High BPO Research Costs And An Old FW Loyalty Point Exploit

Sometimes in a long-running software project new people come in and make changes that don't quite work as expected. I heard of one such example today in an interview The Oz did with CCP Rattati in a preview of the Legion expansion next week. In the interview The Oz asked about the high cost to research supercapital BPOs. Apparently the formula changed to include the expected item value calculated by the game. I smiled as I heard CCP Rattati blame a factional warfare exploit for expected values not being calculated correctly. 

The great FW exploit of 2012. Here's an explanation of what actually occurred almost 13 years ago with the launch of the Inferno expansion. The results of the investigation by Team Security were published as a dev blog.

Here's a fairly high-level explanation of how the exploit functioned and some background. With EVE Online: Inferno we released a change to the Factional Warfare system in order to encourage and reward PVP. What the change entailed was that we essentially decided to award people with “Loyalty Points” for killing other players rather than just awarding them for activities such as missions. The amount of LP rewarded is determined by the value of what is destroyed. The number we use to determine that is the “Average Price” value of each of the items destroyed which is calculated by taking an x day rolling average of how much the item was purchased for every x days. This is handled by a scheduled database job.

This system becomes exploitable when a player is capable of dictating a disparity between the actual value of the item on the market and the average price we use to calculate LP. This is most easily accomplished using items that are virtually never traded, as one or two major purchases can change the average, but it is not a requirement that the item be rarely traded in order for manipulation to occur. The most common method of doing so is that once the price has been manipulated enough it becomes possible to generate LP by simply buying the manipulated item, killing yourself with an alt in the opposing militia, then buying another one and killing yourself with it repeating infinitely. LP in this regard functions as a separate currency which can be converted back into ISK (Interstellar Kredits - the main currency of EVE Online) at a profitable rate. This can be compared to foreign exchange manipulation.

Team Security even provided a nice graph to show the impact of the exploit although the title was not-exactly accurate.

The impact of the Inferno FW exploit

And as CCP Rattati stated, the developers introduced some changes to the code to prevent the disparity between actual cost and "Average Price" in items in the future. But apparently the fix put in during Inferno was removed in Havoc. CCP issued an exploit notification at the end of November 2023.

Since the release of Havoc two weeks ago, it has become apparent that certain player groups have utilized both market manipulation as well as repeatedly destroyed their own characters (in some cases hundreds of times) in order to farm large amounts of Malakim Zealots Loyalty Points (LP) way faster than intended. Warnings have already been issued to the groups that were the biggest offenders along with confiscation of the LP and Blueprints that was acquired in this way.

Any groups that are found to be manipulating the market to increase the amount of LP gained from destroying friendly targets, or repeatedly farming large amounts of friendly targets, will be punished in accordance with our exploit section of the EVE Online Terms of Service.

Likewise, this exploit is now once again included in our Known & Declared Exploits list.

So I don't know if the Inferno code was put back in to stop the exploit. Looking at the known exploits list I see the LP exploit is still listed. Perhaps the exploit is still listed because who knows if someone else will remove the exploit fix in order to fix the pricing issue. After all, on a 25-year old software project like EVE Online who knows when someone who "knows better" undoes something preventing a huge problem.

What Is An Open Economy In An Online Game?

Last week CCP Games released an EVE Fanfest 2025 presentation titled "EVE Frontier - Open Economies." One of the four EVE Frontier presentations on Friday, I encountered a problem when trying to compose a review of the session. I didn't understand several of the terms used in the presentation. Instead of just passing along a summary I only half-understood I decided to look into the concepts of which I was unsure. The first question I encountered was: what is an open economy?

Turning the game economy into an open economy

I turned to Copilot for answers. Using the Frontier white paper and a dev blog as the base for the answers, the AI assistant came up with the following description.

In EVE Frontier, an open economy means a fully player-driven and interoperable economic system where players can create their own markets, currencies, and trade assets freely. Unlike traditional MMOs with fixed in-game economies, EVE Frontier allows for real-world economic interactions, meaning its economy is not isolated from external markets.

The game uses composability, meaning all items, currencies, and objects can be combined and interacted with dynamically. This allows for unpredictable outcomes, as player actions shape the economy rather than developer-imposed constraints. Additionally, energy and risk play a crucial role—every action requires fuel, ensuring that automation and botting have diminishing returns compared to human decision-making.

EVE Frontier’s economy is designed to be open-ended, meaning developers do not dictate trade volume or impose artificial constraints. Instead, the economy evolves based on player-driven trade, value creation, and market speculation. The game even incorporates real-world economic theories, with experts analyzing inflation, pricing behaviors, and resource distribution to maintain balance.

Okay, what Copilot provided sounds in-line with what I heard at Fanfest. Of course, the next question is: what is a closed economy?

In an online video game, a closed economy refers to an in-game economic system where all transactions occur within the game world, without external influences like real-world currency or player-driven markets. This means that players can only earn, spend, and trade in-game currency through predefined mechanics, such as completing quests, selling items to NPCs, or purchasing goods from in-game stores.

Unlike open economies, where players can influence market prices or trade with real-world money, closed economies are tightly controlled by developers to maintain balance and prevent inflation or exploitation. Some games with deep economic systems focus on player-driven economies, where supply and demand dictate prices, but these are different from closed economies.

Interesting. So basically any game with real money trading, whether sanctioned or not, has some sort of open economy. The question I had was to what degree. But that's a topic for another post. Moving on, where does EVE Online fit on the closed economy to open economy scale?

EVE Online is a fascinating case because it operates as a player-driven economy, meaning most goods and services are created, traded, and priced by players rather than NPCs. This makes it more of an open economy, where real-world money can influence in-game wealth.

One key aspect of EVE Online’s economy is PLEX, a premium currency that players can buy with real money and trade for ISK (the in-game currency). This creates an exchange rate between real-world money and in-game wealth, allowing players to purchase ships, equipment, and services using funds from outside the game.

Additionally, EVE Online has market hubs, such as Jita, where players engage in large-scale trading, speculation, and even market manipulation. The game’s developers monitor the economy closely, even employing professional economists to ensure balance and prevent extreme inflation.

I'm not so sure about the professional economists in EVE Online. If so, I want to attend a presentation at the next Fanfest. Now we have player-driven added to the mix. Player-driven and open economies are related concepts. So I asked Copilot to explain the difference.

