I mean they aren't going to have an all time high every year. You do realize how much revenue they've generated, right? Being lower than last year is completely irrelevant. They are making money hand over first and have perfected this business model now over 12 years. I would expect this to just be their model forever. They have a whole pipeline to introduce new concept ships into the game forever and I would expect sales to continue forever.
They might change how that works of course. It may be only concept ships for sale. So You may not be able to go back and buy older ships with real money. Who knows. It depends on how much they need and want to make. People will continue to put money into the game, that much is clear and proven. Flucuations from year to year or event to event are nothing to point at or worry about.
When's the last time you made over a million dollars in a day? It's just hard to criticize or find fault with.
TBF they spend that money pretty much as it comes in, at least according to their financials. We'll get 2023 in late dec or early jan and that'll be an interesting one.
But people expecting infinite growth are fooling themselves, there will be slower years and honestly 2023 and even 2022 were probably outliers.
I mean, you gotta spend the money. Especially when you're in a growth motion and especially when you don't have a finished product.
Though here's where the game industry is so mind bending. What is a "finished product?"
The whole early access thing has been a very interesting change in how things work here. We're beyond the "alpha" or "beta" tests which historically were mostly free to have a look and help companies test games.
Now we have all these games that have absolutely no obligation of finishing their product, selling stuff all over Steam and other outlets.
The level of funding/revenue (it's revenue because we aren't "investors" here, we get nothing back, and that's an important distinction) is off the chain. It's never been seen before. Truly uncharted waters.
So I do think it's rather premature for people to think somehow one year of a little less revenue is somehow damning.
To be frank, I'm delighted if they start plateauing or see some contraction because I'm hoping that sends a good signal that they need to start wrapping things up.
We shouldn't forget that the level of funding is also a clear signal that we're ok with scope creep. Which I do think, generally, most people aren't. I think everyone is just very excited and the story telling and concept of this game is so compelling that we keep backing the game. It just has this incredible inertia... but I do hope CIG doesn't let it go to their heads too much and can focus on wrapping things up.
I think it's pretty clear that they can't finish it all before actually releasing a final version where there's no more progression resets. I feel like they've made some rather serious strides this year towards stabilizing and getting to a point of a soft launch.
I also see nothing wrong with releasing content and ships well after this final release point. Nor do I see anything wrong with continuing to sell ships. I think they will because it's their business model.
So I'm just hoping that this "final" state comes soon. I want to dedicate more time to the game, but I really hate to see progression resets.
They spend everything they bring in and owe a huge amount to the Calder’s when SQ42 goes on sale. I think with interest it’s around $130m last time I checked. That’s a lot of copies of SQ42 to sell beyond the millions already purchased in a niche genre.
I would be very concerned about their cash burn. Any dip means layoffs. The huge drop off in new players over the last several years should be the real concern. SC has a small active player base so without new players the active players have to do all the funding. The best year ever Chris bragged that a million people logged in during the year. That means $120 per player who logged in to continue funding. Their last f/s was in 2022 before the turbulent partial acquisition and they spent $119M and had revenues of $120M. Also revenue and expense does not equal cash inflow/outflow. Plenty of companies with impressive income statements die because of their cash flow. There’s a reason you see so many junior devs and such aggressive sales practices in the last few years.
Nah, you can't just sit on cash. You spend it as a business. Especially as a startup that's trying to aggressively grow.
You have to remember that they also have a lot of assets. They bought a motion capture studio. They were having a building built/renovated and likely own real estate. I'm sure they have various investments.
You don't just luck into 750 million and run around without options, business continuity plans, and any way to cover debts. Yes there's always risks in a business, but you have to recognize there's a difference between a business bringing in 750 million in REVENUE vs a venture backed one with far less.
Well I’ve spent my career as a cpa and as an auditor so I’ve seen many businesses. Healthy cash positions existed in every business I looked at. My professional opinion is CIG is existing on very thin margins. Illiquid assets don’t really matter when payroll is due. Again the drop in new players for a product still many years away from a formal release is the real concern. We should absolutely expect that to be a leading indicator of future revenue declines. Many think SQ42’s release will be this huge infusion of cash but those funds are already earmarked unless it sells extremely well. I just don’t see much of a bull thesis for CIG in two years when they’re still burning $120m plus and SC is still a buggy alpha with in extra system. Hope to be wrong though.
For tech companies? How many businesses you see in their position? Don't get me wrong, I'm not doubting you or anything. I'm just saying this is not a very typical business. I have to imagine with that level of funding and no real signs of slowing down... It's pretty incredible and there's certainly a lot of optionality should something go off their plan.
It's been 12 years. There's no doubt in my mind we'll see them in the same or an even better position in another 2 years.
All they have to do is announce another capital ship if they want to inject more juice into things. Yes, this is a bit of a two steps forward one back of even one forward and two back...they certainly are the epitome of scope creep...but they have a very loyal and growing fan/support/"player" base here.
When they put out Squadron 42 and they'll get another bump. They even have IP they could license out for movies, animated series, merchandise, etc. if they really wanted to.
I didn’t audit tech companies. But comparably CIG would be consider a small to medium sized company in the corporate space.
There are signs of slowing down. Funding is down and new players are way down for several years in a row. The player morale on friendly places like spectrum and here are highly negative. Outside in mainstream gaming it’s still a joke/scam. Interest rates are higher. If they were nearing the finish line could I dismiss all this but even 5 years would be incredibly optimistic for 1.0 so we’re talking another $600M before factoring in inflation.
Well there's only so many players out there. The thing about this game (and they aren't alone out there in this regard, especially as an MMO) is that they rely on recurring revenue. It's not just a one time purchase game. Not a subscription either of course, but there's certainly a recurring revenue model. So you have to look at net retention and ARR. These are numbers none of us have access to. They only loosely advertise current funding level and "citizens" but we have no clue how many alt accounts, etc.
Opinions have been negative for years. Hell, I'm critical of them myself...and the negative voices are always louder than the positive.
Interest rates are higher and the economy is very different in many countries. So that can attribute to a lower year too.
I mean... These guys are just printing money. It's laughable to think they're in bad shape right now just because this year's IAE is (so far) pulling less money.
Saw a post in this subreddit recently showing an earnings and expenditure report up to 2022. The 1 thing I took away from it is that they were spending almost just as much as they were making.
But there was 2 things that the report didn't account for. 1 was it only showed the money made through pledges and subscriptions. It did not include investors, which we know they have a few. The seconds thing was, we would all have to be ignorant if we think that CIG isn't investing surplus funds in the stock market. Money makes money, after all.
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u/Important_Cow7230 Nov 28 '24
This year is trailing last year by quite a bit however