Star Citizen Dev Denies That It's Facing Financial Trouble

It's actually just an advance on a tax rebate.

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Anxiety grew among Star Citizen fans when it was noticed that developer Cloud Imperium Games appeared to have taken out a massive loan from Coutts, a UK banking institution, with the entire company given as collateral. This sparked fears that the studio was facing financial problems. Today, however, Cloud Imperium assuaged these concerns by stating that what appeared to be a loan was really an advance on a tax rebate.

Taking to the studio's forums to clarify the situation, co-founder Ortwin Freyermuth said that Cloud Imperium has an agreement with Coutts that allows it to get an advance on a tax rebate. This lets the developer to avoid unnecessarily converting other currencies to British Pounds.

"Our UK companies are entitled to a Government Game tax credit rebate which we earn every month on [Star Citizen's single-player campaign] Squadron 42 development," he wrote. "These rebates are payable by the UK Government in the fall of the next following year when we file our tax returns. [We] have elected to partner with Coutts, a highly regarded, very selective, and specialised 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," he continued. "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."

You can read his whole statement here. Star Citizen itself is excluded from the collateral this agreement requires; further, Cloud Imperium views this as a formality as it's "absolutely standard" and "the UK Government will not default on its rebate obligations which will be used for repayment."

Star Citizen has had a long and complicated development history that includes raising over $150 million in crowdfunding since 2012. However, it hasn't been without criticism, due in large part to several delays. In 2016, developer Cloud Imperium Games even refunded a backer $2,500 after he complained to California's Attorney General. At this point, some parts of the game are playable on PC, but the full game still doesn't have a specific release date.

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Avatar image for douglasdc8

I'm really surprised that so many gaming web sites like this use a trolls comments and push his comments, when he has openly stated that, and quote when someone asked smart about LOD and 3000ad being finished this was his comment quote D Smart :I keep trying to focus on Star Citizen; others keep trying to focus on me and my games: I’m semi-retired; so I don’t give a shit really.

the same sort of misinformation about 2.6 that was spread round, the biggest person and hater of star citizen was the one spreading lots of misinformation in a lot of different reddit post and other forums and on twitter and you take DSmarts word as gospel and the word that was spread that Star Citizen was going broke was who but DSmart and you all believed him and published his crap.

Avatar image for phoxoey

Game development companies run into countless issues, delays, and setbacks. The amount of resources and time required to create a game like this is enormous. The only difference between CIG from others is the fact that you morons don't know or see what goes on in other gaming companies. CIG has been fully transparent from the beginning. Instead of being impressed by the complexity of creating a game, you troll like the trolls you are.

Avatar image for raven6666

bla bla... Chris... continue... ignore the ones that live from the failure of others...

Give me the v.3.0 quick :)

Avatar image for thegoodhustler

we live in a world trump was elected........i think most people won't understand straight forward money management.

Avatar image for nurnberg

Intelligent people (like me) knew it was very shady since the very beginning. I tried to warn people but I was insulted instead. Let's see who is right... Right now, there is no sign whatsoever that this game is legit. Their promises about the game are totally unrealistic for anyone who has knowledge of video games. Chris Roberts probably spent all the money that he stole already.

Avatar image for zerohournow

@nurnberg: they do have a full alpha playing right now you know...maybe it will end up being crap or not what people wanted, but they are clearly working on a large and ambititous project. What signs are there that the game isnt legit?

Avatar image for HyperSonicClone

@nurnberg: You can't be that intelligent since you clearly can't read.

Avatar image for JudoHedgehog

Finding out out a company I gave a bunch of money to got what amounts to a payday loan would make me pretty uncomfortable. Fortunately I'm not an idiot so I didn't give a man who has done nothing but over promise, feature creep and miss deadlines any money at all.

Avatar image for deactivated-5bda06edf37ee

@JudoHedgehog: This article translated as "payday loan" for you? I'm sorry to inform you, but that means you actually are an idiot then.