A player-driven economy and an open economy are related concepts, but they focus on different aspects of in-game economic systems:

Player-Driven Economy - This refers to an economy where players dictate market prices, production, and trade. Instead of developers setting fixed item values, players create, buy, sell, and determine the worth of goods based on supply and demand. A great example is EVE Online, where nearly all economic activity is controlled by players—corporations manufacture ships, raw materials are mined and sold, and market speculation influences pricing.

Open Economy - An open economy is a system where real-world money can influence the in-game market. In games with open economies, players can purchase in-game currency with real money, trade items for real-world value, or participate in official marketplaces that allow real-world transactions (like purchasing premium currency). EVE Online qualifies as an open economy because of PLEX, which lets players trade real-world funds for in-game wealth.

A game can have a player-driven economy without being fully open. For example, Runescape has player-controlled trading, but its economy remains mostly closed because real-money transactions are restricted. Similarly, some open economies still have developer-controlled elements, such as price caps, restrictions on trading, or marketplaces only accessible through in-game mechanics.

In short, EVE Frontier's economy plans to push boundaries by embracing open-ended player agency, while EVE Online maintains a structured yet dynamic economic framework that still reflects real-world markets in a contained environment.

The meta-level differences in the economies of Online & Frontier

The differences between EVE Online & EVE Frontier led back to the picture with which I led off this post. The quote I wish to highlight is:

Blockchain integration turns a closed economy into a (proper) open economy.

Those parenthesis did a lot more work in the quote than I originally realized. EVE Online is, in many respects, an open economy. But more of a hybrid economy than the one planned for EVE Frontier. The developers and designers on the Frontier team want to make an economy that is fully decentralized, allows the creation of customizable player-created currencies, completely player regulated with open-ended integration with the real world possible.

Asking a simple question resulted in a thousand-word post. But on the subject of EVE Frontier I still need to explore a lot of concepts.

Cosmic Exploration: The Journey To Botanist And Mining Cosmic Tools

I've waited until I have my new tools for botanist and mining to write another post about Final Fantasy XIV's Cosmic Exploration feature. As always I started with those two tools because I gather a lot more than I craft. I also discovered I have a different mentality to those making guides to help players finish the tool grind as fast as possible. One might say I took a rather casual approach.

The beginning

First I want to address a complaint I heard when Cosmic Exploration was first launched. A lot of people wanted to be present every time an upgrade to the moon base happened. So far I think I managed to be present for one of the nine upgrades. Indeed, three upgrades happened while I was in Iceland attending EVE Fanfest. Would I like to have seen all the upgrades while they happened? Sure. But I'm satisfied with the option to go back and see what the moon looked like at the beginning of each phase.

The development timeline so far

Perhaps I'm just old school. Maybe playing EVE for so long warped my outlook. But Final Fantasy XIV is an online world that runs 24 hours a day, seven days a week. Sometimes a player just misses out on an event. I missed plenty of events in EVE over the years. I'm used to listening to the stories of those who can claim, "I was there."

Next, are the tools really worth the effort? I think so. The base stats on the Cosmic Hatchet and Cosmic Pickaxe are the same as those on the high quality Everseeker's Hatchet and Everseeker' Pickaxe. The difference comes with the ability to meld. The stats on the Everseeker's tools are greater (with the exeption of gathering points) than on the Cosmic tools after melding. The Cosmic tools make up for the lack of melding by granting an increased chance to trigger Collector's Intuition by 20% when gathering collectables. Oh, and grants a lunar credit bonus of 35%.

The Cosmic Pickaxe

Is the bonus worthwhile? I think so. Before patch 7.2 dropped I was still using the old Lodestar tools from Endwalker when farming for orange gathering scrips. I can't wait to see how much more effective my orange scrip farming is when using the updated tools. As for the lunar credit bonus, the bonus really came in handy when doing red alerts. When I started running out of lunar credits the bonus on the tools helped a lot even with lower levels of the tools.

Speaking of gear and melding, I wound up pentamelding my gathering gear and tools. I was using the 7.2 Mid Tier set from TeamCraft which left a lot of over-melding slots unused. When doing the gathering missions a big concern is running out of gathering points. So I wound up buying enough Gathering Grasp IX materia as I could and then filled out the rest of the slots with Gathering Guile IX materia. Not only did the extra GP help but materia is generated faster if all equipment is pentamelded.

Preparing to board a mech

Playing through the grind I grew to appreciate the Mech Ops and Red Alert content. One of those events occurs every 20 minutes and participating allowed my GP to regenerate. After the initial few days I could usually find an instance with under 25 players making winning a spot piloting a mech much more sure. I still haven't won anything but a Big Bang ticket for the roulette game but I'm still trying.

I won a cosmo suit in the roulette

The Red Alert content was really good for generating lunar credits useful for buying opportunities to pilot mechs. Also, for levelling the last level of research to upgrade to a Cosmic tool.

The research bonus really helps

Another feature I really like is the research bonus for acquiring cosmic tools. I've seen some conflicting information about the bonus, but the one I think holds is:

• 1-2 cosmic tools - 50% research bonus
• 3-4 cosmic tools - 100% research bonus
• 5+ cosmic tools - 150% research bonus

Acquiring 11 tools is quite a grind so I appreciate any bonus I can get. I'll update everyone when I finish the research on my frying pan.

Current development

Yes, I'm going to switch to crafting and save getting my fishing pole until I get the 150% research bonus. I hear the RNG is pretty bad for the fishing missions so I figure I'll wait until I can make the fishing grind as painless as possible. Besides, I'm doing the Cosmic tool grind for the benefits outside the content. I do a lot more gathering than I do fishing.

The Press Embargo For EVE Frontier's Fanfest Debut Is Over

Before attending EVE Fanfest this year I wrote about how I paid my own way to the event. Then while in Iceland I didn't participate in any of the activities arranged by CCP Games for the games journalists attending the event. Those events included exclusive interviews with development staff, a briefing on the contents of the event before Fanfest began, things like that. The press embargo for EVE Frontier content ended today

What is a press embargo? A press embargo is an agreement between a source and media outlets that restricts the publication of certain information until a specified date and time. It is commonly used in journalism and public relations to allow reporters time to prepare accurate and detailed coverage before an official announcement is made.

Press embargoes are often applied to major product launches, government policy announcements, or scientific discoveries. They help ensure that multiple media outlets release the news simultaneously, maximizing its impact. However, breaking an embargo can result in a loss of trust and restricted access to future information.

By not participating in any of the special briefings I was free to write about the Frontier content at Fanfest. Of course, I had to attend the Frontier presentations to the public themselves. The advantage was I could publish my thoughts on the game without worrying about breaking the press embargo.

