Star Citizen Receives $46 Million From Private Investors

Last Thursday, Cloud Imperium Games, the company developing Star Citizen and Squadron 42, announced that it was accepting $46 million in investments from Clive Calder and his son Keith. In conjunction with the investment news came the release of financial information covering the years 2012-2017. With sold information available, I have a couple of thought.

Crowdfunding is not enough to finish the games. As of Christmas, 2018, Chris Roberts has raised $212.5 million from crowdfunding. A staggering amount the world may never see raised from video game players again. But as the recently released information shows, not enough to complete the game.

CIG Income - 2012 through 2017

Through the end of 2017, CIG had collected $175.5 million from backers. Including the $11.2 from subscriptions, players provided $186.7 million to CIG. In the same amount of time, CIG spent $193.3 million. That's right, at the end of 2017, CIG had spent $6.6 million more than it raised from the fan base. The $15 million CIG had in the bank at the end of 2017 came from the "Other income" category:

The Other income line represents income from partnerships with various hardware and software vendors, sponsorship income and various local incentives which we receive based upon the nature and location of our development and production activities. It also includes any exchange differences as referred above.

With a burn rate of $50 million/year, without the cash infusion from the Calders, Roberts would have had to slow down development, even if he continued to collect $37 million from backers each year.

Roberts finally getting oversight. For six years, Chris Roberts had free reign to do as he pleased in the development of Star Citizen and Squadron 42. I don't think he will like having to answer to investors, even if he retains control over the company. In an interview with Gamasutra in September 2013, Roberts gave his thoughts on investors:

Roberts had lined up independent investors to fund his game, but he was happy to leave them behind when his crowdfunding campaign took off. In the end, he felt investment could lead to getting sold to a publisher -- and for his opinion on that, see above.

"The fact that we don't have to take investors... means that we can just concentrate on delivering a really great game and have no external pressure."

Roberts did have some "great people" lined up to invest in his game. All the same, he says, "I'm happy not to have investors, mainly because even the best investors, they're in it for a return, and at some point they want their money out, and that doesn't always match up to what's good for the game." 

After saying some nice things about Valve and CCP, the article continued:

He has big plans for the franchise that go beyond the launch schedule outlined above. "I just want to make a great game and continue to have fun with it. Because it's a whole sci-fi universe, and there's a lot of things I want to do. And some of them are going to get added after the main launch, because it's a big scope."

Investors pressuring him to sell would inevitably nip those plans in the bud.

"If you have an investor in, three years in, it's a roaring success, they could be like, 'EA wants to buy your company for $400 million, and I'm going to get 10x on my money, so you should take that deal.' And a lot of people get forced in, and a lot of sales happen because of that," Roberts says.

"It's just the nature of the beast, and for me I'm building this universe that I want to curate and be part of for a long time, so I don't want any of that." Roberts would know; he experienced this before at both Origin and his later startup, Digital Anvil, which eventually produced Freelancer after being acquired by Microsoft. 

I did find one passage from the interview amusing, given the state of Star Citizen today:

The first is that it brings him a tremendous savings. "I'm building a game that, if I was doing this at EA or somewhere else, it would be a big budget game, big high profile thing, but we get to do it for less money because I don't have all the overhead, and we have freedom for that, which is great," says Roberts.

"If this was getting built by EA or Activision, it would be a $40-50 million game. We're much more efficient. Our current budget is about 20 [million], but our specific spend is pretty much all on the game." 

CIG must keep the money machine on at full blast. Unlike some detractors, I believe that CIG needs the $46 million investment to adequately promote the release of Squadron 42. I also believe that, if everything goes according to Roberts' plans, the company has enough money to finish development of Squadron 42 and continue development of Star Citizen without needing to tap into the marketing funds. But in order to accomplish the feat, CIG will need to continue to raise $35-$40 million a year from new purchases and ship sales. I'm not sure the company can continue to rely on that type of support.

CIG winds up with one more outside investor. In the announcement of the outside investment, CIG laid out a roadmap for Squardon 42 with the end of the alpha scheduled for sometime in the first half of 2020. Assuming the development team finishes in June 2020, I'd wager the beta period lasts at least 6 months, with a launch sometime in the first half of 2021.

I stated in the section above everything must go perfectly from this point forward for the current funding plan to succeed. Honestly, I don't see that happening. Given both the current burn rate of development plus the need to use the $46 million investment for marketing purposes, I expect Chris Roberts to recruit at least one more investor, as the money from sales of Squadron 42 will not start rolling in until Q2 2021 at the earliest. The amount of slippage in the roadmap will determine the amount needed, but expect a minimum of $10 million more. $25 million more in outside investment is a reasonable expectation.

The fate of Star Citizen relies on the success of Squadron 42. In my years of watching the development of Star Citizen, the most disgusting behavior exhibited by the Star Citizen community is how backers interested in the Persistent Universe shit all over those who want a single-player game.  Without that original demand for a spiritual successor to Freelancer, the entire project would never have begun in the first place.

If CIG winds up selling Squadron 42 for $60, and winds up selling 5 million copies in the first month and 10 million copies the first year, that income should ensure that CIG will have the additional 2-3 years needed to finish Star Citizen sometime in 2023 or 2024. But if the game only sells 1 million copies? Not only will outside funding for Star Citizen dry up, but CIG will need to rush the minimum viable product out the door. I don't think most people really want to see that happen.

Final thoughts. In the long run, I think having outside investors is probably a good thing for backers of Star Citizen and CIG. The picture spelled out by the financial report is of a company that had outstripped its main source of income and only had 2-3 months of financial reserves when the new influx of money arrived. Despite the record amounts of money raised by CIG from fans, Chris Roberts had spent all of that money and was chewing through the reserve generated by side deals and currency valuations. If CIG can hold to its production schedule, the game still has a chance. Honestly compels me to point out that Roberts' history for the past 20-odd years indicates he cannot stick to a schedule. Failure to produce, however, means more outside investment and eventually Roberts losing control of the company. Roberts' detractors will argue that he has aimed for a buyout the entire time.

I really do hope that Squadron 42 and Star Citizen are made without the need for any more outside investment. The idea of gamers getting together to raise over $250 million to create a AAA-level video game through crowdfunding is a fairy tale come to life. But I think I'll wait until Squadron 42 hits Steam in a finished form before buying into the dream. Perhaps I've played EVE too long, but when something sounds too good to be true, it usually is.

Star Citizen Has Raised How Much?

Star Citizen is in the news once again. On the positive side, the latest ship sale pushed player funding for the game over $250 million USD.

Star Citizen Funding Page As Seen on 5 December 2019

On the negative side, at least for Cloud Imperium Games, the BBC produced technology show Click is broadcasting an episode on Star Citizen:

Click investigates why there has been continued delays in bringing $250m crowd funded video game Star Citizen from Gameplay [sic] testing to market.

Now, $250 million is an amazing number. Going back to when Chris Roberts began the current Star Citizen project in late 2011/early 2012, the $200 million Bioware reportedly spent producing Star Wars: The Old Republic was considered a massive amount of money. But the crowd funding is not all the money raised by Chris Roberts and Cloud Imperium Games.

In December 2018, CIG released financial information to the public after receiving $46 million in private funding designated to market Squadron 42 & Star Citizen.

Cloud Imperium Games income, 2012-2017

In the first 5 years of operations, CIG had collected an additional $11.2 million in subscriptions. CIG also raised an additional $10.3 million in "other income", defined as:

Income from incentives, sponsors, licensing and partnerships. This also includes timing differences and bookings for exchange rate differences between the standard rates used for the counter and actual exchange rates received.

So through today, CIG has raised at least $274.7 million. But we don't know how much CIG raised in subscriptions and other inomce. Given that in both 2016 and 2017 CIG raised $8.8 million for both categories, I think a reasonable estimate through the end of 2019 is an additional $17.6 million. Prorating that amount gives us an estimate of $16.9 million raised for the period January 2018 - November 2019.

Raising $291 million is a fairly impressive amount. Add in the $46 million in private funding and Cloud Imperium as raised an estimated $337 million to create and market Squadron 42 and Star Citizen. And given the beta for Squadron 42 was pushed back another 3 months to Q3 2020, I anticipate that by the time the first game launches, the funding raised will approach $400 million.

Chris Roberts' Continuity Error In His Letter From The Chairman 2025

Chris Roberts, the co-founder and CEO of Cloud Imperium Games, really liked making movies. Before starting work on the Star Citizen project, Roberts produced movies such as The Lord of War, Lucky Number Slevin, and The Punisher. Since he's familiar with the concept, I think he should appoint a continuity supervisor for his Letters from the Chairman, because I think I found an error in this year's entry in the series.

Roberts really talked up some statistics from 2025.

We had record-setting engagement this year, with more than 64 million hours played in Star Citizen (up from 48 million in 2024). You set new records in peak concurrency and unique daily users, and we saw huge increases in every metric, including 40-60% increases in average daily users and average peak concurrency. We also saw huge improvements in server stability with 57% fewer player disconnections per 1 million player hours compared to 2024.

