Cloud Imperium Games has taken heat the last few days for moving the goalpost on Lifetime Insurance (LTI) once again. The small, vocal percentage of the fan base that helped grow Star Citizen into the large project it is today has been in an uproar. But that vocal minority, the ones who created the discussions that perpetuated Star Citizen’s success, is becoming an increasingly smaller percentage of Cloud Imperium’s sales base, and CIG is now clear of a financial obligation to appease their backers. Their moral obligation is up for debate.

I’ll be honest: I agonized over releasing this article. These are murky, passionately contended waters, and by wading in I risk my working relationship with Cloud Imperium as a content creator. As a disclaimer, the points I bring up are in no way intended as a personal reflection on Chris Roberts or any of the talented individuals employed by CIG, or my continuing devotion to and passion for this game and community. Rather, it is commentary on the way businesses operate as an independent whole. And it is not about LTI, but how people react to it. (And if any readers of this work for CIG, I hope you take it to heart that I believe you are doing your level best to work hard and do right by the customer. Even so, a larger difficult conversation needs having.)

The case takes a history lesson as much as a summary to understand. Lifetime Insurance, which grants holders of Star Citizen’s sometimes multi-hundred (if not thousand) dollar starships protection from ever being lost permanently through destruction, was originally intended as a limited time reward for early backers of the game to help generate sales.

After a period it was taken away, with assurances that LTI was non important, and essentially a collector’s sticker. Insurance, according to CIG, will be trivially cheap to buy with your hard earned (or purchased) in game currency. At backer request it was later reintroduced for all who pre-order design concepts of new ships before they are ready to play; essentially, a pre-order within a pre-order.

Chris pledges “To put fun ahead of shareholder profits.”

But with the latest sale of the 100i and expensive Hercules lines of ships, LTI has become a reward exclusive to backers investing new money in the game, rather than trading in old pledges for store credit. Which leads one to wonder: if LTI is not important, why is a coveted feature being taken from those who have already pledged money in a still unreleased game? Are older backers now, in effect, lesser?

It’s easy to guess at the motivations for the change. Generating new funds for the game is important, and LTI was seen (rightly) as a powerful sales carrot to dangle. The rising backer sentiment that those who invested early and have been waiting patiently from delay to delay over the years are now treated as stale money was either not foreseen, or more unfortunately, calculated to be outweighed by the benefit of encouraging sales to newcomers and a growing pool of “whale” big spenders. Feelings are hurt. Words are being said. As always, Reddit is a warzone.

A good deal of this anger is rooted in “The Pledge” — a one page letter from Chris Roberts explaining the ways Star Citizen would respect and represent their customers beyond how a big publisher might treat them. In it, Chris pledges “To put fun ahead of shareholder profits.” And as pretty as that sounds, the ongoing nature of that decision can only be made by those investors who own a majority stake in Star Citizen’s operations. While CIG has been quiet about whether private equity holders exist, a kickstarter era interview seems to confirm it— and should investors exist, they would expect a growing return on a very delayed product.

Over the years I have seen many companies, in many industries, begin to prioritize sales over customers as they grow. I’m sure you have too. In the games industry, it’s been a sore spot for years. EA, Valve, Bungie, Ubisoft, Take Two properties, Bethesda, Twitch itself, are all on different stages of the path towards sales team dominance. And yet, no one individual in any of those companies is out to screw the customer. But gamers get angry. We take it personally. We feel like these companies are our friends, or should be. We grew up with their titles, and in thanks for our loyalty, we feel they’ve stopped saying hello and started going straight for the wallet.

It’s sunken cost fallacy monetized to an incredibly clever degree, and no apology is needed for that.

It’s worth noting that the CIG of the kickstarter — Chris Roberts, a dozen people, and a dream — is not the CIG of today. There are five development studios and hundreds of employees globally. People have been hired, fired, acquired, moved and shaken. This isn’t a bad thing. It’s enabled the infrastructure that is turning Star Citizen into not just a dream of the most ambitious game ever, but the real deal, and one now visibly on track to near future completion.

Cloud Imperium has made a series of shrewd business moves to enable their unprecedented success, and the ability to refund a pledge for store credit — melting, as we Citizens call it — was not least among them. It was backer beneficial, but also incredibly effective at encouraging just a few dollars more of spending.