I would have written more but a lot of financial news broke. First came the publication of Cloud Imperium Games' financial report for 2023. Then a few days later Pearl Abyss Iceland's 2024 financial filings became available to the public. And, of course, yesterday's Pearl Abyss earnings call for Q1 2025. By the time I finished writing about all of that my effective exclusivity window had closed.

Of course, not knowing the embargo was still in effect left me wondering where was all the coverage? I'm really interested in how the press will cover the project. I'm writing this post before the embargo ended so I don't know. But if anyone wants to know why the dearth of coverage, look to CCP's public relations making a deal with the press.

Pearl Abyss Q1 2025 Earnings Call

On Tuesday in South Korea, Pearl Abyss held its earnings call for the first quarter of 2025. The company experienced a quarter-over-quarter decrease in revenue of 20.4%, from ₩95.7 billion ($68.5 million) in Q4 2024 to ₩83.7.7 billion ($57.7 million) in the first quarter. Year-over-year the company's first quarter revenue decreased by 2%. 

For the third time out of the last four fiscal quarters Pearl Abyss ran at an operating loss. The ₩5.2 billion ($3.6 million) loss in the first quarter of the year puts the operating losses at ₩18 billion (-$12.9 million) over the last 12 months. Pearl Abyss did manage to pull off a net profit of ₩500 million ($300,000) in the first quarter.

In non-gaming revenue Pearl Abyss saw a drop of revenue from Pearl Abyss Capital of ₩4.4 billion ($3 million) due to lack of activity. The large net profit in Q4 2024 was a one-time event due to FX (foreign exchange) gains plus a revaulation of some of the company's assets. The drop in net profits in the first quarter were the numbers retreating back to the norm.

But the biggest decline in revenue was due to the ending of the Black Desert Mobile service in China. The contract with TenCent to operate Black Desert Mobile in China was supposed to run until 26 April but due to poor performance TenCent and Pearl Abyss ended service for the game on 27 January.

While the company removed platform data this quarter, the earnings call PowerPoint presentation still had revenue breakouts by region. While North American/EU (+2.2%) and Korea (+1.8%) experienced small gains, the rest of Asia region experienced a quarter-over-quarter decline of 32.8%, a drop of ₩8.9 billion ($6.9 million). Pearl Abyss no longer breaks down revenue by game franchise but one can assume most if not all the revenue decline is due to the ending of BDM service in China.

Finally on the subject of profits, the company's CFO did point towards CCP Games' development of two games, EVE Frontier and EVE Vanguard, as another reason for the quarter's operating loss.

The analysts on the call were told of various initiatives designed to increase revenue. Black Desert Console is expected to finish work on porting the game to the current generation of consoles (PS5 & XBox XIS) and release the updated game on 26 June.

For EVE, while the presentation did tout the upcoming Legion expansion, Pearl Abyss chose to make EVE Frontier a bigger focus than normal for a game from CCP. I think progress on a blockchain game is supposed to make investors forget some of the pain surrounding Crimson Desert.

According to the C-Suite members on the call, development of the long-delayed game is in the last stages of preparing to launch. These steps include final voiceover work and certification for consoles. Expect full scale marketing efforts to begin in June to include a new demo build to use at game shows.

Note: The conversion of the QoQ revenue loss in the rest of Asia has been corrected from $11.5 million to $6.9 million.

A Look At The Active ISK Delta For April 2025

On Friday CCP Games released the April Monthly Economic Report (MER) for EVE Online. As this post will look at a major influence on the New Eden money supply I want to take a quick look at the developers' main takeaways from last month's MER.

• The daily average mining value saw a slight decline of 2.5%, following higher activity levels in March.
  
• Null Sec mining activity appears to have stabilized at 56% of total mining value, potentially establishing a new baseline share—up from around 50% observed over the past few months.
• Increased player activity during Capsuleer Day contributed to a positive active ISK delta.
• The rise in Sleeper Components faucets is linked to the Capsuleer Day-themed item Sleeper Protocol Subverter.
• A notable spike in ISK velocity was observed, primarily driven by transactions related to skill training items.
• The Mineral Price Index (MPI) has decreased by 6.9% since March.
• Module prices dropped by 1.6%, while ship prices declined by 2.7% compared to March.
• A new ore type, Tyranite, has been introduced and is now included in mining reports.

The Capsuleer Day events saw a peak daily average concurrent users hit over 24,000 in the middle of April according to Jester's ACU graph. As noted, the event affected the month's Active ISK Delta.

The Active ISK Delta is the net effect on the money supply of players leaving and returning to the game, including all GM actions. In April, the Active ISK Delta went from the 2nd biggest ISK sink in March to the game's third largest ISK faucet in April. For the second time over the last 7 years the economy recorded a positive Active ISK Delta, this year at 1.4% of the month's starting money supply.

I didn't have data for April 2018 so the historical average Active ISK Delta in the chart above only covers the years 2019-2024. For the second month in a row, the Active ISK Delta percentage of the money supply was greater than the historical average. Last month's 1.4% increase to the money supply due to player movement is greater than the average decrease of 1.3%.

I'm sure CCP would like to also credit changes to the code that manages site distributions and respawning. The most visible effects of the changes were that Rogue Drone combat anomalies spawned randomly in highsec and Mercoxit mining sites spawned from sovereignty prospecting upgrades will both cluster in unvisited systems less often than before. But the changes occurred on 9 April and the Capsuleer Day spike occurred on 15 April.

Looking ahead, will May finally be the month when the recorded Active ISK Delta is positive for two months in a row? Not only did the finale of the Capsuleer Day event launch on 6 May but the Legion expansion launches on 27 May. If EVE is going to experience a longer than usual return of players who have "won" EVE, now is as good a time as any.

The Board Of Directors' View Of Pearl Abyss Iceland's 2024 Consolidated Financial Reports

On 7 May the financial accounts for all the companies making up CCP Games made their appearance on the website of Iceland's taxing authority. The company under which all others fall is Pearl Abyss Iceland ehf. Since Croda has already done a two-part analysis of the numbers I thought I'd look at the text of the endorsement of the board of directors for Pearl Abyss Iceland. Since the board is headed by a Pearl Abyss employee I thought I would use the endorsement section of the 2024 Consolidated Financial Reports to provide a 30,000 foot view of the numbers inside the document.

First off, what is Pearl Abyss Iceland ehf. In their own words:

Pearl Abyss Iceland ehf. is a holding company established in 2018. In October 2018 the Company bought all issued and  outstanding shares in CCP ehf. CCP ehf. designs, develops, markets and operates immersive virtual worlds and games  accessed over the internet. The Company is headquartered in Iceland and owns and operates subsidiaries in the United  Kingdom, China, and the United States.