Impressive numbers unless one is suspicious. Or nosy. Seeing the statistics I wondered if Roberts always included statistics like these, I started reading some of the older letters. Needless to say, I found a continuity error in the 2024 Letter from the Chairman.

Over one million of you have played 32 million hours in the game this year, and our ranks have swelled by almost half a million Citizens. 

Now I was totally distracted from the narrative Roberts was trying to sell; that of a rapidly growing game. But if the number of hours played actually doubled, no wonder so many content creators were proclaiming that so many new players had taken up Star Citizen. 

I found I had accidently stepped into a rabbit hole and started trying to track down the way out. The 2023 letter didn't have hours played but did state the year had the highest ever. The 2022 letter, however, had a solid number, 46 million hours played.

The above is why I say Roberts needs a continuity supervisor. A drop from 46 million hours in 2022 down to 32 million hours makes sense since the number of new accounts created per year dropped by 44.3% from 2022 to 2024. Then the huge increase from 2024 to 2025 also makes sense considering the rapid rise in new accounts created (46.2%). In fact, using 32 million hours fits perfectly with the message of lots of renewed interest plus better server performance leading to a doubling of hours played.

So where did the 48 million hours played come from in the 2025 letter? Did Roberts just make a number out of thin air? In my eyes that seems the case. A careless and sloppy mistake. Another reason why those who support the development of Star Citizen tend to want Roberts to be heard rarely, if at all.

Cloud Imperium UK Ltd's 2023 Accounts Are Not Pretty

At the beginning of 2024 fans of Cloud Imperium Games were ecstatic. The company's cash shop had posted another year of record sales of $117.6 million, a year-over-year increase of 3.5%. But in the financial report for 2022 posted to the CIG corporate website, the company revealed worker headcount increased in 2023 from 860 employees to over 1100. Did the overall company revenue match the nearly 30% spike in employees? In a filing with UK Companies House on Friday, the answer apparently is no.

For the second year in a row, Cloud Imperium UK Ltd filed its annual accounts late. Why should followers of games like Squadron 42 or Star Citizen care? Because Cloud Imperium UK Ltd is the "Rest of the World" category in CIG's annual financial reports. The company describes itself in its strategic report as follows:

Principal Activities

Cloud Imperium UK Ltd. operates from the UK managing the rights for the video games Star Citizen and Squadron 42 outside of the US market. Cloud Imperium UK Ltd. generates its revenues from its subsidiary, Roberts Space Industries International Limited, a company engaged with publishing activities for worldwide markets excluding USA. From its revenues, it directly funds Cloud Imperium Games Limited, the largest video game development presence in the Cloud imperium Group and all other non-publishing activities pertaining to Star Citizen and Squadron 42 outside of the USA.

Looking at the Group Statement of Comprehensive Income one can see that the Group recorded a loss of £8.4 million, compared to a profit of £8.5 million in 2022. Here is CIG's explanation.

Fair review of the business

During the year ended 31 December 2023, the Cloud Imperium UK Ltd. group ("the Group") reported revenue of E47.9m (2022: E44.6m) following various alpha releases made during the year. Costs have risen to E67.7m (2022: E43.2m) as the Group continues to progress with the development of the video game Squadron 42, but to which it has added the development of Star Citizen. The primary development for Star Citizen is being undertaken from the UK following the early alpha release version at the end of 2022, which introduced persistence into the game and marked the end of that phase of development. The road to commercial release for the full Star Citizen game is being undertaken in the UK. As usual the publishing activities associated with the video game Star Citizen outside of the US continue to be undertaken within the UK group. Other operating income has increased to E 11.8m (2022: E6.9m) as a result of an increased video game tax credit arising from increased development activities in the UK, with the Group recognising a loss ofE8.4m (2022: E8.5m profit). At 31 December 2023, the group reported net assets of E33.3m (2022: E40.9m).

This loss is consistent with the mid to long term goals of the business aimed at commercial release of the games in development and in particular the cost committed to the development of Squadron 42 to get it to a stage where it can prepare for future commercial release with greater visibility and control.

The passage suggests that with development for Star Citizen now occurring in Manchester that costs in the US should have decreased significantly. But in 2022 the average number of employees working for Cloud Imperium UK each month jumped 49%, from 573 in 2022 to 854 in 2023. Given the total number of employees world-wide jumped to over 1100, headcount in the U.S. probably remained steady.

One of the problems with just viewing the financial information from the UK is that increased costs in one half of the company could result in lower costs in the U.S. Observers will need to await the posting of the comprehensive financial report for 2023 to appear on the CIG corporate website for actual profit or loss figures.

With the boring but required coverage of Cloud Imperium UK Ltd's losses out of the way, let's get to the interesting stuff.

The Turbulent Acquisition - When last year's strategic report revealed CIG purchased the remaining 75% of Turbulent for CA$9.8 million, I was awaiting fuller details about the transaction in this year's accounts. For those not familiar with CIG and its history, an explanation from the Group Statement of Comprehensive Income is below.

On 1 July 2023, the group acquired the remaining 75% of the issued share capital of Turbulent Media Inc., taking the group's total equity interest to 100%, for a total consideration of £4,330,702.

Cloud Imperium UK Ltd. and Turbulent Media Inc. have successfully collaborated since 2012 on the ongoing evolution of Star Citizen, the iconic Massively Multiplayer AAA video game currently in development. Turbulent Media Inc. is based in Montreal, Quebec in Canada.

Turbulent Media Inc. has been integral to the development of Star Citizen has equally been integral to the development of our e-commerce platform, building our marketing and platform infrastructure, and now to actively contributing to the development of Star Citizen and SQ42. Management recognises the shared cultural values and passions between the two companies, which have helped create a natural synergy and development pipeline for our joint projects over the past decade.

Management have estimated the useful life of the goodwill to be 10 years. The acquired software is integral to the daily development of Star Citizen that has now been moved to the UK. The strong customer relationships will generate external revenue for the group. The group will now utilise the assembled workforce to continue the development of Star Citizen and SQ42.

Upon derecognition of the investment in associate, the share of historical profits and amortisation of Goodwill of the investment have been recycled against retained earnings in accordance with FRS102.

The total consideration of £4,330,702 was CA$7.2 million at the exchange rate on 1 July 2023.

Reading the final details of the deal were amusing as CIG was able to consider £2.9 million owed to Turbulent wiped off the books. Also, payments owed to the two co-founders of Turbulent, Benoit Beausejour and Marc Beaudet, count as employment expenses of £1,945,744. The payments were contingent on the pair staying with CIG for two years. I believe the two-year period is over on 1 July 2025.

The Put Option - Last year a conflict arose over a financial arrangement made between the Calders and CIG when they made their initial investment into the company. The continued existence of the put option, however, is still causing conflicts between CIG and their independent auditors, PwC.

The auditor explained why the audit could only give a qualified opinion on the accuracy of the financial accounts.

Basis for qualified opinion

The Group and Company have disclosed a contingent liability within note 31 of the financial statements. This is a put option entered into by the Company in 2018 with certain minority sharehotders which, if exercised, would result in a contractual obligation for the company to deliver cash or another financial asset to the holders in exchange for the shares. In accordance with FRS 102 this should have been recognised as a financial liability within the balance sheet. After initial recognition, the liability should have been subsequently measured in accordance with section 11 and section 12 of FRS 102 with the changes recognised within the Statement of Comprehensive Income. Management has outlined a valuation within Note 31 which is material, however, we were unable to obtain sufficient appropriate audit evidence in relation to this balance and so have qualified our opinion in respect of this put option.

The put option as described at Note 31 is a bit confusing. First the description.

A contingent liability exists with respect to 1,877 ,400 (2022: 1,877,400) of the 11,745,920 (2022: 11,715,800) issued shares as of 31 December 2023. The holders of these shares have the right to put their shares back to the Company for repurchase at a minimum return premium of 6% per annum on the initial purchase price. For 1,599,900 (2022: 1,599,900) shares they also have a value formula based upon the three years' average revenue leading up to the start of the exercise period.

When the information first emerged last year, the smaller investor was identified as Eli Klein, who advised CIG on the Calders' initial $46 million investment in the company. The larger investors were the Calders, specifically Keith Calder and Indus Management, LTD. According to the above, the shares acquired from Ortwin Freyermuth last year do not qualify for the put option.

The timing of when the option may be exercised is unusual. The clock doesn't start running on the decision period until CIG completes its accounting for the fiscal period. A move that makes sense since in at least one instance the payout is determined by a formula that extends for three years.

For 1,599,900 (2022: 277,500 shares were exercisable between 01 January 2024 and 31 March 2024) shares their first put rights are exercisable within 30 days of the financial statements being delivered for the year ended 31 December 2025 and within 30 days of the financial statements being delivered for the year ended 31 December 2028 and for all   shares (2022: 1,877,400). Separately 277,500 shares are exercisable on 31 December 2027.