You may find the following situation familiar. A new ship comes out that matches your gameplay style way more than the two small ships you have from early development. Melt those suckers down, and you can cover most of the cost of the new ship. What’s $20 more? But then there’s that next ship a few months later. You rinse and repeat a few years, and it’s easy to see how passionate backers can balloon from that first $60 into the thousands. It’s sunken cost fallacy monetized to an incredibly clever degree, and no apology is needed for that. It’s up to individuals to control their spending. To borrow a quote, “It’s not personal, it’s strictly business.” And at least the game’s return value keeps increasing in kind.

Even so, it’s difficult to dismiss that the new Warbond Only LTI is a textbook definition of an anti-consumer move, and it certainly isn’t the first step in that direction. Warbonds, the term for cheaper ship SKUs that cannot be purchased with store credit, have become a case study in devaluing old money.

…Why sink development costs into something 100 people will buy when the profit from minimizing the expense of one purchase is so much greater?

Using past purchases (a definition which includes giftcards) often covers only 85% the cost of a new ship compared to pulling out your wallet, presented as a roughly 15% discount on Warbonds. Now, with the case of the A2 Hercules gunship, there is the addition of the free Tumbril tank — a $100 value on it’s own, bringing your previously spent pre-order money down to 75% value, on top of missing out on Lifetime Insurance, a feature many backers consider a point of pride.

You can see the appeal. Marketers have been writing this book for decades. Isn’t it so much more pleasant to think about as a nice discount, with LTI and a free tank thrown in?

Backers have not let this go unnoticed, and in my estimation, nor should they. This same tactic, which depends on the sales of the few outweighing the discontent of the many, are what have led to gross cost inflation in other video games for years.

Consider Rockstar: In 2009, a $40 microtransaction in Grand Theft Auto IV would get you two complete multi-mission story expansions with new characters, voice acting, weapons, and vehicles. By 2015, a $40 microtransaction in Grand Theft Auto V would give you the purchasing power for one car. Sure, it angered fans — but why sink development costs into something 100 people will buy when the profit from minimizing the expense of one person’s purchase is so much greater? Customers voting with their wallets can be ignored.

The danger comes from ignoring small pushes along the way as companies hedge their bets on how far customers will bend before they break. Most recently, EA finally achieved that devaluation breaking point with Battlefront 2, whose $20 lootcrates gave only a distantly remote chance of unlocking the new characters they promoted, and were incredibly difficult to earn in game. After extreme backlash, EA rolled it back — but not out of the kindness of their hearts. They had pushed the profit margin as high as they could, and could now comfortably set it just below that marker, confident in their market research.

It should come as no surprise that many feel “The Pledge” has been skirted, if not ignored.

Cloud Imperium has not nearly approached this level of customer squeeze yet, but the move marks a keen understanding of maximizing backer spending, and left uncontested these devaluations might be a sign of things to come. The laws of business would predict it, and only Chris has the power to ensure the pledge is upheld, and only so far as the game’s investors allow.

As for the argument that Cloud Imperium is justified in devaluing the purchasing power of old pledges as the game’s ongoing development is still in need of finances, I’m not sure I buy it without knowing what CIG’s margins are. For me, a question is begged: is the near $200 million of steady backer funding predicated on a respectful way of doing business not enough? And if not, why is CIG of all companies so cash strapped that a sales decision must be made that would be known to upset a sizable portion of of Star Citizen’s active backers? The decision to open 5 studios was on them. It should come as no surprise that many feel “The Pledge” has been skirted, if not ignored.

These aren’t pleasant subjects, but they are worth considering and entirely reasonable to air publicly. At the end of the day, the only people who can determine when anti-consumer decisions cross the line are the backers themselves. And to reiterate: I do not think this devaluation is malicious in spirit, or a poor reflection on the morals any of the individually talented people at CIG — it’s just the natural, if not inevitable, flow of every day business.

For my part, I say debate on. As much as I passionately love and believe in the game, community, and people working at CIG including Chris, I would prefer if my dollars invested in the game are just as valuable as a newcomer’s the entire duration of the pre-order period. (Yes, pre-order — not pledge. Not this far along.)