I'll add in CCP Games description of itself from the CCP ehf 2024 financial statements.

CCP ehf. designs, develops, markets, and operates immersive virtual worlds and games accessible over the internet. Our mission is to create virtual worlds more meaningful than real life. Headquartered in Iceland, the Company operates subsidiaries in the United Kingdom, China, and the United States.

Yes, creating virtual worlds more meaningful than real life isn't just a slogan pulled out for press interviews and Fanfest.

The next paragraph covered the totals that get the most coverage in the press: revenue, profits/loss, and employee headcount.

In 2024, The Group generated revenues of USD 60.2 million, compared to USD 56.0 million in the previous year. Notably, game revenue increased by USD 4.5 million (8%) year-on-year, reflecting strong ongoing engagement across EVE Online and the launch of new titles including EVE Galaxy Conquest. However, the Company reports a net loss of USD 19.5 million, compared to a USD 18.8 million net loss in 2023. This result is primarily due to deliberate and increased investment in multiple active development projects — including EVE Frontier, EVE Vanguard, and the Carbon open-source platform — which are scheduled to enter key release phases from mid-2025 onwards. These investments, while impacting short-term profitability, are central to the Group’s strategy and position the Group for strategic and sustainable growth in the years ahead. As of year-end, shareholders’ equity stood at USD 89.2 million, with an equity ratio of 40.2%, and total assets of USD 221.6 million. The Group employed 412 people at year-end, compared to 381 at the beginning of the year.

The headline numbers are:

• Revenue up 8% ($4.5 million)
• Losses increased to $19.5 million from 2023's $18.8 million
• Headcount increased 8.1% (to 412)

The losses are racking up while CCP works to develop two major on-line games one of which is a first-person shooter while developing Carbon. Sounds a lot like 2011 except CCP has a larger financial cushion as Pearl Abyss provided PAI a $50 million loan in 2023. So, no danger of the company collapsing in 2025.

I won't follow the document in order. Instead, what was said about the two EVE Online expansions, Equinox and Revenant? First, the summer expansion.

The year saw a major expansion in the Group’s portfolio and platform capabilities. In June, Equinox launched for EVE Online, introducing expansive changes to nullsec sovereignty warfare. It added new Upwell structures, enabling capsuleers to efficiently harvest planetary resources and customize territories. New industrial hulls and enhanced defensive capabilities arrived alongside the SKINR personalization tool, empowering capsuleers to express themselves through ship design. These innovations sparked renewed engagement across the landscape of New Eden.

A little later on the winter expansion received a summary.

Meanwhile, Revenant, the second major EVE Online expansion of the year, launched in November. It introduced new SKINR upgrades, Corporation Projects enhancements, and powerful ships themed around the enigmatic Deathless — a faction that now plays a pivotal narrative role across CCP titles. In early 2025, Revenant received a significant post-launch content update, deepening both narrative and gameplay layers.

Notice the first item listed for the winter expansion was the new SKINNR upgrades? I had some thoughts about CCP introducing a feature that would increase demand for PLEX at a time with low supplies of the currency. The prominence of place in the report leads me to believe the SKINNR system is a top priority for the company.

After EVE Online came news of EVE Vanguard.

EVE Vanguard, the Group’s sandbox FPS module set within the EVE Universe, advanced rapidly throughout 2024. Player feedback during the limited-time Solstice event and public playtests helped shape the game’s direction, culminating in a detailed roadmap for the Solstice Era. The team emphasized direct collaboration with our Founders Access community as we build toward launching into Steam Early Access.

As we found out at Fanfest, Vanguard will reach Steam Early Access in July 2026. Expect more development work throughout 2025.

Next came a description of the latest game launched by CCP Games, EVE Galaxy Conquest.

In October, EVE Galaxy Conquest launched worldwide on iOS and Android. This mobile-first 4X strategy title, developed by the Group’s Shanghai studio, blends diplomacy, territory control, and epic-scale fleet battles to deliver the power and politics of New Eden to handheld devices. The game continues to evolve with post-launch content and live operations.

Speaking of mobile games, EVE Echoes is not mentioned in the board of directors summary. Perhaps the fact that NetEase only licenses the intellectual property from CCP doesn't make the game worth noting.

Then we get to EVE Frontier.

September saw the official reveal of EVE Frontier, the Group’s ambitious new hardcore survival MMO. With Founder Access underway and Early Access planned for June 2025, Frontier challenges players to survive and thrive in a fractured cosmos overrun by rogue AI. Featuring a single-shard server architecture, emergent construction via Smart Assemblies, and deep player-driven economy systems, EVE Frontier extends the spirit of EVE into a fresh new genre space.

While not showing up in the PAI financial reports, we have a pretty good idea of spending on Frontier's development by looking at CCP ehf's financial statements. Since 2022 Angelice Prime Foundation has paid CCP ehf a total of $39,980,542, including $10,187,021 in 2024, for "supply of services". 

This money does not show up on PAI's statement as Angelice Prime Foundation is listed as a related party. From one of the footnotes:

Because the Group has power to direct the relevant activities of Angelice Prime Foundation through contractual arrangements, the Group has control over Angelice Prime Foundation and its subsidiaries even though the Group doesn't have any ownership interest and voting rights in Angelice Prime Foundation.

Is this what is known as a creative accounting practice designed to lower tax liability or perhaps gain a tax credit? Because when taking the payments from Angelice Prime Foundation to CCP into account, PAI's loss drops from $19.5 million down to $9.3 million. And 2023's $18.8 million loss is reduced to $1.6 million. I am not an accountant so I'm not sure if I read everything correctly. Just one of the reasons I'm trying to stick to the text of the board of directors' statement.

Finally we get down to a specific technical project.

In March 2024, the Group announced its intention to open-source the Carbon Development Platform. This initiative provides developers with access to the Group’s proprietary game engine and tools, supporting a more open and collaborative ecosystem for game creation and experimentation.

Last but not least, we get down to dividend payments.

The Board of Directors does not propose dividend payments to shareholders in 2025. With regard to the allocation of loss and changes in the equity of the Group, the Board refers to the Notes attached to the Consolidated Financial Statements.

At the beginning of the year-end and at year end 2024 Pearl Abyss Corp. is the sole shareholder in the Company.

Not surprising that Pearl Abyss does not want to pay itself a dividend.

