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Cloud Imperium Financials 

Hello & Welcome to some more Star Citizen, Cloud Imperium Games have posted an update to their financials this also gives us more details of  where they are in terms of 2019’s success for them fund raising wise and a much deeper picture of their monies at the end of 2018 and the health of CIGs bank balance.

Spoilers they have lots of money but are also spending it and expanding their company. But let me summarize and highlight some of the information here and what it may mean for the games.

The 2018 accounting shows the continued growth of Star Citizen with a record-breaking year funding. Following the minority investment of $46 million received in 2018 they have targeted investment into the marketing and infrastructure of the business, to prepare for the future launch and promotional activities of the games in development. This generated a $2.4M increase in direct cost over 2017, as well as an increase in salaries for staff in those areas, which created a reduction in their retained profit reserve. Without such expansion the net cash-out for 2018 would have been less than in 2017.

The minority investment has strengthened the Group’s balance sheet, providing security to the business and most importantly has generated an increased reserve from which Cloud Imperium will market and promote the ground-breaking projects our community are allowing us to develop.

For 2018 Pledges, Subscriptions and Other Income (which includes incentives, partnerships and promos) all totalled $48.9 million beating the previous best by over 4 million.

Pledges are up 8% to $37.8M and subscriptions where I would have expected them to drop off a little they are up $7% to $3.3M at an all time high.  Other income also reached its highest level to date up $2.2M to $7.9M, providing a pledges and income total of $48.9M, 12% up on 2017.

Talking about record breaking funding conversely 2018 was also the most expensive year for the games development as well.

56.1 million spent almost 34 million in salaries for the 521 CIG employees and contractors.

In 2018 CIG employed:

408 Development Staff

77 Publishing, Community, Events & Marketing Staff

36 General & Admin Staff

This saw 57 new staff for the year, buy only 11 of these were Devs.

The total staff figure should be around 550 for 2019 with the additional staff mostly filling dev roles.

In 2018, Cloud Imperium continued to grow as a company. There is a focus on developing in the UK and Germany as it is more cost effective than solely operating from the US. Also there has been an increase of senior level devs being hired, which makes sense as they have a large amount of junior devs working for them that would massively benefit for just working & senior management / interaction

The Marketing side of the game has increased too much of this growth in cost was caused by increased customer numbers and engagement, a substantial part of the higher cost can also be attributed to additional investment into our marketing infrastructure. This prepares Cloud Imperium for future initiatives and is consistent with the goals articulated during the announcement of the minority investment in May 2018.

There are many other factors to an increase in spending as well.

The austin office expanded.

Average Salaries Increased across the board.

Expenses have increased as the need for more servers, hardware & maintenance continues to grow with the game and player base this also has had the need for additional customer service reps & even data hosting.

Some legal fees for tighter governance, increased insurance and a general strengthening of its legal and accountancy engagements were made I also expect that fees for the Crytek Lawsuit were listed here too. This has Admin at $1.3 for the year up from .8 the year before.

Contracted Dev Costs represented 3.5 million in costs, these are to studios like Turbulent and Concept Artists. We should see a merging of costs in 2019 with CIGs partial acquisition of the Turbulent studio’s stocks.

So where does this leave CIG financially?

At the end of 2018 they had spent $7.2 million more than they had made that year. Taking their 14.2 million reserve to 7 million.

However this is also added to the 46 million investment they have bringing their cash reserves to around $53 million.

And it’s this investment and cash reserve that is one of the major reasons why CIG seem to be spending more money on new staff, expansion and marketing, they have the money to be able to spend and develop the game for over 7 more years at this rate.

But that investment was supposed to be used as far as I am aware to promote Squadron 42 Episode 1 and to get them comfortably across the finishing post without having to compromise product quality.

“Without such investment the business would not have spent as much on those areas in 2018 as it did, as it is constantly mindful of balancing its development and publishing spend to its current and projected income.”

CIG have reported ending 2019 again with record breaking funding for the year, surpassing 2018 by a significant margin. They have continued to bolster marketing in 2019 as well as devs.

CIG are trying to build a company for the publishing and marketing of their games as well as their development and they have been moving towards getting their Playable Alpha of Star Citizen more playable and into more players hands BUT ALSO getting Squadron 42 Episode 1 into a state where they can start marketing it. And that’s the thing here, CIG need to start moving towards getting SQ42 out the door to prove they have what it takes to release a AAA game as a new studio and self publisher. Assuming they are going to release it within the next 18 months I would hope that CIG are spending money and getting ready for marketing with that in mind.