Based upon representations from the holders and given the company's financial position, budgets and forecasts the company currently assesses the probability of the holders exercising their put rights to be remote.

So according to the above, Klein can exercise a put option within 30 days of the financial statements being delivered for the years 2027 and 2028. For the Calders, the years are the end of 2025 and 2028. I had been under the impression a decision was required in the first quarter of those years.

The explanation for why CIG did not want to include the contingent liability is because, to summarize, the terms are confusing. How confusing? Here's the example CIG included in the accounts.

Consequently, consistent with prior years, the company has not recognised this put option as a financial liability measured at the net present value of the expected payments. If it were to do so at the minimum return value on the investment for those shares it would generate a liability with a present value of £30.4m at 31 December 2023 (2022: £31.1m) using a discount rate of 10% (2022: 7.32%). This would rise to £44.6m (2022: £47.8m), based upon a multiple applied to an estimate of three prior years revenue leading up to the exercise dates. There are many assumptions underpinning the calculation multiple before the probability of it being exercised is considered, and the fact that this is considered remote is the primary reason for not recognising the uncertain net present value of this potential contingent liability.

Of course, the claim that any of the shareholders wishing to take advantage of the put option is so remote the company didn't need to consider the possibility did not fly with the auditor. But if a put option is exercised at the end of 2028 probably would exceed $100 million.

Post balance sheet events - A loss of £8.4 million is possibly an accounting trick for tax purposes. The acquisition of Turbulent was possibly a shrewd move, especially considering the expenditure was much less than reported in the 2022 company accounts. The put options are complicated affairs that shareholders probably won't exercise in the next few years, if ever. But then we get down to the post balance sheet events. These are financially significant events that don't affect the evaluated year's balance sheet. 

The first is the sale of 247,520 shares to an existing shareholder on 15 January 2025. The sale price of each share was $20.20, making the purchase $5 million, or £4.1 million at the day's exchange rate. The fact the buyer was an existing shareholder was a new detail not known before the release of the accounts.

The second is a previously unknown event. On 3 March 2025 CIG borrowed £10 million, or $12.6 million from an existing shareholder. While the identity of the shareholder is unknown, the principal of the loan is due on 31 December 2027.

From page 6 of the 2023 company accounts

Looking back, Cloud Imperium UK Ltd posting an £8.4 million loss two years ago is potentially embarrassing but without the figures from the U.S. portion of the operation, explainable. The fact that the auditor of the report could only give a qualified opinion on the facts surrounding the Calders' put option, a contingent liability potentially larger than CIG's assets, is worrisome. Especially since the liability is likely to exist for the next 5 years. But the raising of £14.1 million ($17.6 million) over the past 3 months is part of a series of events since the end of 2023 that leads one to believe CIG is in financial trouble.

In March 2024 Chris Roberts explained the departure of staff as well as announcing the eventual closure of the Los Angeles office for game development. In April & May, Cloud Imperium co-founder and long-time business associate of Roberts, Ortwin Freyermuth, sold off his shares in the company and resigned from the board of directors in June. In December word once again spread about layoffs at Cloud Imperium, this time involving quality assurance staff.

In January, right before the sale of $5 million in CIG shares, word of a leadership shakeup leaked out. The new leadership team adopted a strategy that resulted in first quarter cash shop sales rising over 47% compared to the first three months of 2024. So in addition to raising $17.6 million from existing shareholders, the cash shop raised an addition $8.2 million. Add in the closure of the Los Angeles office for administration as well as game development and matters don't look good. And with Friday's announcement that CitizenCon would not take place physically and only last one day, the bad news continues to roll on.

Cloud Imperium Games Acquires $17.25 Million In Additional Outside Funding

Is Chris Roberts about to lose control of another video game studio?

In December 2000, Chris Roberts walked away from Digital Anvil while the game Freelancer was under development. According to a Eurogamer article:

In the wake of the collapse of Digital Anvil, co-founder and soon-to-be-former CEO Chris Roberts has spoken about his decision to leave the company he founded just four years ago. As we suspected, the company's troubles were down to "wanting to develop not only hugely ambitious games, but too many hugely ambitious games", leaving the company's finances stretched after four years without a single game being released - the sole title to emerge with the Digital Anvil name on it was actually mostly developed by a small British company.

Having left the monolithic corporate world that is Electronic Arts almost five years ago to found Digital Anvil in the first place, it is somewhat ironic that his dream development studio is now being taken over by the monolithic corporate world that is Microsoft, and Roberts has confirmed that his decision to leave the company is simply because he has no desire to find himself in the same situation again.

Microsoft eventually published a scaled-down version of Roberts' dream in March 2003.

On Friday, Cloud Imperium Games announced another round of outside investment of $17.25 million into CIG.

March 27, 2020 – Today, Cloud Imperium announced that existing investors – the Calder Family Office, Snoot Entertainment, and ITG Investment – have exercised a one-time option to purchase further shares in the company. The share prices reflect a discounted option price for existing shareholders that was pre-negotiated at the time of the initial investment in 2018. There were no changes to the Board composition as a result of this transaction. Chris Roberts continues to maintain full control of the Board and Group.

From Cloud Imperium Financials for 2018

Combined with an initial investment of $46 million by Clive and Keith Calder in 2018, CIG has now raised $63.25 million in outside funding. Additionally, as of 1600 UTC on 31 March 2020, CIG had raised $275.4 million in crowdfunding sources such as game and ship purchases. According to the Cloud Imperium Financials post for 2018 released in December 2019, CIG had also raised $43.2 million through subscriptions and other sources through the end of 2018. That is a confirmed total of $381.8 million raised to create and market Squadron 42 and Star Citizen, which does not include the other categories totals for 2019 and the first quarter of 2020.

From Cloud Imperium Financials for 2018

One might think that $380 million is enough for Roberts to finish the project. But if the burn rate displayed for 2018 continues to today, I have my doubts. Through the end of 2018, CIG had spent $249.5 million. If the rate of spending in 2018 continued, CIG has spent almost $320 million on development and marketing costs though the end of the first quarter. If the burn rate settled back down to 2017 levels, we are still looking at spending of around $310 million.

Star Citizen and Squadron 42, depending if the pair are released as one or two games, are on pace to be in the top 10, if not the most expensive, video games ever made. Crowdfunding, no matter how successful, is not enough to get the development of the project completed.  Looking back, I think what I wrote back in December 2018 in the wake of the initial outside investment still holds true.

In the long run, I think having outside investors is probably a good thing for backers of Star Citizen and CIG. The picture spelled out by the financial report is of a company that had outstripped its main source of income and only had 2-3 months of financial reserves when the new influx of money arrived. Despite the record amounts of money raised by CIG from fans, Chris Roberts had spent all of that money and was chewing through the reserve generated by side deals and currency valuations. If CIG can hold to its production schedule, the game still has a chance. Honestly compels me to point out that Roberts' history for the past 20-odd years indicates he cannot stick to a schedule. Failure to produce, however, means more outside investment and eventually Roberts losing control of the company. Roberts' detractors will argue that he has aimed for a buyout the entire time.

Star Citizen And Cloud Imperium Games Reach $500 Million In Sales

Last last night I refreshed my browser and the Funding Stats counter on the Roberts Space Industries website reached $500 million.

$500 Million Achievement Unlocked

Cloud Imperium Games incorporated in April 2012 and launched a Kickstarter on 18 October 2012. I highly doubt anyone thought the single player Squadron 42 and accompanying Persistent Universe would still be under development 10 years later, especially after raising a half a billion dollars. CIG itself estimated delivery of the game in November 2014.

The Initial Star Citizen Pitch Video

Things didn't quite work out with the timing. The amount of money CIG raised so early wound up contributing to feature creep. What initially was a spaceship game became one with a huge first person shooter component. 

CIG doesn't depend on the ship and equipment sales recorded on its funding site. Total known income since October 2012 so far is:

• Ship/equipment sales: $500 million (through 20 October 2022)
• Subscriptions: $22.8 million (through 31 December 2020)
• Other income: $44.7 million (through 31 December 2020)

In addition, CIG has received a total of $63 million from South African billionaire Clive Calder and his son Keith's Snoot Entertainment. The first phase of the investment, $46 million, was originally targeted for marketing Squadron 42 for a summer 2020 release. CIG missed that date also.

But despite all the delays, the money machine known as Cloud Imperium Games marches on. May Chris Roberts one day delivered a finished product and make thousands of players' dreams come true.

New Details About The Calders' Investment In Cloud Imperium

Cloud Imperium UK Ltd.'s financial accounts for 2022 have provided a fair bit of content this year. First, the accounts were not filed on time with UK Companies House. When the accounts finally showed up in March we discovered an audit by a new accounting firm found discrepancies dating back to 2015. As a bonus Cloud Imperium included information about the July 2023 acquisition of Turbulent Media. After further reading, the 2022 financial accounts also provide additional information about the investment of Clive and Keith Calder in Cloud Imperium Games.

