Star Citizen’s Financial Crisis

Recently you may have seen or heard that Chris Roberts’ epic scoped space game “Star Citizen” is in financial chaos. It started when CIG took out a loan in one of Great Britain’s banks. Derek Smart would love nothing more than for you to believe this is it, CIG is done and dead. As usual, he’s wrong,  yet his network of FUD is spreading these false rumores like crazy. Even large “reputable” publications are picking up this false news. So what’s really going on?

The Real Deal of Star Citizen

Chris Roberts, the mastermind behind Wing Commander and a slew of other highly successful games has studios across the world. From the US, Mexico, Great Britain and several other locations. This allows the teams to work 24 hours a day on making this game a reality. But the cost of doing business in all these countries adds up in very unexpected ways that most people don’t know and may never need to know.

The biggest killer is Foreign Exchange Rates (FOREX). The US dollar is pretty strong these days and that’s what most of their money is in. Then there’s the Euro which covers most of Europe except Britain which never converted their Great Britain Pound (GBP). These exchange rates fluctuate wildly over the course of days, or in some cases, seconds. The EUR/USD rate is relatively stable fluctuating by a few pennies or fractions of pennies each day. For a tourist this is a matter of a few dollars at the end of the day. No big deal. But for business, this is the difference of several thousands of dollars. Some times it can be a gain, other times a huge loss.

The Simplified Basics

So even if say it costs a fixed rate of £100,000 a month to run the British branch, at the rate of (today’s writing) $1.27 for every £1 that’s $127,000 dollars a month in “real costs” ($27,000 lost in raw exchange before transfer fees and tax…). In 2017 alone the exchange rate Fluctuated between $1.19 and $1.30. Which over time adds up to quite a bit of wasted expenditure. Why operate in England? I have no idea but it may be related to his English accent :-p

The Solution

The UK offers a tax credit for game developers. This is paid out on a quarterly basis and is part of Roberts solution to cut costs without firing people. CIG formed a partnership with a bank in England to furnish them low interest loans with the “tax credit” as terms of payment. This bypasses the tidal wave of bank fees, FOREX rates and a whole list of other wasted expenditures. Paying small interest over all the other fees becomes a money saving strategy, more than a fiscal crisis bailout as Derek Smart would have you believe. In the end it gives more money back to the development of Star Citizen and avoids the hassle of international business overhead.

Who’s Derek Smart?

I mentioned this guy a few times, in the beginning and end or the article. He’s not really worth a mention as he’s more of a troll than anything else.

Derek is a “game developer”. I use that term loosely as his games run excessively long development cycles, don’t age well and end up dying, being remembered as failures. Battlecruiser 3000ad was one of them and his constantly in development “Line of Defense” is his other. I believe LOD has been in development since 2010 and looks like it was released in 2004.

Since the late 1980’s when Roberts released Wing Commander a nemesis was born. Derek filed lawsuits and dedicated his life to bringing down Chris Roberts. He’s been a constant thorn in Star Citizen’s side and has stooped as low to discredit and defame Roberts’ wife. At every opportunity he writes a frantic article of how Star Citizen is failing and how he’s helping people get their money back. In essence he’s trying to force the company to fail.

Derek’s twitter and other social media is a stream of insanity, hundred’s of posts each day criticizing Chris Roberts and staging a war against CIG and it’s employees.

In reality, if Derek Smart shut off social media and focused his energies into game development, Line of Defense would have been released years ago and probably would have been one hell of a good game. He used interesting technologies for Battlecruiser 3000ad but devolved into a worthless troll because of his own life failures.