Q4 2024 and 2024 Full Year Revenue For The EVE And Black Desert IP

In a surprising move Pearl Abyss changed the way revenue was reported in the earnings call covering the fourth quarter of 2024. Instead of reporting the revenue for the Black Desert and EVE intellectual properties, the breakout instead was by game revenue and other revenue like from Black Desert's investment company. But with the release of Pearl Abyss Iceland's 2024 annual accounts on the Icelandic taxing authority's website yesterday we can now piece together the information traditionally covered by the last Pearl Abyss earnings call of the year.

Before continuing I should add that Croda has already published his analysis of PAI's 2024 financial information. If you would like his take on how PAI managed to lose $19.4 million I urge you to go over and read his post.

First, let's look at the revenue for the EVE IP. The EVE IP is made up of EVE Online, EVE Echoes, and EVE Galaxy Conquest amongst live games. For the year 2024 Pearl Abyss Iceland reported revenue of $60.2 million. Since we have revenue information for the first nine months of the year, that means revenue for Q4 2024 was ₩22.1 billion ($15.8 million), a 11.1% increase from the fourth quarter of 2023. For the entire year, the EVE IP recorded ₩82.1 billion ($60.2 million) for an increase of 12.6%.

Now comes the fun part. How much did Black Desert bring in for Pearl Abyss? Since we know the South Korean video game maker brought in ₩91.1 billion ($65.2 million), then the Black Desert portion of the revenue comes out to ₩69 billion ($49.4 million), a year-over-year increase of 14.8% compared to the third quarter of 2023. The extremely strong quarter meant revenue for the year was only down 1.1% to ₩2.7 billion for the year.

I remember at the time some EVE financial talking heads estimating that based on the Revenant expansion that the EVE IP brought in $18 million for the year. Instead, revenue fell in line with the second quarter of 2024 ($15.7 million) which saw the launch of the Equinox expansion. Given the launch of Galaxy Conquest at the end of October I believe I can speculate that revenue from EVE Online in Q4 was lower than that in Q2.

I will examine the latest financial accounts from Pearl Abyss Iceland in future posts but I believed in taking the opportunity in finishing up old business before moving onto the juicy new news.

Thoughts On EVE Frontier After EVE Fanfest

At EVE Fanfest I attended all of the presentations about one of CCP Games' projects currently under development, EVE Frontier. I have the feeling the videos of the sessions will have a low priority to be posted to YouTube, so I'll just give an overview of my thoughts while the sessions are still relatively fresh in my mind.

First, I think if Frontier is actually EVE 2.0, the project is looking towards addressing some of the perceived weaknesses of the original. For example, when EVE Online launched back in 2003 the omnipotent police force CONCORD wasn't so omnipotent. When powerful outlaw groups disrupted high sec routes, other players were unable to handle the situation themselves. Instead of letting these groups cripple trade the developers made the choice of turning CONCORD into the invincible force we know today. Using the example of Provibloc, the Frontier team spelled out a way CVA and allied groups could have set up their own standings system. The same could have helped back in the early days of EVE Online.

But I'm thinking of other nagging issues as well. Remember how many suggestions to solve the AFK cloaky camping issue by instituting the use of fuel? Or how local chat shouldn't serve as an intelligence tool? Or even that asteroids should serve to block incoming fire? All of these ideas are making their way to Frontier.

As I listened to the presentations I couldn't help but think of Cloud Imperium Games. A few years back they increased the development staff of Squadron 42 while players were demanding faster progress on Star Citizen. Chris Roberts told the players that advances in technology for Squadron 42 would be ported into Star Citizen. After all, the two games used the same engine so doing so made sense, right?

CCP Games is doing the same with EVE Frontier. The game under development will serve as a test bed for EVE Online. The obvious example is the Carbon engine. Frontier uses the newer version utilizing Python 3.12 while EVE Online's version of the engine still uses Stackless Python 2.7. But will the new map improvements coming to the EVE Online map do so from Frontier? While the two games are significantly different, some shared features may show up in Frontier first.

If Frontier were just about CCP making an EVE 2.0 the effort wouldn't raise eyebrows outside the EVE player base. But the development team is also creating a game utilizing blockchain technology. After listening to CCP Coin's presentation on Frontier's economic principles, I realized I needed to add a new condition to evaluating Web3 games: trust.

Players need to trust the games they play. EVE Online had its big scandal involving trust almost two decades ago. The T20 scandal in 2007 involved a CCP Games developer known as CCP T20. He was discovered to have used his developer privileges to unfairly benefit the Band of Brothers (BoB) alliance by manipulating the lottery system for Tech 2 Blueprint Originals (T2 BPOs). This gave BoB a significant advantage in the game’s economy and warfare.

When the scandal was exposed, CCP initially attempted to suppress discussions about it but later admitted to the wrongdoing after mounting pressure. Instead of firing CCP T20, the company had him publicly apologize and introduced new internal policies to prevent similar incidents in the future. This led to the creation of CCP’s Internal Affairs department and the Council of Stellar Management (CSM), which serves as a player-elected watchdog group.

Players also need to trust transactions in games. A famous example from EVE Online was the warp-to-zero bookmark scam. The Warp to Zero bookmark scam in Online was a deceptive trick that exploited the game's old mechanics before warp-to-zero was a built-in feature.

How It Worked:

• Selling Fake Bookmarks – Before warp-to-zero was officially implemented, players had to create bookmarks near gates to warp directly to them instead of landing 10-15km away.
• Scammers Sold "Warp to Zero" Bookmarks – Some players advertised bookmarks that supposedly allowed instant warping to gates, stations, or safe spots.
• The Catch – Many of these bookmarks were misplaced or completely useless, leading buyers to land far from their intended destination—sometimes in dangerous territory.

Why It Was Effective:

• Players were desperate for faster travel and often trusted sellers without verifying the bookmarks.
• Once the transaction was completed, there was no way to reverse it—the buyer was stuck with useless bookmarks.

CCP Coin's presentation flipped the matter of trust on its head. Instead of the blockchain creating player mistrust, the Web3 tech would increase trust in player-to-player transactions and lead to the creation of a stable player-run financial system. Such a financial system, one of CCP's desired goals in Online, didn't quite reach the level of adoption hoped for due to trust issues. The former Icelandic central banker used the EBank bank collapse in 2009 as an example.

The EBank scandal in EVE Online was one of the most infamous financial scams in the game's history. EBank was a player-run financial institution that operated similarly to a real-world bank, allowing players to deposit ISK (the in-game currency) and take out loans. However, in 2009, the bank collapsed after its CEO, Ricdic, embezzled 200 billion ISK and exchanged it for real-world money—approximately $6,100 AUD.