First, a review of what was initially known about the deal from Wccftech:

• Cloud Imperium (both the UK Ltd and the US LLC legal entities) have agreed a private investment from an external party amounting to approximately $46 million in exchange for new shares being issued (113,861 in each of the UK and US entities), amounting to approximately 10% of the overall company. This gives the various entities a combined valuation of approximately $496 million once the new money is taken into account.
  
  
• Two new board members join the boards of both the UK and US entities, these being Dan Offner, representing the new investors (Clive and Keith Calder), as well as Eli Klein who is a long-time friend of Chris Roberts and has apparently been a sometime advisor in recent years.
  
  
• Board and company control remains with Chris Roberts as Chairman, CEO and majority shareholder.
  
  
• Money to be used for marketing and business development initiatives as Squadron 42 and Star Citizen head towards launch.
  
  
• CIG will release full historical financial details from 2012 through to 2017 via a new corporate website.
  
  
• Squadron 42 roadmap released and is expected to be feature complete by the end of 2019 with alpha/beta in 2020.

In March 2020 Cloud Imperium received a second round of investment of $17.25 million, bringing the total up to $63.25 million.

Up until now, the public knew the amount of money received by Cloud Imperium. With the release of the 2022 financial accounts, we now know the returns the investment group expects to receive.

from page 37 of the 2022 financial accounts

A contingent liability exists with respect to 1,877,400 of the 11,715,800 issued shares as at 31 December 2022. The holders of the 1,877,400 shares have the right to put their shares back to the Company for repurchase at a minimum return premium of 6% per annum on the initial purchase price. For 1,599,900 shares they also have a value formula based upon the three years' average revenue leading up to the start of the exercise period.

At this point in the explanation, I needed to look up the definition of a put option. According to Investopedia:

A put option (or “put”) is a contract giving the option buyer the right, but not the obligation, to sell—or sell short—a specified amount of an underlying security at a predetermined price within a specified time frame.

In other words, the 6% per annum figure is the floor for which the Calders can expect to receive from their investment. The higher the sales, the more their investment is worth.

I need to explain that the Calders were not the only investors. Eli Klein's Infatrade Group Corporation currently owns 277,500 shares of Cloud Imperium UK Ltd and presumably the same number of shares (or at least the same percentage) in the US portion of the business. Klein was one of the two new directors brought onto the board when the first round of investment was announced. 

With the explanation of Klein's involvement out of the way, here are the periods the various investors could exercise their put options.

• 1 January 2024 to 31 March 2024 - Klein
• 1 January 2025 to 31 March 2025 - Calders
• 1 January 2028 to 31 March 2028 - All

Due to the lateness of the submission of the accounts, we already know Klein declined to exercise his 2024 option. CIG is maintaining the likelihood of the Calders exercising their option in 2025 is remote. If correct, then the first quarter of 2028 is key, as if the investors plan on cashing out according to the existing plan, they will need to do so then.

If the investors exercise their put options, the minimum amount of money they will receive is $115 million, their initial $63.25 million plus an additional $51.8 million at 6% annual interest. But CIG used a figure of 7.32% as an estimate of how much investors would receive, which would push the figure up to $130 million in 2028.

To put the $130 million figure into context, CIG spent $129.4 million in 2022. The money involved warranted the following paragraph:

Another reason for not recognising is due to the nature of the put terms, as if exercised the put proceeds would be payable out of available cash in excess of that required to effectively operate the business and thus that liability would remain undischarged until such available cash became available.

Hopefully such an eventuality never occurs as many Star Citizen content creators expect the announcement of the sale of copies of Squadron 42, even if only pre-orders, at CitizenCon this October. If priced at an expected $70 per copy, Cloud Imperium will only need to sell around 4 million copies to pay off the investors. No need to worry, right?

Twenty Years Of EVE Online As Viewed By The Board Of Directors

Tomorrow is the 20th anniversary of the launching of EVE Online. I imagine the internet will have quite a few stories about the history of EVE posted over the next few days. I thought I would take a different tack and try to use CCP's own words to tell the story. Each year, the company (and later on the holding company) has to submit financial statements to the Directorate of Icelandic Revenue and Customs. In those statements is a section in which the company records a description of the highlights (and lowlights) of the year.

I'm not sure what happened, but I was able to obtain all financial statements for CCP ehf going back to the year 2003 from the Icelandic Revenue and Customs website. I was also able to obtain the filings for going back to 2018 for Pearl Abyss Iceland ehf. I highly suspect that the $40 million round of investment capital to develop a Web3/blockchain game changed the rules on access to historical data. With 20 years of financial documentation at my fingertips, looking back at 20 years of history on the 20th anniversary became feasible.

The best part is, one can read the history without needing to have an accounting or business degree. Ever wonder what the leadership of CCP was thinking about when a decision was made? The summaries found in the yearly filings might hold the answer.

I will give a tease of a piece of information I found while ordering the documents. According to the Icelandic Revenue and Customs website, CCP's original name was Loki multimedia ehf and remained so from 1997 through 1999, only changing to Crowd Control Productions in 2000.

I did add a little information for each year that might interest the accountants and business majors who may read this post sometime in the future. For instance, from 2003 to 2006 the filings were done in Icelandic krona. For those years, I converted the ISK amounts to US dollars as best as I could. I also converted the revenue and profit/loss amounts for each year to adjusted 2022 dollar amounts. Going back twenty years, I thought some people might find the ability to review years in constant dollars 

I also made one additional choice. For many years, the records contained lists of the biggest shareholders in CCP. Since many people like to blame investors for bad decisions in video game design, I thought I would include them if available. I have my ideas of which investors may have had a detrimental effect on the development of EVE. I wonder if people will agree.

I do have to make one apology in advance. For some years the filings were in Icelandic. I did my best to translate to English, but some of the translations are a little wonky.

With the preliminaries out of the way, I hope you enjoy this little journey down memory lane as recorded by the boards of directors of CCP and Pearl Abyss Iceland over the last 20 years.

2003 - Surviving A Major Loss

Note: For EVE's first four years all financial reporting was conducted in Icelandic krona. The conversion to US dollars was performed by doing a conversion at the rate existing on the last business day of the year.

Revenue: 160.9 million kr.
USD: $2,252,600
(2022 USD: $3,582,797)

In May, the video game "EVE" was released in Europe and North America. An agreement had been made with the publishing company Simon & Schuster for the distribution of the game, for an advance payment of USD 1,400,000 among other things. Shortly after publication of the game, Simon at Schuster decided to shut down its publishing division. In November, CCP acquired the distribution rights to pie for USD 150,000. It was also agreed that the balance of the advance payment would be canceled and are they recognized as income as explained in note 4.

Income from subscriptions and sales of EVE during the year amounted to ISK. 160.9 million, but operating costs were ISK. 381.7 million. The number of jobs was on average 35 during the year and salary payments amounted to ISK. 136 million.

The company's equity is negative by ISK. 370 million at the end of the year. All development costs of EVE are charged as soon as it is established and the intellectual property rights of the company are not capitalized. It is difficult to assess on their value but | at the end of 2002, EVE was valued by the foreign publisher at USD 5.3 million. That is the company's board of directors believes that the interests of its creditors are best served by continuing operations, since the income will continue now growing. The main creditors have given the company a payment deadline until it becomes clear whether the income will be sufficient under debt.

2004 - On Its Way

Revenue: 573 million kroner.
USD $9,168,000
(2022 USD: $14,203,605)

The company's situation was extremely difficult at the beginning of 2004. Loss of operations and significant arrears. Equity was negative about 369.8 million. Despite the difficult financial situation at the beginning of the year, good progress was made in improving the business. Income almost tripled between years, the margin level improved, there were unfavorable loans refinanced on better terms and an end to arrears. At the beginning of 2005, the company is delivering good results profit from operations. For example, the profit for the month of January 2005, for capital items, was close to 9 million ISK

On December 3, 2003, CCP regained the rights to market and distribute the video game EVE. On the same day, it was decided to offer a free download of the EVE software on the game's website. This one opening together with strong marketing efforts resulted in 72,885 new subscriptions being sold in 2004. At the end of the year in 2004 there were 53,269 active subscriptions and about six thousand of them have been with the game since its inception.

Revenues from subscriptions, sole and other services to EVE during the year amounted to 573 million ISK, 29 million of which revenue came from the three, six and twelve month prepaid subscriptions that were sold late in the year and the income from them was therefore not recognized in the 2004 profit and loss account as prepaid income in the balance sheet. The company's operating costs in the past operating year were ISK 556.9 million.

The number of jobs was on average 40 during the year and the salary cost was 178, million.

Several significant milestones were achieved during the year. On April 25th, 10,396 players played EVE at the same time. This was the first time that so many people played together in one western game world. Towards the end of 2004 had this record has been bumped up to 12,258 concurrent players.

As of September 12th, the number of active subscriptions to EVE exceeded 50,000, but in the West there are only 8 other games in that group.

In November, a new version of EVE was released and it was accompanied by considerable press coverage. Detailed articles appeared including in PC Gamer, PC Zone and EDGE. As a result of the new version, there has been a significant reduction in dropouts users.

