Star Citizen‘s coffers just got bigger, as its parent company has raised an additional $46 million in venture capital, in addition to the $211 million in crowdfunding it has brought in over the past five years from 2.2 million fans. On top of that, it’s also releasing its financial history and announcing that its science fiction game, Squadron 42, will launch in the summer 2020.

It is perhaps the most extraordinary release of information about a major game in progress that I have ever seen, driven in part by regulations in the United Kingdom as well as the company’s own desire to be transparent with and crowdfunding participants who want more information. All for a game that creator Chris Roberts says he always wanted to create. This data is exactly what I wished I had when I was assessing the costs and revenues for Rockstar Games’ Red Dead Redemption 2.

The CEO of Cloud Imperium Games and Roberts Space Industries, Roberts said in an interview with GamesBeat that the funding for Cloud Imperium Group comes from Clive Calder (his “family office”) and Keith Calder’s Snoot Entertainment, who are well-known figures in the United Kingdom music business. Under the deal, the investors will own 10 percent of Cloud Imperium, and Roberts will still retain control of the company and hold 75 percent ownership. The post-money valuation of the company is $496 million. Not many game companies ever get to this kind of valuation, especially those that haven’t yet released a game.

The result is a remarkable amount of transparency behind one of the biggest projects under way in the game industry, and it is fitting as fans, crowdfunders, and skeptics have been asking more information from Cloud Imperium Games for a while. Roberts said he believed the best strategy is to be as transparent as possible with fans.

Image Credit: Michael O'Donnell/VentureBeat

“We’re open. We’re public. We’re committed to spending all the money we bring in on development,” Roberts said. “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?”

While Roberts can use the new funds as he wishes, the whole point of raising more money is to develop full marketing campaigns for the launch of the first game in the Star Citizen universe, the single-player Squadron 42 that finally has a launch window. Star Citizen is the larger persistent multiplayer universe, where players can explore worlds and plunder other players as pirates in the science fiction world.

Both are extremely ambitious games.

“The goal of Squadron has always been to have you as the player feel like you’re living this huge science fiction event movie,” Roberts said. “You’re emotionally connected to it. There’s a level of performance from the various characters around you that gives a human connection and an emotion that potentially you haven’t seen or had before in most games. We’re trying our best to push the tech in terms of bringing the actors in — their likeness, their performance, how they fluidly behave. People have seen some of this stuff in prerendered cinematics, but I don’t think anyone’s played it in a game where it’s all fluidly happening around you — where it’s gameplay, but it’s of a cinematic quality.”

Image Credit: Cloud Imperium

Cloud Imperium Games confirmed that it has 520 people working on the overall Star Citizen universe, compared to 464 in 2017 and just 13 people in 2012, when the project was in its infancy. Details were not released for 2018, which hasn’t ended yet, but Roberts said that the year has been the company’s best ever, with more revenue coming in for the early access version of Star Citizen than ever before.

These details are crucial in part because the fans have sometimes wavered. Rumors were rampant at various points in the game’s history that Cloud Imperium was about to run out of money, largely because it reportedly spent a lot more than it brought in through crowdfunding. But a report signed by Cloud Imperium chief financial officer Simon Elms says that the company’s auditors have approved the information released, which has been described in as easy a way possible, Elms said.

As for the complaints, Roberts said it is a work in progress.

“A fair amount of our backers totally get that,” he said. “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.”

Image Credit: Cloud Imperium

As far as worker numbers go, the chart below shows that headcount in the U.S. — primarily in Austin, Texas, where the company is based — was the largest percentage within the company from 2012 to 2014. But starting in 2015, the headcount in the rest of the world — primarily in the United Kingdom — became the largest block of employees. The company continues to add people as it nears the launch of Squadron 42. Revenues have come in over the years in the form of presales of games, which means players are paying now for games they will play in the future. Every day, new money comes in through presales. The trick is to not spend ahead of that money.

“Our approach was that we wanted to — the money we’re bringing from crowdfunding, we’re committed to spending on the game and development,” Roberts said. “If we saw a change in that velocity or trajectory of the revenue coming in, we would make an adjustment on our internal development spending. We have a few levers to pull, but we’ve been pretty steady as we’ve gone along. We felt comfortable in our planning on that.”

The new investment was made equally into each side of the Cloud Imperium Group (including both the U.S. and U.K.). Roberts said this all funding round allows the company to dedicated most of its pledge money to development, publishing, and community engagement. Meanwhile, the new round will be used to prepare marketing campaigns for the launch of Squadron 42.