What Happened?

• Ricdic stole 200 billion ISK from EBank’s holdings.
• He converted the stolen ISK into real money through third-party sites, violating EVE Online’s End User License Agreement (EULA).
• CCP banned Ricdic, but the damage was already done—EBank suffered a massive run on withdrawals, leading to its downfall.

Why It Was Significant:

• It demonstrated how EVE Online’s player-driven economy could mirror real-world financial systems, including bank runs and fraud.
• It reinforced CCP’s strict stance against real-money trading (RMT).
• The scandal led to widespread distrust of player-run banks, making similar ventures rare in later years.

Honestly I'm not sure the use of a blockchain will accomplish what the Frontier team is hoping for. While the hiring of Stefán "CCP Kalirha" Þórarinsson was only announced two months ago, he has a much more impressive resume than I do where economics is involved than I do. Thus, I will, as the Russians say, доверяй, но проверяй (trust, but verify).

Finally, I do have some major concerns involving enforcement of the game's terms of service and compliance with government laws and regulations. Honestly even after attending the presentation I'm not sure what EVE Net actually is. I'm pretty sure acting as an interface between the game world and real world is part of the definition. But is EVE Net an actual platform? I'll need to research the matter further.

Edit: 8 May 2025 - I listed the wrong blockchain. It should be Redstone, not Polygon.

I do know the Frontier team is using the Polygon blockchain Redstone blockchain which is designed to work with Ethereum. Ethereum is a decentralized blockchain platform that enables smart contracts and decentralized applications (dApps). Here’s a summarized description.

1. Blockchain Structure - Ethereum operates on a distributed ledger, meaning transactions are recorded across multiple nodes globally. This ensures transparency and security.
2. Smart Contracts - Unlike Bitcoin, which primarily handles transactions, Ethereum allows developers to create smart contracts—self-executing agreements with predefined rules. These contracts run on the Ethereum Virtual Machine (EVM).
3. Consensus Mechanism - Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS), making it more energy-efficient. Validators stake ETH to secure the network and validate transactions.
4. Ether (ETH) - ETH is Ethereum’s native cryptocurrency, used for transaction fees, staking, and interacting with dApps.
5. Decentralized Applications (dApps) - Ethereum hosts thousands of dApps, including DeFi platforms, NFT marketplaces, and decentralized exchanges.

An important question is whether Frontier will need to run on a more centralized blockchain to meet governmental regulations? In the EVE Net session the subject of laws was broached by a question about casinos, which can violate national gambling laws. A prime example that came to mind is complying with the European Union's "right to erasure" embedded in the General Data Protection Regulation. If the blockchain is forever but the EU thinks differently, how does CCP resolve the conflict? From the session I learned those issues are still under discussion.

When the videos of the Fanfest presentations hit YouTube I hope to do a more detailed breakdown. But for now I wanted to get some thoughts up in a post before news of Fanfest reaches its expiration date.

Cloud Imperium Games Lost $20.2 Million In 2023

On Friday Cloud Imperium Games released its simplified annual financial report for the 2023 fiscal year on its corporate website. Depending on how one views the data, CIG had either its worst financial year since 2017 or its worst year ever. The company reported total revenue of $142.9 million and total outlays of $163.1 million for a total loss of $20.2 million. The single year loss in 2023 was the largest in company history, outpacing 2019's loss of $9.7 million.

Before continuing the timing of the release of the report needs to be addressed. According to the report:

The basis of this analysis remains the management accounts numbers that underpin the financial statements we provide to our auditors, upon which they perform their work for the annual audit.

As we know from the earlier release of the 2023 accounts for Cloud Imperium UK Ltd the auditor only signed off on their report on 27 March 2025. Even then the auditor only gave a qualified opinion of those reports, but that was based on the put options available to some of the minority shareholders. I did not see anywhere in Friday's report covering the entire company where the dispute would impact the numbers presented, so the put option issue can be placed to the side for this post.

Income

CIG reported revenue of $142.9 million, a record amount for the company and a 9.3% year-over-year (YoY) increase over 2022's total of $130.7 million. CIG gave a brief overview at the beginning of the report.

Income grew again, up 9% to $143M, with regular sales up 5%, subscriptions up 23%, and other income up 50%, the latter owing both to the acquisition of Turbulent and a change in our operations as we intensified development in the UK.

For those wondering about the effects of inflation, in constant 2023 US dollars, overall income only increased by 5%.

An interesting fact is that the Pledge Counter doesn't actually track all revenue from the Pledge store.

Pledges / Sales (from Counter) This line is taken directly from our daily published Funding Stats Counter, showing the net receipts from our backers and customers. The vast majority of sales are of starter pack sales granting access to the Star Citizen alpha game, as well as spaceships and digital items immediately delivered and playable in the game. A smaller fraction of sales came from pledges for concept ships, which all come with an included “loaner” ship for immediate use and playability within Star Citizen alpha. Due to exchange differences and small items that are not included in the counter, such as shipping costs charged on physical goods, the counter does not completely represent all revenue received. Other than subscriptions (referred below), these differences are included in the final income line to give an accurate representation of total sales received.

Except, beginning in the 2022 financial year report, the number is not taken directly from the Funding Stats Counter. For 2023, the counter showed $117.6 million in sales while the graph above shows $119.3 million. Sure, the difference is small (1.4%) but after some time the difference will become noticeable. Including 2022 the difference is now $2.3 million.

By the way, for those who think CIG is artificially inflating their sales numbers, the issue described is actually lowering the visible sales numbers.

In 2023 subscription revenue increased by 23.1%. The report glossed over the increase, but the $20 Imperator-level subscription did receive several upgrades during the year making the package more attractive.

The other income category increased by 50.1% in 2023. The report gave the following explanation.

The other income line represents partnership income with various hardware and software vendors, sponsorship income, and various local incentives based upon the nature and location of our development and production activities. It also includes any exchange differences as referred to above.

Following the acquisition of Turbulent in 2023, it also includes their local incentives and their third-party web service business, where this was maintained following the acquisition.

But make no mistake, the large increase is due to making Manchester a main development hub to take advantage of the UK Video Game Tax Relief provision in the law. The amount of money CIG received increased from $8.5 million (£6.9 million) in 2022 to $13.6 million (£10.8 million) in 2023. The increase in money from the tax provision accounted for 89.5% of the increase in the other revenue category.