In October 2004, a new and more favorable cooperation agreement between Síminn and CCP entered into force for services, operation and hosting of EVE In London.

In August 2004, the majority of convertible debt was converted into new non-convertible loans at the equivalent coins and the company's income. The last convertible loan was converted into debt at the beginning of January 2005.

The company's income is almost exclusively in foreign currencies and is divided between EUR and USD as soon as possible to halves The significant strengthening of the króna in the fourth quarter therefore caused a decrease in income between the third and of the fourth quarter in króna, despite the fact that they actually increased in euros and dollars. The company's exchange rate gain from loans in foreign currency completely offsets the loss of income as reinforcement of the króna has caused in the year 2004.

Development costs for EVE are charged at the same time as they are incurred and intellectual property rights of the company are not capitalized.

2005 - First Profitable Year

Operating profit: 157,586,274 krona 
USD: 2,521,380
(2022 USD: $3,778,261)

Profit of CCP hf. in the year 2005 after taxes amounted to ISK. 157,586,274. It should be borne in mind that income tax credit is due of previous years' tax losses was fully capitalized during the year. According to the balance sheet except assets the company's ISK 259,968,318, but the book equity at the end of the year is negative by ISK. 193,634,542.

All the company's development costs have been charged as soon as they are created and the intellectual property rights are not capitalized. The company's income increased a lot in 2005 from the previous year, and especially in the last months of the year and the company is now operating profitably. Operating plans assume that equity will be positive in 2006.

The number of jobs at the beginning of the year was 42 and 54 at the end of the year, and wage costs were 231 million during the year.

Several significant milestones were achieved during the year. In July, a major addition to EVE Online was launched under the name “Cold War Edition”, and another in December called “Red Moon Rising.” The number of subscribers increased a lot during the year and are in March 2006, over 100,000. A major milestone was reached at the end of February 2006 when a contract was signed with Optic Communications about the marketing and operation of EVE Online in China.

At the end of 2005, there were 112 shareholders in the company, compared to 100 at the beginning of the year. Two shareholders owned more than 10% of the share capital at the end of the year, Brú Venture Capital hf. with 35.0% and S. Reynir Harðarson with 12.6%.

2006 - Expansion

Operating profit: ISK 453,963,149
USD $6,355,484
(2022 USD: $9,523,626.06)

CCP’s net profit for the year 2006 amounted to ISK 453,963,149. At year end, the Company’s assets amounted to ISK 1,040,765,303, while the shareholders’ equity was ISK 481,082,674.

All development costs are expensed as incurred during the course of the year and intellectual property rights for EVE Online are not capitalized. Revenues continued to increase throughout the year, with Q4 2006 yielding ISK 497 million in total revenue compared with ISK 227 million in the same quarter of 2005, and the company has enjoyed widening margins in tandem with this growth..

The number of employees at year-end was 135 in the company’s offices in Reykjavík, Shanghai and Atlanta, compared to 47 at the beginning of the year. Salaries and related expenses amounted to ISK 483 million.

The Company achieved a number of important milestones during the year. In July the Company launched, in cooperation with Optic Communications, the Chinese version of EVE Online, operated from Optic’s facilities in Shanghai. In August further regional expansions were made in the form of a German language version of the game, hosted on CCP’s servers in London. 

In November the acquisition of White Wolf Publishing was concluded. Later in the month of November a major expansion to the EVE Online universe was released, EVE Online Revelations, and was well received in the market, lifting the subscription base of EVE Online in London above 150,000.

At year-end, shareholders in CCP hf. numbered 96, compared to 112 at the beginning of the year. 

Three shareholders owned more than 10% of the shares in the Company at year-end: NP ehf. with 34.2%, Teno Investments with 16% and S. Reynir Harðarson with 12.2%.

2007 - Continued Growth

Note: In 2007, CCP began using international standards (described below) and recording their finances in US dollars.

Revenue: $37,155,107 (USD 2022: $52,442,958)
Profit: $2,998,255 (USD 2022: $4,231,917)

The Consolidated Financial Statements for the year 2007 consist of the Consolidated Financial Statements of CCP hf. and its subsidiaries, together referred to as the Company (Group). The Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union and denominated in USD for the first time.

The total sales of the Group amounted to USD 37,155,107. The profit of the year amounted to USD 2,998,255.

According to the Balance Statement the Company’s assets amount to USD 47,295,214, the year’s end book value of equity is USD 13,527,271 and the Company’s equity ratio is 28.6%. 

The number of employees at year-end was 283 in the company’s offices in Reykjavík, Shanghai and Atlanta, compared to 135 at the beginning of the year. Salaries and related expenses amounted to USD 15,591,746, thereof USD 4,255,665 capitalized.

The Company reached a number of important milestones throughout the year. In March the Company became the proud recipient of the Red Herring 100 Europe Award, an award given to the top 100 private technology companies based in the EMEA (Europe, Middle East and Africa) region each year.

In June a fulltime in-world economist for EVE Online was appointed, making it the first time a Massively Multiplayer Game has commissioned a dedicated PhD credited economist to operate at this level of economic monitoring and research for a virtual world. 

In January CCP Asia moved to a bigger offices in the French Concession district of Shanghai and in October CCP North America moved into new and improved facilities in Stone Mountain, GA focusing on the development of the company’s next MMOG, World of Darkness. 

By the end of the year the number of EVE Online subscribers had reached an all time high of roughly 220,000. This was in large part achieved through two major expansions to the EVE Online universe, EVE Online: Revelations II and EVE Online: Trinity, released in June and December respectively.

At year-end, shareholders in CCP hf. numbered 99, compared to 96 at the beginning of the year. Three shareholders owned more than 10% of the shares in the Company at year-end: NP ehf. with 34.0%, Teno Investments with 16.5% and S. Reynir Harðarson with 12.1%.

2008 - Rolling Along

Revenues: $46,482,140 (In 2022 USD: $63,181,798)
Profit: $5,062,431 (In 2022 USD: $6,881,212)

The Company’s revenues in 2008 were USD 46,482,140. The profit for the year amounted to USD 5,062,431. Assets at year-end were USD 43,837,015, with shareholders’ equity of USD 18,841,753, or 43%. The Company employed 353 people at year-end in its offices in Reykjavík, Shanghai and Atlanta, compared to 261 at the beginning of the year. Salaries and related expenses amounted to USD 18,581,204, of which USD 7,344,250 was capitalized as development cost.

The Company achieved a number of important milestones during 2008 and received various accolades, including a global online award for EVE Online from the Korean Game Industry Agency (KOGIA). Early in the year the CCP Iceland office expanded by inaugurating the newly renovated 4th floor of the office building in Reykjavik. March saw the formation of the Council of Stellar Management (CSM), the first democratically-elected governing body in a virtual world. In November a partnership with Atari was announced, which will see Atari exclusively distribute boxed versions of EVE Online in 2009. Two new expansions to the EVE Online universe were launched successfully, EVE Online: Empyrean Age and EVE Online: Quantum Rise, released in June and November respectively. The two expansions helped to push the subscriber number to nearly a quarter of a million by the end of the year, or 244,551 to be exact.

The Company‘s shareholders reached 119 at year-end compared to 99 at the beginning of the year. Shareholders owning more than 10% were NP ehf. with 34.0%, Teno Investments with 17.3% and S. Reynir Harðarson with 11.4%.

2009 - Bigger Than Iceland

Revenue: $55,268,791 (In 2022 USD: $75,393,466)
Profit: $6,190,230 (In 2022 USD: $8,444,239)

The Company’s revenues in 2009 were USD 55,268,791. The profit for the year amounted to USD 6,190,230. Assets at year-end were USD 74,375,469, with shareholders’ equity of USD 43,932,549, or 59.1%. The Company employed 451 people at year-end in its offices in Reykjavík, Newcastle, Shanghai and Atlanta, compared to 353 at the beginning of the year. Salaries and related expenses amounted to USD 26,725,080, of which USD 12,096,131 was capitalized as development cost.

EVE Online demonstrated continued growth in 2009, with paying subscribers increasing by 34% in the year. What started as an early experiment to build a single shard science fiction virtual world has now developed into a leading, internationally recognized massively-multiplayer online (MMO) world. Its subscriber base has exceeded that of the entire nation of Iceland, and at the age of seven—almost unheard of in this industry—EVE Online is the 2009 PC Gamer MMO of the year. Two successful expansions to the EVE Online universe were launched in 2009 – Apocrypha in the spring, also bringing back EVE Online as a boxed product to stores around the world, and Dominion in the winter.

In addition, the Company formally announced its MMO / First-Person-Shooter console game called DUST 514, and made continued progress in the development of World of Darkness, our next MMO focused on Vampires and the Goth genre. Finally, the growth of the Company from a development and employee perspective continued. All three of our previous offices grew in 2009, and we had the good fortune of opening a fourth office in Newcastle, England, which has quickly become our center of engineering excellence.

