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Star Citizen is the biggest crowdfunded video game of all time, with $211 million raised over the past five years from 2.2 million fans. But that isn’t quite enough to get the game to market, and so Chris Roberts, CEO of Cloud Imperium Games and Roberts Space Industries, announced today that the company has raised an additional $46 million in venture capital.
The money comes from Clive Calder and Keith Calder’s Snoot Entertainment, a couple of moguls in the United Kingdom music business. Under the deal, they will own 10 percent of Cloud Imperium, and Roberts will still retain control of the company and hold 75 percent ownership. The valuation of the company is $496 million.
In an interview with GamesBeat, Roberts said the money will be used to develop full marketing campaigns for the single-player game Star Citizen and the larger multiplayer sci-fi universe, Star Citizen.
On top of that, Roberts finally said that fans can expect the game to debut in the summer of 2020. And to comply with United Kingdom rules, the company is disclosing its full financial picture for the first time. Roberts is laying bare for all to see the previously secret details like how much money came in via crowdfunding, how much the money the company raised each year through crowdfunding through 2017, and how much the company has spent. At the end of 2017, the team consisted of 464 people. That’s a huge project.
Three top investment pros open up about what it takes to get your video game funded.
Here’s an edited transcript of our interview.
GamesBeat: I’ve been working on my Game of the Year for this year. I figure, as long as you give me something I can put on my list, I don’t care how long it takes you to make it.
Chris Roberts: [Laughs] I’m working hard on that one. I think you’ll like Squadron 42. That one’s going to be pretty special. It’s taking a bit of time, but unfortunately in today’s world, with the detail and all the rest of the stuff you have to put into it, it takes a lot longer than it used to in the ‘90s. But it’s fun, having such powerful technology to create a world. That’s one of the things I liked in Red Dead Redemption 2. They spent a lot of effort on creating the world and did a really good job of it.
GamesBeat: This financial information from you guys is pretty eye-opening. I’d love to see the same thing on Red Dead Redemption 2.
Roberts: I know! I saw your article talking about the budget and the mechanics, the amount of people they have. I know how much we spend and how many people we’ve had over time. I was thinking that your early guesses were probably closer to the truth than the later ones, when Take-Two was pushing back and saying, “We didn’t spend that much on it!” [Editor’s note: Take-Two did not push back on our report].
GamesBeat: No, it was more just some reasoning that came in from analysts as well. That kind of pushed my numbers around. But yeah, it was difficult to figure out. Of 3,000 names listed, how many of these people really earned a full salary for eight years?
Roberts: I’d guess what they did was, in the early days, had 100, 200, and then it slowly ramped up. In the last two, maybe three years you’d be in the thousands. They have a lot of content in that game.
I think they have more in the U.S. than we do, but they have a pretty big studio up in Scotland, which isn’t far from our U.K. studio where we have about 270 people. We don’t have nearly as many people as Rockstar does, and we probably pay slightly less than them, but I don’t think we’re too far apart. Our internal costs, I wouldn’t say they’re too far different from theirs. They’ve probably got more established people in the U.S. studios that get paid more, and of course they have Grand Theft Auto and all that stuff that’s been doing well. I’m sure they pay some bonuses on that. Squadron’s not out yet, and Star Citizen is still in a pre-alpha early access state, so we’re not handing out big bonuses to anyone yet. We’re spending it all on development.
But yeah, this stuff is always interesting. People don’t always appreciate how much work and effort it takes to make the modern game, where everyone expects this total detail and fidelity. People will complain that we’re taking it too long, but the flip side is, “Well, what about this beautiful snow simulation? Why don’t you have what this game is doing? You should do it exactly like that!” We all want to do that too, but it takes time and effort.
Gamers see something out there and want it like that, but then they also want it as quickly as possible. There’s always a bit of conflict that comes from that.
GamesBeat: There’s a feeling of raising the bar that you get from some games out there. It seems to put additional pressure on people, on top of what fans want.
Roberts: Oh, yeah. Anyone that’s making a game — all the developers I know, they’re not doing it to punch a time clock. You could probably make better money in business software. But they love making games. No one wants to make an okay game. They want to make a great game. When they see other games doing cool stuff, developers want to do that too, and that escalates a little bit.
And of course in our case, because we’re an ongoing open process, as we’re adding stuff people are coming up with suggestions and ideas. A lot of this stuff is really good, and we of course say, “Yes, we’d like to be able to do that.” On the Star Citizen front, we’re applying a different approach, which is more like — we treat ourselves like a live game. We’re constantly trying to improve it, even though we still have loads of features that we’ve committed to and we still need to do. We’ve made the approach of — it’s a kind of live, iterative process that’s ongoing.
A fair amount of our backers totally get that. They’re cool with that. I think there is some subset of people in the gaming world that don’t quite understand that yet about Star Citizen. They look at it through this lens of, “Is it released yet?” Which is a bit different to us. We’re in this weird early access phase where people are playing and doing stuff, but we’re still wiping the database now and then, doing new releases, changing functionality, and rebalancing stuff.
We’re in this neverland spot, which is, I would say — it’s not completely new to the business. Other people, like DayZ or even Minecraft in the early days, were in a similar status. But it is a newer way of doing stuff compared to the old way, where we did it shut away from everyone until it was finished and went out to the public.
GamesBeat: On some of the details here — were you required in some way to report financials for any particular regulatory reason?
Roberts: We’re split between the U.K. operation, which handles the rest of the world, and the U.S. operation, which handles North America. There are two Cloud Imperium entities. In the U.K., even if you’re a private company, you have to post your financials and board of directors and everything on Companies House, which is this U.K. regulatory body. We’ve been doing that for quite a few years.
Obviously in the U.S. you don’t need to do that, but we’ve always — since we’re so open, so public, there’s always a lot of — every time we post every year on Companies House, there’s always debate. People are trying to do the back-of-the-napkin math. “How much are they spending? Do they have enough money to finish the game?” There’s a lot of financial forensics happening.
We’re open. We’re public. We’re committed to spending all the money we bring in on development. We’ve told everyone on our backer side that the money we raise dictates the level of development spending and scope of what we’re trying to do with Star Citizen. So we’ve long debated–we’re already showing part of the picture, so why don’t we just show it all? We’re already open with how we’re developing it. In some ways we’ve had this internal debate for quite a few years. Why don’t we just publish the consolidated global numbers like you would as a public company so our backers can see where the money goes?
One problem we have is everyone just looks at the headline. “Star Citizen raises $200 million,” and so they immediately think we’re off on a deserted island sipping pina coladas on the back of our super-yacht. We have 500-odd people in five studios spread around the world and it costs money to run an operation like that. The money we bring goes all into development. So we said, “Maybe if we’re just open about it and show the financials people will understand that.” Of course there will probably still be some people that won’t, but we can’t do anything about that.
That was the impetus for sharing the financials with the community. It’s something we’ve discussed internally for a long time, just because we feel like we owe it to everybody who’s supported us. We’re open about development, so why not be open about the other stuff?