Outgoes

What made 2023 such a bad financial year for Cloud Imperium wasn't the revenue but the spending. Back in February 2023 I estimated that CIG's spending would rise 15%-20%, putting spending in the $143.4 million to $149.6 million range. Since the actual amount of revenue for 2023 was $142.9 million, if spending actually had only increased 15%-20% I could not credibly call 2023 the worst financial year in CIG's history. Instead, spending increased by 26%, up to $163.1 million.

The report gave its own explanation for the increase in costs experienced by Cloud Imperium in 2023. The explanation is rather lengthy. If CIG's reasoning is faulty or sounds fishy, please leave a comment at the end of the post.

At the beginning of the year, we made the decision to move Star Citizen onto our StarEngine so we could take it to the next stage in its development and add and improve more features and content that we knew our community and customers were and are keen to see realized. Internally we marked this as the end of the long prototyping phase we had been going through and, whilst not changing our open development philosophy, we recognized this change in our development focus as a further step on the roadmap to commercial release.

As set out in my last report, we also made the decision at the start of 2023 that we needed to dedicate and ringfence more resources for our Squadron 42 game in order to get that game to feature complete by the end of the year – again a significant step on its roadmap to full commercial release. Hitherto it was all too easy to divert resources earmarked for Squadron onto Star Citizen to tackle live issues raised by our customers and community stemming from our latest releases, but this was at the expense of the Squadron development plan. So, although an expensive commitment, the decision was taken to devote these planned and required resources to Squadron 42 in the interests of making solid progress towards our ultimate goals.

Additionally, as also referenced in my last report, we completed in July 2023 the acquisition of Turbulent, whom we have worked with for over a decade, to provide not just the online customer and platform focused web services technology and support that we had initially engaged them for back in 2012, but to also tap into their game development talent that we had more recently grown with them and now brought in-house through this transaction.

As if that was not enough, towards the end of the year we held the biggest live CitizenCon event in our history to 3,000+ people in Los Angeles, where we were able to showcase the new elements we could now bring to the game with our StarEngine and demonstrated what those features might look like, many of which had been developed ‘behind closed doors’ as part of our Squadron 42 work.

This goes to explain the 26% increase in our expenditure, including capex, over 2022 with all cost categories up on 2022 except for capex, which was lower as 2022 included the bulk of the investment in the Rest of World Offices and facilities as outlined in the last report.

Since understanding the expenses is so important here is a brief breakdown of each expense category, including Cloud Imperium's explanation. I made additional bar charts as the one included in the report is rather messy.

Salaries

Salaries and related on-costs represent the total employee cost within the Group, excluding service-oriented publishing, community, and marketing personnel – whose salaries and related costs are included within that cost line.

This shows that salary costs increased markedly outside of the USA (+44%), representing both a growth in UK development and, through the second half of the year, all development and related costs incurred in Montreal, Canada following the Turbulent transaction. Including Turbulent, the Rest of World non-publishing and marketing headcount increased by 153 people (27%).

In contrast, US salary costs decreased by 20% following a 30% reduction in US development headcount during the year.

Salary costs don't equate with spending per employee. When looking at the spending for this category of employee one should note the effect of inflation. In constant 2023 dollars, spending per employee actually decreased 11.2% from 2021 to 2023. The acquisition of Turbulent doesn't account for the decline as 86.2% of the drop occurred from 2021 to 2022.

Other Group Costs (Overheads)

Other group costs include expenses for studio operations such as office rental, maintenance, travel, accommodation, IT, and other costs not included in the other cost categories. In 2023, these costs rose by 80% to $33.1M.

US offices and overheads grew by less than 5% as the group's US presence remained stable in 2023. The composition of the US operations changed somewhat with a reduction in development (as noted above) and only a small increase in publishing and marketing headcount. Consequently, the US offices were not expanded, and we would have reduced our overheads in the US were it not for our continued investment into our IT infrastructure, hardware, and software.

In contrast, the Rest of World overhead costs more than doubled, which was largely driven by three main factors:

• The Turbulent transaction during the year, which added almost 200 people to our group and over 13,000 sq ft of office space in Montreal, Canada.
• The improved office facilities of over 30,000 sq ft in Frankfurt, referred to in my previous report, which came fully on-line during 2023.
• And the same only more so with respect to Manchester, to which we added an additional 35,000 sq ft floor during 2023 to accommodate the planned growth expected there, for what is now by far the largest office in the group and the hub of our development operations.

One of the biggest questions was whether the new office space in Manchester and Frankfurt would in the long run save the company money. The answer is no. From 2021 to 2023 the overhead costs, mainly driven by office space, increased by 183.8%. Even taking account the effects of inflation by using constant 2023 dollars, overhead costs increased by 151.5% over those two years. In the 2025 report CIG will be able to drop the costs of running the Los Angeles facility, but as the graph shows the reduced costs will just mitigate the costs of CIG's new European homes.

Publishing Operations, Community, Events, and Marketing

These costs are associated with running the game, deploying online services, and providing customer support. It also includes the costs of running our platform, publishing, data hosting, and server costs. It includes sales collection, customer liaison costs, and the costs of our marketing and community events. Many elements of this cost line correlate closely with income and user engagement but in 2023 we also had two additional factors driving the 33% growth in this cost category to $39.7M.

• From July, the acquisition of Turbulent added 98 people in this area of the business (although this includes web services for third parties – generating incremental sales as noted earlier) now employed but supplying those services that were hitherto invoiced to the US.
• The CitizenCon event in Los Angeles, which attracted over 3,000 people to witness the unveiling of StarEngine and showcased what was therefore coming shortly to the Star Citizen game as a consequence of this technological advancement.

Despite internalizing our Turbulent Publishing services through the ROW from July, the bulk of our publishing and marketing operations continue to be run through the US, which accounted for 65% of spend in this cost category.

It should not be surprising that this spend category is increasing as our game reaches a wider audience, despite, from our perspective, it only just getting out of the prototyping phase. It is essential for us to support our expanding community and customer base while ensuring player engagement in the rich environment we are developing. Therefore, we continue to prioritize investment in our servers, platform, and community tools to enhance the Star Citizen experience, making it comprehensive, secure, and enjoyable.

As much as many Star Citizen players tend to believe CIG has no financial limits, the company's resources resemble a pie. Yes, the pie is growing, but the more players come to play Star Citizen, the more resources publishing requires. Which, of course, takes away, or at least severely limits the growth, of the resources devoted to developing the game.

The report also foreshadows the closing of the Los Angeles office, or would have if the report weren't released 5 months late. Not only was the company realigning itself to move software development out of the United States but its publishing operations were beginning to become more expensive as well. And with 20/20 hindsight, too expensive.

