Cloud Imperium Games Purchases Turbulent

On Thursday Cloud Imperium Games completed its acquisition of Montreal-based Turbulent. The companies issues a joint press release.

LOS ANGELES and MONTREAL – July 13, 2023 – Cloud Imperium Group (CIG) today announced that it has fully acquired Turbulent, a leading Montreal-based studio, after successfully working together for nearly 11 years. The two companies have collaborated since 2012 on the ongoing evolution of Star Citizen, the iconic massively multiplayer AAA video game currently in development, with the world-record in crowdfunding, with more than $580 million raised since October 2012.

Today’s announcement completes a long-term and fruitful joining of the companies, with CIG announcing in 2020 that it had acquired a 25% shareholder stake in Turbulent. The addition of the studio reflects CIG’s strong presence in the bustling games community in Canada, with offices in Montreal and Toronto. CIG also has global studios in Los Angeles, Austin, Frankfurt, and Manchester, and now has over 1,100 employees around the world working on its ambitious projects.

“We enthusiastically welcome Turbulent to our family of studios, as an integral part of our Star Citizen development,” said CEO and founder of CIG, Chris Roberts. “Fundamentally, we recognize the shared cultural values and passions between our two companies, which have helped create a natural synergy and development pipeline for our joint projects over the past decade.”

Turbulent’s existing projects will continue as planned and its team of 189 employees will remain in place. The studio’s management team of Benoit Beauséjour (CTO), Marc Beaudet (CEO), Claire Buffet (VP Strategy & Creation), and Guillaume Voghel (Development Director) in Montreal will continue to run the studio. In addition, Beausejour and Beaudet will become CIG shareholders and join the CIG executive group as Chief Technology Officer and Senior Vice President, Studios Operations, respectively.

“After more than a decade of shared success, it was only natural that the next step be to join forces,” said Benoit Beauséjour, co-founder of Turbulent. “The Montreal and Quebec gaming and tech industry benefit from this transaction, which serves to reaffirm the depth of talent to be found here. And we will benefit from the expertise of a huge global network of CIG talent while our studio team will now be able to work on projects that are international in scope.”

“Benoit and Marc have been great partners since the very first days of our crowdfunding campaign and have been an integral part of all our successes these past 12 years, from supporting our crowdfunding campaign, to developing our e-commerce platform, to building our marketing and platform infrastructure, and now to actively contributing to the development of our games,” further said Roberts of CIG. “As we approach some of our biggest milestones to date, we’ve never felt better equipped to realize the unprecedented ambition of Star Citizen and Squadron 42. We are on a unique journey and the Turbulent team have been with us every step of the way, sharing our relentless passion for making the best game universe ever. We could not be happier to welcome them to our CIG family of studios!“

Back in November I noted that Cloud Imperium Games had conducted a 10:1 stock split in October 2022. I speculated the split could mean a wide range of options, from preparing for additional outside investment into CIG to giving out shares to employees as additional compensation. With Turbulent co-founders Marc Beaudet and Benoit Beauséjour becoming shareholders in CIG as part of the deal, the stock split now looks like an effort to also expand the amount of shares available to give Beaudet & Beauséjour as part of the deal.

From CIG's 2021 Group of Company Accounts,
(Turbulent was the only associate company)

We don't know the details of the sale, but we have a very rough idea of the value. Back in December 2019 CIG engaged in a stock swap with Turbulent, acquiring 25% ownership of Turbulent. As of December 2021, CIG carried the value of its holdings in Turbulent as £826,657. We can then speculate that the value of acquiring the remaining 75% was approximately £2.5 million, or $US 3.3 million at yesterday's conversion rate. Given the prices of transactions involving video game studios, the value seems rather small. Undervaluing assets might serve as a tax avoidance technique.

We won't know how much of the transaction occurred via trading shares in CIG and how much in a cash exchange. But the amount of shares that Beaudet & Beauséjour receive should become public knowledge in the next 6 to 12 months. 

CIG Shareholders as of September 2020

One of the more amusing parts of the press release was the statement that Beaudet & Beauséjour would become shareholders. As seen in the list above, the Turbulent co-founders became shareholders during the first transaction in which CIG acquired partial ownership in Turbulent back in 2020.

A couple of final points about the acquisition. The first concerns the appointment of Benoit Beauséjour as CIG's Chief Technology Officer and Marc Beaudet as Senior Vice President, Studios Operations. Those appointments may do more to get Star Citizen launched than any other move CIG can make. I am very skeptical, to put it nicely, about Chris Roberts and his team to manage the project correctly. Getting competent leadership through this sale is a major plus.

The final point is shedding the final pretense that all money raised through sales goes to game development. We've seen the payment of dividends to shareholders back in 2020. Now we see the purchase of a studio yesterday. At the very least, trying to determine how much money was spent on game development and how much on other things is becoming more complicated.