The Company issued additional equity in December 2009, pursuant to a private placement directed to existing shareholders. The payment for binding subscriptions is receivable in two tranches during 2010, the first of which, representing approximately 60% of the proceeds, was completed in Q1. After completion of this offering, shareholders owning more than 10% are NP ehf. with 30.5%, Teno Investments with 24.0% and S. Reynir Harðarson with 10.2%.

2010 - A Bright Future, Or Hubris?

Revenue: $59,183,665 (In 2022 USD: $79,430,951)
Profit: $5,414,758 (In 2022 USD: $7,267,197)

The Company’s revenues in 2010 were USD 59,183,665. The profit for the year amounted to USD 5,414,758. Assets at year-end were USD 83,490,041, with shareholders’ equity of USD 49,770,429, or 59.6%. The Company employed 603 people at year-end in its offices in Reykjavík, Newcastle, Shanghai and Atlanta, compared to 451 at the beginning of the year. Salaries and related expenses amounted to USD 38,190,556, of which USD 16,885,477 were capitalized as development cost.

EVE Online continued growing in 2010, with subscribers reaching almost 360,000. Two successful expansions to the EVE Online universe were launched in 2010 – Tyrannis in the spring, bringing the ability for players to interact with the planets of EVE, and Incursion which started releasing in December and ended its release cycle in January 2011 with the deployment of a new sophisticated character creation system built on CCP’s Carbon technology.

The Company made continued progress in the development of First-Person-Shooter console game DUST 514 where the highlight of the year was an end-to-end playable demo on the Sony PS3 console. Another massive playable milestone was World of Darkness Year One, a first pass at touching on all gameplay features that will be shipped in the final product.

The Company joined together the various fan communities around World of Darkness at the Grand Masquerade fan event in New Orleans in the fall 2010. EVE Online Fanfest, which used to be hosted in the fall, was moved to spring 2011 to change to a cycle where each fan event is hosted yearly, one in spring and one in fall.

Finally, the growth of the Company from a development and employee perspective continued. All four of CCP’s offices grew in 2010 as the company executed its largest talent expansion plan to date.

In December 2009, the Company issued additional equity pursuant to a private placement directed to existing shareholders. The payment for binding subscriptions was payable in two tranches during 2010, the first of which, representing approximately 60% of the proceeds, was funded in Q1 and the remainder was funded towards the end of Q2 and beginning of Q3. After completion of this offering, shareholders owning more than 10% are NP ehf. with 30.5%, Teno Investments with 23.9% and S. Reynir Harðarson with 10.2%.

2011 - The Summer Of Rage

Revenue: $65,264,151 (In 2022 USD: $84,911,376)
Profit: $8,672,471 (In 2022 USD: $11,283,245)

The Company's revenues in 2011 were USD 65,264,151. The profit for the year amounted to USD 8,672,471. Assets at year-end were USD 97,614,885 with shareholders' equity of USD 59,511,731, or 61%. The Company employed 515 people at year-end in its offices in Reykjavík, Newcastle, Shanghai and Atlanta, compared to 603 at the beginning of the year. Salaries and related expenses amounted to USD 45,221,562 of which USD 27,798,365 were capitalized as development cost.

EVE Online ended the year with 351,502 subscribers. Three expansions to the EVE Online universe were launched in 2011. Incursion brought a new age of artistry to video games and gave a glimpse of the potential of the Carbon technology framework. The Incarna 1.0 expansion was the first step to avatar-based gameplay with the introduction of 3D avatars to the sci-fi virtual universe. The third expansion, Crucible, was launched in late 2011 to player acclaim with a large number of much-requested enhancements.

The Company and Sony Computer Entertainment Inc. announced an agreement to bring the innovative DUST 514® video game exclusively to the PlayStation®3 console entertainment system in 2012.

The Company unveiled the results of its technology partnership with NVIDIA at the EVE Online Fanfest event in March. The Company leverages NVIDIA technology to enable its recently launched EVE Online Character Creator.

Customer and market feedback in the second half of the year triggered a review and re-evaluation of the Company's priorities and processes. This led to a reduction of staff affecting twenty percent of global positions, the majority of which impacted our Atlanta, GA office, although a number of positions in our Reykjavik, Iceland office were also affected. The focus was set on enhancing the EVE Online player experience and bringing DUST 514 to market. World of Darkness will continue in development with a dedicated core team.

The Company's Atlanta office announced the relocation of the CCP North America headquarters from Gwinnett County to the City of Decatur in DeKalb County.

2012 - Recovery

Revenue: $65,296,524 (In 2022 USD: $83,231,069)
Profit: $4,713,127 (In 2022 USD: $6,007,649)

The Company's revenues in 2012 were USD 65,296,524. The profit for the year amounted to USD 4,713,127. Assets at year-end were USD 128,316,444, with shareholders' equity of USD 66,641,684, or 51.9%. The Company employed 530 people at year-end in its offices in Reykjavik, Newcastle, Shanghai, Atlanta and San Francisco, compared to 514 at the beginning of the year. Salaries and related expenses amounted to USD 38,775,678 of which USD 18,575,346 were capitalized as development cost.

EVE Online ended the year with approximately 490,000 subscribers. Two expansions to the EVE Online universe were launched in 2012. The Inferno expansion was released on May 22, 2012 and brought a complete overhaul of the war declaration and factional warfare systems, the addition of 17 new modules and 3D models for missile launchers and missiles, along with a mercenary marketplace. Retribution, EVE Online's 17th expansion was released on December 4, 2012 and has been one of the most successful EVE expansions to date. This release most notably introduced improvements to the game's Bounty Hunting and Crimewatch systems. In December 2012 EVE Online was also re-launched in China with a new partner.

In the spring of 2012 the Company held its 9th annual EVE player gathering, Fanfest, in a new location, Reykjavik's new concert hall and conference center, Harpa. At Fanfest, a refocused plan for EVE Online was introduced and orbital bombardment from EVE Online to the Company's upcoming console game DUST 514 was shown publicly for the first time.

The Company opened an office in San Francisco, California that is operated as part of CCP North America, which is headquartered in Atlanta, Georgia.

On July 4, 2012, the Company completed a convertible bond offering in the amount of USD 20 million with a maturity in July 2017. The bonds will be listed on the Nasdaq OMX Fixed Income market in Iceland.

As of December 31, 2012 there were 484 shareholders in the Company compared to 417 at December 31, 2011. Shareholders owning more than 10% are NP ehf with 30.06% and Teno Investments with 23.58%.

2013 - Peak EVE Online

Revenue: $76,721,964 (In 2022 USD: $96,382,879)
Loss: $21,347,476 (In 2022 USD: $26,818,020.44)

The Company's revenues in 2013 were USD 76.7 million. The net loss for the year amounted to USD 21.3 million. Assets at year-end were USD 104.3 million, with shareholders' equity of USD 48.3 million, or 46%. The Company employed 508 people at year-end in its offices in Reykjavík, Newcastle, Shanghai, Atlanta and San Fransisco, compared to 530 at the beginning of the year. Salaries and related expenses amounted to USD 44.7 million of which USD 20.1 million were capitalized as development cost.

EVE Online celebrated its 10th anniversary in May and ended the year with over 500,000 subscribers. That milestone was celebrated when the Company held the 10th annual EVE player gathering, Fanfest, with record number of players and fans in attendance.

During EVE Online's 10th year, it was acquired for Museum of Modern Art's (MoMA) permanent applied design collection in New York City, where EVE Online will be preserved for future generations to experience and study.

During 2013 the Company released its second product, DUST 514, as part of expanding the EVE Universe. DUST 514 is a groundbreaking, free-to-play, massively multiplayer online first-person shooter that is set in the EVE Universe and linked to EVE Online.

During the year the Company also began development of EVE Valkyrie, a multiplayer spaceship dogfighting shooter set in the EVE Universe. EVE Valkyrie was shown at E3 and Gamescom receiving great reviews and winning awards.

The Company completed a reorganization in 2013, which resulted in a greater focus and increased independence of each of our five main projects. Following the reorganization the Company assessed its capitalized development assets and determined that a portion of those assets would need to be derecognized as they would likely not generate future economic benefits.

As of December 31, 2013 there were 431 shareholders in the Company compared to 484 at December 31, 2012. The ten biggest shareholders and their ownership percentage as of year-end are: NP ehf - 29.8%, Teno Investment S.Á.R.L - 23.4%, Sigurður Reynir Harðarson - 9.3%, Hilmar Veigar Pétursson - 5.2%, Matthías Guðmundsson - 3.1%, Meson Holding S.A. - 2.5%, CCP Holding S.Á.R.L. - 2.2%, Guðmundur Kristinsson - 2.1%, Friðrik Örn Haraldsson - 2%, A.C.S. safnreikningur I - 1.7%.