Avatar image for icing

I love being an outsider to these things. The persistent haters that take glee in any potential setbacks, the armies of angry fans fighting back. And the few sprinkles of actual insight or logic that are drowned out by it all. So much fun to watch, I love it when I see a start citizen article.

Avatar image for no_one

@icing: I'm just here so I don't get fined.

Avatar image for jezh22

@icing: Here for the same reason, its just... beautiful

Avatar image for Utnayan

Mr. Scam man. Bring me a game. Make it the most expensive, that I've ever seen. Come out with features, of roses and clover, and ship a piece of shit that says GAME OVER! Mr Scam Man. My wallet's so alone. Don't have a space game, to call my own. All the millions that you see? Mr Scam Man scam me that dream.

Avatar image for wtf_666

scam citizen....

Avatar image for tincup

SO many ignorant AF comments here who so blatantly have no freaking idea what they are spouting as well as OBVIOUSLY not even reading the article in full. Good Lord! if you only realised how stupid you sounded BEFORE you posted. LOL

Avatar image for deactivated-5bda06edf37ee

It's amazing how many people failed to understand the article.

Avatar image for yukushi

Here is the problem, lets say people gave me money to build a house, i start building then I keep going back for more money saying, give me more cash, I will build more bedrooms, I will make it taller etc, I tell you that you can move in but you are living in a half finish house and I keep asking for more money to make it bigger, so I am always getting cash and the house never gets finished.

Avatar image for dostunuz

Scam Citizen is understatement now. This is beyond fucked up.

Avatar image for maxz26

@dostunuz: Did you even read the article? CIG isn't in any financial trouble

Avatar image for vackillers2017

@maxz26: When you take massive loan out to a banking firm, and you put your ENTIRE company up as collateral... then you are in serious financial difficulty....

Avatar image for GarGx1

@vackillers2017: Read the article.

It's not a "massive loan", it's a cash stream that they can access in lieu of payment of a tax rebate from the UK Government (the worlds 5th largest economy). Also the "ENTIRE company" is not up as collateral, it's only Squadron 42/the UK office.

Take a loan out from any bank and you need to have collateral to secure it, no matter how guaranteed the payments are. Doesn't matter if it's private or corporate loan.

Avatar image for Slyster1181

I'm sorry but they wouldn't have had to put up everything as collateral if they were just wanting an advance on the game tax credit. And it isn't " partnering " even you sign everything over to the bank.

If they default everything is gone. And any shared assets between SQ42 and SC will need to be redone leading to even more delays on top of the already happening ones.

Something is going on and no amount of PR spin can hide that fact.

However as long as they make their payments everything should be fine.

Avatar image for soulfulDAGGER

Derek Smart was right.

Avatar image for maxz26

@soulfulDAGGER: LMFAOO suure

Avatar image for robertoenrique

The Herbalife of video games, The Bernard Madoff of Video Games, The Stanford of Video Games.....

Avatar image for danielduncan

I see the cult members are in full effect still. Though, at a quick glance at the comments section, these days the haters outnumber the cult members. It appears the hype is starting to die down a bit.

Avatar image for wexorian

Well many companies expect that Pound will go down a lot, Even i don't trust their scam this news ain't thing.

Avatar image for skipper847

If this is really in Financial Trouble then every game on kick starters goals should be reviewed by law and updated. If you no what I mean.

Avatar image for ccgod

@skipper847: If it was really in trouble they'd be selling capital ships like crazy and they're not so they're fine.

Avatar image for MJ-X

Haters gona hate, the company is fine along with their project.

People need to stop trailing the ignorant bandwagon and start following development.

Gamespot articles are not pure journalism and mostly sensationalist with every attempt at click baits.

Avatar image for Gladestone1

@MJ-X: Bro this is gamespot, most of these kids dont know the real deal like we do, its all doom and gloom on this page..We know the real truth. 3.0 is do out soon, so im not worried an thats the start of the game..So no worries bud..