Well, I believe that there is no suggestion made that the collateral would include an actual functional game (insert joke about how even star citizen isn’t a functional game here, heyooo!). Part of this would depend upon how the term “game” is actually defined in the terms, but we do not have access to that, and so it would be pure speculation.
However, I know from experience that there is not necessarily an assumption that deliverables (or in this case, collateral) imply complete and independently operable works. I’ve personally worked on contracts which specifically did not include required dependencies, ultimately resulting in the recipient needing to pay license fees for the portions which were developed separately from their project.
In this case, if you removed star citizen, SQ42 definitely would not function as a playable game, but this does not mean that it would have no value. Things like musical scores, art assets, etc. which are specific to the SQ42 game could still potentially have value. Certainly not the value of a complete game, but you wouldn’t really expect such value for a fairly small loan.
And since this loan is against expected tax payments, (akin to accounts receivable from a customer who is guaranteed to pay), the only real risk for the bank is that the payments would come under the expected amount. But the bank could establish pretty easily how likely that is, and could decide that risk is low. They are still going to get paid some large portion of their money back, in that the payment from the government itself is the prime collateral.
So, worst case for the bank, they get paid what the government is estimated to pay F42, plus whatever value they can squeeze out of the collateral, which is likely not huge. That seems like a reasonable move for the bank, assuming they did their due diligence and F42’s financial records looked good.
So I guess, to me, the notion that the collateral presented is not a functional game, is not in fact a problem. It’s what I would expect.
Indeed, it’s kind of what most of the folks here also would expect, which is why it’s prompting questions like, “why on Earth would they mortgage their entire work for a few million pounds?!” I think the answer is, they didn’t.
To be fair, the loss of the collateral would actually be far more of an incentive for F42 to make the payments, than is value in the hands of others. It has more value to F42 than it does to anyone else.
Again though, without terms of the loan, it’s hard to know for sure, and I’m certainly not a lawyer. I respect your view and experiences as different from mine.