2014 - Death Of A Project

Revenue: $68,557,562 (In 2022 USD: $84,751,424)
Loss: $65,725,333 (In 2022 USD: $81,250,199)

The Company's revenues in 2014 were USD 68.6 million. The net loss for the year amounted to USD 65.7 million. Assets at year-end were USD 33.3 million with negative shareholders' equity of USD 15.3 million. The Company employed 339 people at year-end in its offices in Reykjavík, Newcastle, Shanghai and Atlanta, compared to 508 at the beginning of the year. Salaries and related expenses amounted to USD 36.1 million of which USD 7.9 were capitalized as development cost.

In April the Company announced that it had cancelled further development of its World of Darkness massively multiplayer online (MMO) game project. As a result of this change the Company went through restructuring of its global operations to realign it with its current development efforts.

During EVE Online’s eleventh year the Company announced an upgraded development model for EVE Online. The upgraded development model marks a shift from releasing two expansions per year to around ten releases annually with the aim of delivering more content, more frequently, to its customers.

September marked the release of a full French language support for EVE Online. With an award-winning player-community that spans the globe supporting multiple languages has become an important part of bringing players together. The French localization adds to EVE Online’s previous English, Russian, German, Japanese and Chinese language support.

During the year the Company continued its development of EVE: Valkyrie, a multiplayer spaceship dogfighting shooter set in the EVE Universe, set to be released on next generation VR hardware. The Company also has a number of smaller concept projects under development aimed at making the Company a key content provider for next generation VR hardware.

As of December 31, 2014 there were 434 shareholders in the Company compared to 431 at December 31, 2013. The ten biggest shareholders and their ownership percentage are: NP ehf - 29.74%, Teno Investment S.Á.R.L - 23.33%, Sigurður Reynir Harðarson - 8.86%, Hilmar Veigar Pétursson - 5.22%, Matthías Guðmundsson - 3.08%, Alamina Ltd. - 2.55%, CCP Holding S.Á.R.L. - 2.24%, Guðmundur Kristinsson - 2.09%, Friðrik Örn Haraldsson - 2.01%, A.C.S. safnreikningur I - 1.71%.

2015 - Raising Money

Revenue: $65,703,397 (In 2022 USD: $81,126,786)
Profit: $20,678,818 (In 2022 USD: $25,533,018)

The Company's revenues in 2015 were USD 65.7 million. The net profit for the year amounted to USD 20.8 million. Assets at year-end were USD 79.8 million and a shareholders' equity of USD 35.5 million, equity ratio of 44%, a great improvement from last year-end were it was negative 46%. The Company employed 330 people at year-end in its offices in Reykjavík, Newcastle, Shanghai and Atlanta, compared to 338 at the beginning of the year.

Salaries and related expenses amounted to USD 22.1 million of which USD 7.3 were capitalized as development cost.

In March the Company finalized a refinancing of its senior debt and listed bonds, in total $24 million, with a substantial reduction in financing costs. Subsequently the Company delisted from the Nasdaq OMX in Iceland.

In October the Company sold its World of Darkness intellectual properties to Paradox Interactive. The purchase price was paid in full with cash at the time of signing.

In November the Company raised $30 million in new equity through an issue of a new class of preference shares. New Enterprise Associates led the investment, with participation from private equity firm Novator Partners LLP.

November also saw the release of Gunjack, a visually stunning virtual reality (VR) arcade shooter that is set in the sprawling EVE science fiction universe. This is the third games published by CCP and it has received good reviews from both media and customers.

During the year the Company continued its development of EVE: Valkyrie, a multiplayer spaceship dogfighting shooter set in the EVE Universe, set to be released in 2016. The Company also has a number of smaller concept projects under development aimed at making the Company a key content provider for next generation VR hardware.

As of December 31, 2015 there were 308 shareholders in the Company compared to 434 at December 31, 2014. The ten biggest shareholders and their ownership percentage are: NP ehf - 25.99%, Teno Investment S.Á.R.L - 20.39%, NEA 15 Global VC S.Á.R.L. – 11.35%, NEA 15 CCP LLC - 10.69%, Novator ehf - 7.17%, Hilmar Veigar Pétursson - 4.61%, Alamina Ltd. - 2.23%, Axis Capital Pharma Investment – 2.04%, CCP Holding S.Á.R.L. - 1.96%, Sundagarðar hf – 1.46%.

2016 - Virtual Dreams

Revenue: $79,296,730 (In 2022 USD: $96,691,282)
Profit: $21,397,723 (In 2022 USD: $26,091,533)

The Company's revenues in 2016 were USD 79.3 million. The net profit for the year amounted to USD 21.4 million. Assets at year-end were USD 105.6 million and shareholders' equity of USD 41.7 million. The Company employed 359 people at year-end in its offices in Reykjavík, Newcastle, Shanghai and Atlanta, compared to 303 at the beginning of the year. Salaries and related expenses amounted to USD 22.8 million of which USD 8.0 were capitalized as development cost.

During the year the Company published two major expansions to EVE Online. The Citadel expansion was published in May, giving pilots the opportunity to build staggeringly massive structures and then tear them down with imposing fleets of enormous starships. In November the Ascension expansion was published with the option to play for free and other great improvements to player experiences.

The Company launched EVE Valkyrie, a stunning virtual reality (VR) multiplayer dogfighting shooter, in March on Oculus Rift. EVE Valkyrie was published on PlayStation VR in October and HTC Vive VR in November. This is the fourth game published by CCP and it has received great reviews from both media and customers.

During the year Gunjack, published in November 2015, was released on three new VR platforms and in December Gunjack 2: End of Shift, a sequel to Gunjack, was published exclusively on Google Daydream mobile VR. Both games are developed by CCP's Shanghai studio which has quickly become world renowned as a leader in the creation of quality mobile VR experiences.

The Company also has a number of larger and smaller concept projects in development, aimed at making the Company a key content provider for next generation VR hardware.

As of December 31, 2016 there were 252 shareholders in the Company compared to 308 at December 31, 2015. The ten biggest shareholders and their ownership percentage are: NP ehf - 27.20%, Teno Investment S.Á.R.L - 21.34%, NEA 15 Global VC S.Á.R.L. – 11.87%, NEA 15 CCP LLC - 11.27%, Novator ehf - 8.46%, Hilmar Veigar Pétursson - 6.52%, Alamina Ltd. - 2.33%, Axis Capital Pharma Investment – 2.13%, CCP Holding S.Á.R.L. - 2.05%, NTP II S.Á.R.L. – 1.32%.

2017 - The End Of Virtual Reality

Revenue: $65,418,908 (In 2022 USD: $78,105,297)
Profit: $3,374,608 (In 2022 USD: $4,029,030)

The company's revenue in 2017 amounted to $65.4 million dollars. The profit for the year according to the income statement amounted to $3.4 millions of dollars. Assets at the end of the year were $107.7 million and equity was $45.1 million. Employees of the group, there were 298 at the end of the year in its offices in Reykjavík, Newcastle, Shanghai and Atlanta compared to 360 at the beginning of the year. Salaries and salary-related expenses amounted to 27.9 million dollars, of which were capitalized development wages of $10.1 million.

During the year, the company released one major addition to EVE Online. The Lifeblood add-on was released in October and provides players increased technology for obtaining resources with Upwell Refineries which increases the possibilities for mining on moons and allows players to blast large blocks off the surface of moons, drag them in and use them for lucrative mining. The company also released several smaller additions to EVE Online during the year.

In September, the company released EVE Valkyrie on PlayStation and PC. The game was originally developed in virtual reality and is the first game of its kind that spans the boundaries between reality and virtual reality in different formats game console.

During the year, the company released a new game in virtual reality, Sparc, which is played with specially designed equipment for virtual reality. Sparc is a dynamic sports game in which the player's computer equipment becomes equipment sports and competition in the game.

In addition to the above projects, the company is working on the development of various other projects.

In October 2017, a reorganization took place at the company, the office in Newcastle was sold and an office in Atlanta was closed as of December 31. Following the changes, the company will shift its focus from game development to virtual reality to the further development of games intended for smartphones and PCs.

2018 - Selling Out

Revenue: $56,289,317 (In 2022 USD: $65,602,910)
Loss: $32,704 (In 2022 USD: $38,115)

The company's revenue in December 2018 was 56.3 million dollars. The year's loss according to the income statement amounted to 0.03 millions of dollars. Assets at the end of the year were 81.1 million dollars and equity was 23.5 million dollars. Employees at the end of the year there were 276 of the group's 4 offices in Reykjavik, London, Shanghai and Adanta, to compared to 289 at the beginning of the year. The number of annual works in Iceland was 203.

EVE Online turned 15 in April 2018 and was celebrated with the EVE Online community in EVE Fanfest in Reykjavik in April and EVE Vegas in October had more than ever before.

Last year, CCP made two major improvements to EVE Online. The Into The Abyss sequel was released in May as Abyssal Deadspace was introduced to the game, a hooded, mapped Swedish bar that featured members of the Triglavian Collective. In November, the company released the Onslaught update, which improved player interaction in Abyssal Deadspace as well as new ways for players to travel around within EVE Online.

