Reasons not to panic about star citizen

[trademogul]

Me and Jon (and an anonymous source that rhymes with rechfood) were discussing the financial situation of CIG. As Chris Roberts stated anyone with knowledge of the industry can deduce the cost of the game. We came to the conclusion that there's nothing to worry about. Heres the break down.

Running costs

Price of commercial real estate in Santa Monica ($615 x the published size of their office 2900 sqr feet) / 12 months of the year  = $148625

Without getting too much into detail (you can go look it up yourself for the other locations) we came to the conclusion that the rent for all studios is between 500k and 700k a month.

average salary at cig is ~82k a year * 261 employees / 12 months a year = 1.783 million a month for employee costs.

infrastructure is complicated and between computers internet and cloud servers food and various other costs we estimate the to be around 100k- 150k a month for the company 

leaving the company expense at ~2.5mil at the low end and ~2.8 at the high end

which works out to 30 mil a year. Now accounting for start up costs and various other fees we estimate the total expenditure to be between 70 mil and 83 mil.

leaving them with a cash reserve of 20 mil - 8 mil

Now for the income,

the none sale months in the past year have brought in ~ 900k 

the sale months bring in ~ 3 mil 

what this all means

if CIG stopped bringing in money today then they would last between 8-3 months 

If they continue to bring in revenue and the 100mil is quote "fully funded" like roberts has said they have enough capital to operate for 7-12 months if they stop taking in capital at 100 mil.

so basically your games going to come out. stop worrying.

 

 

 

 

Edited October 6, 2015 by trademogul

[Jon1812]

Good discussion. After discussing worst case scenarios and looking at rough estimates, I feel much more confident that CIG will do great. There is definitely no need to panic.

Edited October 6, 2015 by Jon1812

[Albuss]

yeah i ran the numbers a while ago why are people still freaking out ?

[trademogul]

yeah i ran the numbers a while ago why are people still freaking out ?

cause you didn't make a post about it duh.

[Schatten]

Another good reason: It's just a game! ; )

[Danakar Endeel]

average salary at cig is ~82k a year

Really? Wow! I'm working in the wrong country. Over here I would just get ~20k a year for a fulltime job

[Gargoyle]

Really? Wow! I'm working in the wrong country. Over here I would just get ~20k a year for a fulltime job

You're not the only one.

[Minted]

You're not the only one.

Well get yourself to Uni and head down to Manchester! Although I'd be surprised if the average wage there was £50,000+

[Juntau]

I agree, but I think the estimated average wage is on the VERY high side. Which is fine as estimating tool since it makes the total figure higher than they would actually be. With that in mind, unless the rumors of CR buying personal real estate with backer funds the company is still very solvent. Regardless, at this stage in the game, if needed I am very confident the CIG could secure external funding sources if absilutely needed, which will most likely NOT be the case. 

 

Plus this doesn't account for the fact that they have publicly stated that they are still restructuring the company and some of its assets to become more efficient, both financially and developmentally.

[Fredworth]

Um... okay. Looks like gaming industry salaries are way different from industrial salaries then. Here in Germany - for big software companies like SAP, Siemens etc - salaries of 100 000 to 120 000 EUR per year and software developer are pretty common. On top the company would have to spend social insurance, health insurance etc - 28% on average (https://de.wikipedia.org/wiki/Lohnnebenkosten), so we are talking 128 000 to 153 600 EUR. I would have assumed similar rates for top of the line game developers. 

I made a small spreadsheet - attached - with the following assumptions:

• for the sake of the argument: cost per employee per year 150 000 EUR (not everyone is a top developer, some office rent etc included as described by @trademogul
• number of employees has risen over time - first year 65 on average, second year 130, third year 195, fourth year (which just started) 260
• money taken in is linear (it's not, i know, but i am too lazy to check for actual numbers)

Under these assumptions we dont have to fear anything, cashflow is positive till at least 12/2016. Feel free to correct me or input more accurate data 

Kostendeckung.xlsx

[Gargoyle]

Well get yourself to Uni and head down to Manchester! Although I'd be surprised if the average wage there was £50,000+

I'm a little old for that these days, done the uni thing 20 years ago. I'm actually a project manager and get a decent wage, not enough to hit higher tax bands though.

[Minted]

I'm a little old for that these days, done the uni thing 20 years ago. I'm actually a project manager and get a decent wage, not enough to hit higher tax bands though.

40 is the new 20! I suspect it would be an interesting area to work in but I'm not all that convinced the wages in the gaming industry is all that high but with high expectations and potentially work that may only last for as long as the game development.

We've also certainly seen a number of relocating from the CIG team too, there's clearly a lot of moving to where the work is.

[TitanEntity]

i really hope that everything i have been reading is a bunch of hate talk, perhaps CIG would have to get support from publishers in future if they run short on cash, i think the best thing for them to do is, keep marketing, keep on bringing out sales, keep creating new ships and new things for people to want to buy..?

[Gremlich]

i really hope that everything i have been reading is a bunch of hate talk, perhaps CIG would have to get support from publishers in future if they run short on cash, i think the best thing for them to do is, keep marketing, keep on bringing out sales, keep creating new ships and new things for people to want to buy..?

Publishers are the last thing any independent game development company needs. They ALWAYS make the developer push the product out the door before it's done. Or have you missed the slew of minimally viable games over the past few years?

Edited October 8, 2015 by Gremlich

[TitanEntity]

I was debating that option at worst case scenario, rather a game, than no game imo, but i know what you mean.. The games that have been comming out have been extremely wank as of late, all graphics, no gameplay, no originality

Sent from my SM-P605 using Tapatalk

[Gargoyle]

40 is the new 20! I suspect it would be an interesting area to work in but I'm not all that convinced the wages in the gaming industry is all that high but with high expectations and potentially work that may only last for as long as the game development.

We've also certainly seen a number of relocating from the CIG team too, there's clearly a lot of moving to where the work is.

Oddly I actually done software engineering at Uni, long before you  could do anything even loosely related to the games industry. Unfortunately (or maybe not) when I left the first job I got took me all over the world dealing with fire damage electronics. I ended up staying in that industry, although it's changed a lot since then.

Edited October 8, 2015 by Gargoyle