General and Administration

These costs represent insurance, accountancy, and other professional and legal fees not apportioned directly into the cost areas identified previously. An increase in our cyber security insurance cover and operations generally worldwide, adding fees associated with the Merger and Acquisition activities undertaken in 2023, meant these costs increased by £1.2M to $2.6M in 2023.

Not a lot to say about the category except that acquiring a company and getting anti-hacking insurance costs money.

CAPEX and Investments

This includes capital expenditure on hardware, software, fixtures, fittings, and offices. It varies with staff numbers and includes expenses for hardware renewals, server upgrades, and other security and infrastructure purchases.

It is included in this accounting as it represents an outlay for the materials required to develop and publish the games. Since the total capital expenditure amount is included here, we do not list the depreciation portion of such expenditure subsequently in the cost analysis.

Capex spending in 2023 was $7M, representing the tail end of the fit-out phases in the Rest of World locations that peaked in 2022 and was highlighted in the 2022 report. Also, more computers and furniture were needed for our increasing staff.

Capital expenditures, or Capex, is an important enough topic to expand upon further. The below list are some examples for a video game studio like Cloud Imperium.

• Technology & Infrastructure – Purchasing high-end servers, workstations, and networking equipment to support game development and live operations.
• Software Licenses & Development Tools – Investing in game engines, animation software, and development tools that facilitate asset creation.
• Office Space & Facilities – Buying or leasing studio buildings, office furniture, and equipment needed to house developers.
• Motion Capture & Production Equipment – Acquiring motion capture rigs, soundproof recording studios, and high-fidelity scanning tools for character and animation development.
• Research & Development Costs – Developing new technology such as procedural generation systems and advanced rendering techniques.
• Data Centers & Cloud Services – Expanding data hosting infrastructure to support the online aspects of the game, such as persistent universe storage and multiplayer functionality.

Unlike Operating Expenses (OpEx), which cover day-to-day costs like salaries and subscriptions, CapEx is focused on acquiring and upgrading long-term assets that sustain game development and live operations.

As for what we see from Cloud Imperium in post-2023 reports, I expect the numbers to remain low until the company balances its current revenue and spending. Perhaps CIG will reach balance in 2025 or 2026.

Headcount

The headcount analysis represents the people working at the end of the year under the broad disciplines identified. (Note: It is not average people numbers for the year).

Employee numbers increased by 225 (25%) to 1,085 worldwide by the end of 2023. As identified in much of the commentary above, a large proportion of this increase has arisen from the acquisition of Turbulent in July 2023, which added 198 people to our end-of-year headcount. These are separately identified above in the various disciplines.

US headcount decreased by 25 people (10%) as development reduced, being taken up elsewhere in the group, and publishing and marketing operations only marginally increased. Excluding the Turbulent headcount added in Canada, the Rest of the World headcount grew by 52 (8%) mainly in development, including some relocation from within the group. By the end of the year, the Rest of the World represented 80% of Global headcount (up from 73% last year) although this includes our studio in Montreal which is 18% of our global workforce.

Overall

The numbers in the cumulative net position are bad. How bad? The $20.2 million loss in 2023 wiped out any cumulative gains for Cloud Imperium on the project and put the total revenue for the project $13.9 million in the hole. The only reason CIG could have the limited layoffs they conducted last year and not have sweeping changes is due to the $63.25 million of outside investment made by the Calders in 2018 and 2020. Even then one or more of the minority investors were paid $1.9 million in 2023, reducing CIG's cash on hand at the end of 2023 to $42.6 million, a 34.1% reduction of the company's cash reserve. At Cloud Imperium's burn rate through 2023 the company had enough cash on hand to run for three months at the end of the year. Not exactly a good position but not really life threatening to the company either.

Then came the rationalization for 2023 and a scary preview for 2024.

In 2023, the Group made substantial investments in strategic and tactical areas to progress towards its mid- and long-term objectives. The acquisition of Turbulent brought approximately 200 people into the group, along with the associated overhead and related costs, while securing essential skills in key areas. Gearing up and dedicating development resources, particularly in the UK, advanced us to our release objectives, with the greater effectiveness that stemmed from this change in our development operations, but it did add to our costs. Thus, 2023 was a year where we expended some of our accumulated reserves to accelerate and further our business.

This investment bore fruit in the latter part of 2024 when we released Star Citizen 4.0, which included the initial phase of the Server Meshing technology we demonstrated at the 2023 Los Angeles CitizenCon event. But, this was at the expense of regular releases throughout the year and, whilst it allowed us to end the year well, sales were only comparable with the prior year.

At the 2024 CitizenCon in Manchester, we were also able to demonstrate the roadmap and plan for what we believe will be the 1.0 version of Star Citizen. We also showed the progress made on Squadron 42 by playing through live a chapter in the game and announcing a 2026 release date. Yet all these factors require investment at a time when the macroeconomic environment is unfavorable and the games industry is demonstrating it is not immune to these economic headwinds. Thus 2024’s results, when released, whilst showing some cost rationalization as we bed in the changes made in 2023, will follow a similar pattern. [emphasis mine]

Because the financial report was issued so late the report's author knows what 2024's financial numbers will show and is setting expectations now. Those expectations are the numbers will show another yearly loss of at least $10 million and likely between $15 million to $20 million. How do I know? The next paragraph provided a hint.

However, we firmly believe and are demonstrating that the investments we are making are worthwhile and our investor shareholders share our beliefs evidenced by their recent equity investments and financing – as referenced in our 2023 UK filings. This funding supports the business and replenishes our reserves ready for this next exciting phase in our life cycle. [emphasis mine]

That financial support took the form of purchasing $5 million in Cloud Imperium shares and providing a loan of £10 million, or $12.6 million. The $17.6 million provided, most likely by Keith Calder but not yet confirmed, falls within the $15 million to $20 million loss range. The comment about "replenishes our reserves" indicates the cash on hand was reaching uncomfortable levels for the accountants, if not CIG's auditor.

The conclusion of the report also supports the thesis of Cloud Imperium running low on cash.

So, 2023 involved significant expenses and similar costs are anticipated for 2024. However, progress is being made towards our goals, with a focus on achieving our key objectives. We are working towards delivering a high-quality gaming experience and universe of substantial scale and fidelity, which is made possible through the support of our current and future players and community.

The report indicated earlier that revenue, at least from the pledge store, was flat in 2024. If expenses were also similar in 2024 to 2023's then the loss should also be similar as well. Fans of Star Citizen need to hope revenue for 2025 increases greatly in order for the company to survive long enough to begin selling copies of Squadron 42.