomsday claims which have been made before, based on a guy on an internet forum.
The citations of Derek smart are even more hilarious, given his history of consistent failure.
I’m guessing this is some kind of best exit strategy, where they attempt to cash in optimally… as SC, in it’s inevitable death throes, flips and flops like a fish out of water sustained only by the tears of backers.