Image Credit: Cloud Imperium

Roberts said that two new board members, Dan Offner, on behalf of the investors; and Eli Klein, as an adviser to the company, have joined the boards of Cloud Imperium UK and Cloud Imperium US. Yet Roberts said he retains full control of the board and group (the umbrella company).

During 2018, Cloud Imperium released into early access its first planet, Hurston, in the overall Star Citizen universe. It also released areas in the multiplayer game known as the landing zone, Lorville, four new moons, 32 new flyable ships, and other updates. The latest quarterly update also added Object Container Streaming (OCS), which is a piece of technology that had been in the works for four years. OCS improves the frames per second, allowing for a faster graphical experience for players. It takes advantage of the available central processing unit (CPU) power, resulting in frame rates in the triple digits. One of the keys to the experience is that players will reportedly never have to see a loading screen, even as them move from space to the surface of a planet.

“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,” Roberts said. “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.”

Roberts also released a public roadmap for the remaining development targets for Squadron 42. That will allow fans to track the game’s progress toward completion.

Image Credit: Cloud Imperium

“When we started the campaign for Star Citizen and Squadron 42, I said that the crowdfunding would go towards development of the game,” Roberts said.

He noted that the marketing expense will be big because Cloud Imperium’s games will be going up against other Triple-A games that have tens of millions of dollars in advertising campaigns behind them. Other developers tackle this problem by partnering with a publisher for the marketing and sales of the game, but that results in putting the game’s destiny in the hands of a third party, Roberts said. And he doesn’t favor that.

Roberts said the company turned away from traditional private equity and venture capital — two of the most common sources of big capital — because of concerns about whether they truly understood what the company’s long-term goals were, and how those were more important than short-term profits.

In the process, Roberts said he met Clive Calder (a billionaire) and his son Keith, who have both been interested in the confluence of entertainment with the ability to directly connect with an audience online. Clive Calder founded the most successful independent music company, Zomba, which was home to some of the biggest music acts in the world. Keith Calder is an independent film producer: his Snoot Entertainment’s most recent films are the critically acclaimed Blindspotting and the Academy Award nominated Anomalisa.

During their first meeting, Roberts said that Clive Calder talked about how he wished that Zomba had ways to bypass the media gatekeepers in the same way that Roberts had done through crowdfunding. That wasn’t possible 15 years ago, but Roberts said that Clive Calder’s views indicated he would be sympathetic to the need to focus on long-term development and patience. Roberts said the investment helps secure his company’s independence.

Among the details in the report: U.S. contractor costs for game developers fell from a high of $8.8 million in 2014, down to only $300,000 in 2017. That reflected the shift of work to overseas locations as well as the conversion of contractors to full-time employees. Costs in areas of operations — such as online service, customer support, marketing, and servers (which number in the hundreds on Amazon Web Services), rose to $7.1 million in 2017. That cost will continue to rise.

Elms said in his report that the accounting shows that the group is “diligently spending the money we are collecting from our backers and customers on game development and publishing.” Over time, the company has gotten better at scoping the scale of development needed, allowing it to adjust both the timing for the launch and the number of developers on the two games. Elms said the current month is the best the company has ever had in terms of finances.

Roberts joked in our interview, “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 piña coladas on the back of our super-yacht. … I can’t go and buy myself a $50 million yacht with it.”

Roberts said the team is working hard as the work ramps up.

Image Credit: Roberts Space Industries

“No one wants to make an OK game. They want to make a great game,” he said. “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.

Image Credit: Cloud Imperium

While millions of players have already paid for their games, Cloud Imperium is betting that millions more will buy the game once it is completed.

“We obviously anticipate that when Squadron comes out, that’s going to be a big revenue-positive event for us,” Roberts said. “We have a bunch of people who’ve backed for Star Citizen and pledged for Squadron, but that game has potential to reach millions more people than our current base.”

As for the valuation of the company, Roberts said, “We actually did a valuation, an investment bank valuation process. I’m pretty proud that we’ve built a company to this point that’s worth almost half a billion dollars. But I think that if it all works, if Squadron comes out and is big, and then Star Citizen turns into this online universe that people just go to — I’m not going to say it’s World of Warcraft-sized, but it has the potential to be that kind of destination. If it does that, you’re talking about a much bigger number than we’re talking about here.”