Cloud Imperium announced on its corporate blog on Friday that it’s secured $17.25 million in additional funding from existing investors, Calder Family Office, Snoot Entertainment, and ITG Investment. All three exercised a “one-time option to purchase further shares [at]… a discounted option price for existing shareholders that was pre-negotiated at the time of the initial investment in 2018.”
The Calder Family was previously involved in a round of investment worth $46 million back in 2018, which was meant to boost development on both Star Citizen and a related offline single-player action game called Squadron 42, starring Gary Oldman, Mark Hamill, and Gillian Anderson. Cloud Imperium was founded in 2012 by renowned developer Chris Roberts (known for Wing Commander) and went on to leverage the peak of video games crowdfunding, generating a record-breaking Kickstarter; public funding for Cloud Imperium surpassed $250 million as of last Christmas and is over $275 million now thanks to well over a million backers.
The cost of games has gone up with each console generation and as PC graphics cards become more powerful. Developers want to be able to take advantage of new tech, creating bigger and more immersive virtual worlds, and that means team sizes (particularly in AAA) have ballooned. It’s not unheard of for blockbuster games to have budgets of $100 million, and that’s before big marketing expenditures are factored in.
But for almost $340 million raised so far, and a project that’s been in development for the better part of a decade, the pressure is on Cloud Imperium to deliver something special with Star Citizen. It’s arguably a good problem to have, but Cloud Imperium’s harshest critics have compared the ever expanding roadmap and fundraising to a modern day ponzi scheme.
The game was meant to have been finished back in 2014 but then as funding grew, Roberts’ vision for the project kept growing as well. Forbes noted last year that it’s a game that “may never be ready to play.”
“Those 100 star systems? [Roberts] has not completed a single one. So far he has two mostly finished planets, nine moons and an asteroid,” Forbes pointed out in the middle of 2019. “This is not fraud—Roberts really is working on a game—but it is incompetence and mismanagement on a galactic scale. The heedless waste is fueled by easy money raised through crowdfunding, a Wild West territory nearly free of regulators and rules. Creatives are in charge here, not profit-driven bean counters or deadline-enforcing suits.
“Federal bureaucrats and state lawyers have intervened only in a few egregious situations where there was little effort to make good and a lot of the money was pocketed by the promoters. Many high-profile crowdfunded projects, like the Pebble smartwatch ($43.4 million raised) and the Ouya video game console ($8.6 million), have failed miserably.”
That same eye-opening Forbes report cites former Cloud Imperium employees who lamented the feature creep, micromanagement and lack of real focus from Roberts. At the same time, there are over 129 complaints filed with the Federal Trade Commission from customers looking for refunds as high as $24,000 (Cloud Imperium sells some ships for thousands of dollars each).
Roberts has claimed that Star Citizen, available currently in alpha form, is already fully playable in its current state and offers “more functionality and content than a lot of finished games.” But even in this state, the costs have been escalating. As was noted by Variety in 2018, Cloud Imperium was burning through $4 million a month in 2017.
“Clearly, there is a cost in delivering this substantial game to our community and whilst we carefully manage our server and deployment costs and develop technologies for increased efficiencies, this cost will increase as we deliver to more and more players,” the company said in financial documentation cited by Variety.
“The engagement with our community is also, of course, a direct consequence of our open development ethos, which has taken us to where we are today, and our events are growing in size and attendance. Consequently, it is not surprising that costs in this entire cost category are rising, climbing to $7.1M globally by 2017 and are likely to continue in that direction as we prepare for releases.”
This sort of constant fundraising, investment and never-ending development is completely unheard of in the games business. There’s no telling how this will end, or if Star Citizen will ever be “finished.” Meanwhile, Squadron 42 is supposed to enter beta by the third quarter of this year. Will it? It, too, has seen multiple delays. The answers for this whole saga just might be somewhere in the stars.
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