In September, it was announced that Pear Abyss had bought all shares of CCP ehf. Following the sale, CCP ehf. operated as independent subsidiary of Pearl Abyss Iceland ehf. Partner continues to run a studio in Reykjavik, London and China.

2019 - The Chaos Era

Note: With the sale of CCP to Pearl Abyss in October 2018, Pearl Abyss Iceland took over the ownership of the CCP group of companies. From this point going forward, the revenue and profit/loss figures will come from PAI's consolidated financial reports.

Also of note. Pearl Abyss owns all shares of Pearl Abyss Iceland. All shares of CCP ehf are owned by Pearl Abyss Iceland.

Revenue: $51,116,248 (In 2022 USD: $60,349,311)
Profit: $13,552,116 (In 2022 USD: $15,513,342)

Pearl Abyss Iceland ehf. is a holding company founded in 2018. In October 2018, the company bought all issued and outstanding shares in CCP ehf. CCP ehf. designs, develops, markets and operates video games. Headquarters are on Iceland, but the company owns and operates subsidiaries in the United States, Great Britain and China.

The group's income in 2019 amounted to 51.1 million dollars. The profit for the year according to the profit and loss account amounted to 13.5 million dollars, Assets at the end of the year were 291.2 million dollars and equity 203.4 million dollars. Employees the group had 188 at the end of the year compared to 203 at the beginning of the year.

In 2019, the group decided to take the EVE Fanfest events on a world tour as the EVE Invasion World Tour, sen consisted of a series of events held by the group around the world and from EVE Online thus closer its global community than ever before.

In March 2019, the group announces its partnership with the start-up company Hadean around "EVE: Aether Wars" which is revolutionary technology that addresses opportunities for more massive multiplayer in current and upcoming games of the group. The technology focuses on solving technical challenges faced by manufacturers in the crowd online multiplayer environment. EVE: Aether Wars was officially announced for the first time at the GDC 2019 show with real-time battles where 14,274 users were simultaneously connected to the same game world.

In early May 2019, the group introduced "Invasion", a massive addition to EVE Online that drew the mysterious The Triglavian race came into the limelight for the first time. At the G-Star 2019 show held in November in Busan, South Korea, the group introduced a Korean translation of EVE Online to provide better access for Korean-speaking players to important aspects of the game. During the year, the group further strengthened the gameplay of EVE Online with releases that upgrade various ships and units to ensure that combat choices and tactical decisions still play an equally important role IN the game and spaceships and their equipment. A new 64-bit version of the game was released, ensuring that EVE Online is included modern requirements of operating systems and hardware used by players.

In July 2019, the group released the first major update to Sparc, a v-spot game like no other invirtual reality games.

From August to September, the group together with Nctlasc Games held closed alpha tests in certain parts of the world for EVE Echoes, a next-generation multiplayer game for mobile and tablet. He relies on game design of EVE Online and will be released on 108 and Android in 2020. The group and NetEase then held open beta testing in December.

2020 - COVID

Revenue: $62,375,926 (In 2022 USD: $70,532,653)
Loss: $1,665,391 (In 2022 USD: $1,883,169)

The Group's revenues in 2020 were USD 62.4 million compaired to USD 48.4 million in previous year. The net loss for the year amounted to USD 1.7 million compaired to a net profit of USD 13.6 million in previous year. Assets at year-end were USD 300.6 million and shareholders' equity of USD 202 million. The Group employed 301 people at year-end compared to 279 at the beginning of the year.

In 2020, the Group began the year with a major announcement for EVE Online. In January, the Group revealed that it would be moving away from releasing twice-yearly expansions for the game and instead split EVE Online’s content release schedule for the year into four sections - Quadrants - that allow for releases, events, offers, and more with more regular cadence throughout the year.

In March, the Group was pleased to announce that EVE Online had been authorized to operate in the People’s Republic of China, in partnership with publisher and distributor NetEase Games. The game went into Open Beta soon after, enabling millions of new and returning Chinese capsuleers to take flight and chart their paths across the stars.

In June, the Group launched the third phase of Project Discovery in conjunction with Massively Multiplayer Online Science (MMOS), the groundbreaking citizen science project and mini-game found within EVE Online, embarking on a major program to understand the immune system's response to COVID-19. EVE players are now able to contribute to the fight against COVID-19 by analyzing. Within three months, Project Discovery participants had provided an astounding 41.4 million submissions for use in scientific research.

August was a big month for the EVE IP, with the release of EVE Echoes on iOS and Android after three years of close collaboration between the Group and NetEase. Launching in English, Russian, Chinese, German, French, Spanish and Portuguese, EVE Echoes enables sci-fi enthusiasts all over the world to enjoy the hallmark game experience of EVE Online on their mobile devices.

The Group rounded off the year in December with the launch of full Japanese language localization for the EVE Online client and across its web presences, including full customer support for the Japanese-speaking EVE Online community.

Note: The below paragraph came from CCP's financial statement, not PAI's.

In 2020 the Icelandic Government announced its Science and Technology Policy for 2020-2022 aimed at strengthening the framework around research, development and innovation in Iceland by ensuring that it is internationally competitive and to create conditions where knowledge-based companies can thrive and grow and attract talent from other countries. One of the first steps was to increase available refunds through government grants. This is an encouraging step that will help CCP continue to grow in Iceland and create new opportunities for innovation.

2021 - Adding Platforms

Revenue: $63,869,894 (In 2022 USD: $68,981,229)
Loss: $8,044,016 (In 2022 USD: $8,687,756)

The Group's revenues in 2021 were USD 63.9 million compaired to USD 62.4 million in previous year. The net loss for the year amounted to USD 8.0 million compaired to a net loss of USD 1.7 million in previous year. Assets at year-end were USD 289.8 million, shareholders' equity of USD 194.1 million and equity ratio 67%. The Group employed 301 people at year-end compared to 301 at the beginning of the year.

During 2021 the Group released four quarterly expansions for EVE Online introducing many updates and improvements for an elevated player experience including visual updates, rebuild of the player guide and a revamped skill system. In June the Group officially launched EVE Academy, a resource website designed to assist new players to forge their own path in EVE Online after completing the game’s tutorial. Then in September the Group released a revamped onboarding experience for new players that teaches the essential features and controls of EVE Online, leaving them with a solid understanding of how to thrive amongst the stars.

In the last quarter of 2021, the Group introduced a whole new generation of players to EVE Online with the launch of the game on the Epic Games Store as well as releasing a native Mac client harnessing Apple’s powerful graphic processing framework.

In February EVE players again broke a GUINNESS WORLD RECORD with an enormous battle that saw more than 5,000 players duke it out for territorial control in EVE Online resulting in over 3,400 ships lost in battle equating to more than $378,000 in losses. The previous record was also set by EVE Online in 2014.

In August the mobile game EVE Echoes, developed by NetEase in close collaboration with the Group, was officially released in the People's Republic of China following a successful release in the rest of the world in 2020.

2022 - Reopening to the World

Revenue: $56,105,616
Loss: $70,123,533

The Group's revenues in 2022 were USD 56.1 million compaired to USD 63.9 millions in the previous year. The net loss for the year amounted to USD 70.1 million compaired to a net loss of USD 8.0 millions in the previous year.

The main reason for the loss is impairment loss of $50.9 million on intangible assets as a result higher interest rates and lower forcasted annual growth rate compared to prior years. Assets at year-end were USD 231.5 millions, shareholders' equity of USD 127.9 millions and equity ratio 55%. The Group employed 366 people at year-end compared to 350 at the beginning of the year.

During 2022 the Group released ‘Uprising,’ a major expansion for EVE Online introducing many updates and improvements across EVE Online, including a Spanish localization enabling speakers of the second largest language worldwide to experience EVE Online in their native language.

In January, the Group and BBC Studios joined forces for EVE Online x Doctor Who, an original crossover event between the beloved action-adventure series Doctor Who and EVE Online. EVE Fanfest was held in May in Reykjavík, Iceland, for the first time since the COVID-19 pandemic. At the same time the Group launched EVE Anywhere, a cloud-based platform based on Intel technology which enables players to enjoy EVE Online through a web browser on any computer.

In July, the Group, together with its partner NetEase, announced EVE Infinity, a localized version of EVE Online for the Chinese market run on a separate server cluster. The game was successfully launched in September 2022.

To celebrate the 2nd anniversary of EVE Echoes, NetEase Games in collaboration with the Group released a new expansion for the game in August. This was the biggest expansion for the game to date.

Following Russia's invasion of Ukraine and related sanctions enforced on Russia, all sales to Russia based players were halted in March. The negative impact of the war in Ukraine on the Group's operations in 2022 is estimated at USD 806 thousand.

In March 2023, the Group announced that a USD 40 million financing had been secured from external parties for a full-scale development of a new AAA title utilizing blockchain technology, set within the EVE Universe. With key game systems developed on-chain, this new project will also leverage smart-contract blockchain technology, focusing on persistence, composability and truly open third-party development to create a new relationship between virtual worlds and players.