Should the backers take devaluation in stride, let us hope that like with so many other companies our personal love for the people and game do not lead to a bad deal.

After all, Cloud Imperium itself is just a company, and for a company this subject isn’t personal. For a company, it’s strictly business.

Matt Anderson
BadNewsBaron

http://twitch.tv/badnewsbaron
http://twitter.com/badnewsbaron

For more on how Star Citizen’s ongoing development affects content creators, and a solid dose of positivity that I happily maintain, check out my previous article.

Being a Twitch streamer you learn to roll with the punches. Game delays, unstable builds, seasonal audience swings and changes to the platforms you create on are largely forces of nature. In this scenario, being a Twitch streamer focused on Star Citizen is like living at the foot of an active volcano. When things go south, how much can you complain when you’re knowingly putting yourself in the path of instability?

I have been creating Star Citizen content on Twitch for over three years — since June of 2014. That is to say, I play the game, discuss production using a camera and microphone, and people watch live while I do my best to entertain them. The initial hype of the first playable releases of Star Citizen’s Arena Commander game mode quickly swept me from my first live Twitch broadcasts with no game industry connections into a career of full time streaming within a short few months. Outside of Cloud Imperium Games, I’m one of a very small subset of people who can say that Star Citizen is their every day job. I play other games besides Star Citizen — space and scifi games have become my niche, and I’ve had opportunity to work with developers, peripheral companies, and publishers of all types— but, by and large, it is the Star Citizen community that keeps my business as an entertainer alive.

This puts me in a precarious place in a career field that is already known for being unforgiving and unpredictable. Star Citizen — the largest crowd funded indie game of all time, and arguably the largest game ever conceived — has become infamous for its open and struggling development. Months long content delays are par for the course. Tomorrow means next week. Next week means next quarter. Next quarter means next year, and that’s if you’re lucky.

Most large streamers I’ve talked to at Twitch events dismiss it as a game that will never be released.

As a fan, I can do a mental check when there are delays and remind myself that the pains they bring are only accentuated because every aspect of Star Citizen’s alpha development is open for the public to see where most developers would be keeping their work in house until it was more polished. As a content creator whose livelihood depends on those updates, however, the delays can be absolutely maddening. No updates means no fresh content, means no viewers, means no income. A lot of my peers have come and gone along the way. It’s a rough road that I’ve been lucky enough to navigate, even if I’ve had to limp much of it with the expectation of keeping a smile.

Star Citizen discussion is largely met with skepticism among streamers and youtubers outside of Chris Roberts’ fandom, and for good reason: outwardly, development looks like a disaster. The mainstream news that gets around is generally bad news. CIG’s live presentations are troubled at best and embarrassments at worst. Poor framerates, crashes, and buggy builds stand out as crippling even in the age of early access game titles. Most large streamers I’ve talked to at Twitch events dismiss it as a game that will never be released. And yet, I’m still hinging my career on it, when I could stop working for tips and return to the comfortable, safe marketing career I surrendered when I decided to chase this dream — a career where I never had to worry about whether I would be able to pay next month’s rent, or make hard choices about which bills would need to go on credit. I can’t complain — it’s the path I chose.

But why? What the hell am I thinking?

Before we get to that, let’s put the horror in perspective. There’s an inconvenient truth that’s usually left out when it comes to the ‘Star Citizen Will Never Release’ articles you see Wired, Kotaku, and others push for clicks. (Don’t hate them for it — games journalists are struggling these days.)

Fallout 4 took 7 years to develop, using pre-existing engines and assets. The release was lackluster, buggy, and without innovation. Starcraft 2 took 7 years. Morrowind took 6 years, Dragon Age: Origins 5 years, Alan Wake 6 years, Star Trek Online 6 years. All of these from existing, established development studios with years of operating experience.

As consumers we have been conditioned, in a way, to think that game gestation is relatively short.

Star Citizen’s first assets were developed in 2011 as a proof of concept for the kickstarter campaign, which went live in 2012. In the 5 years since, Cloud Imperium Games has gone from a small team of less than a dozen people headed by Chris Roberts, to 4 large international game studios employing well over 400 people at last count. Cryengine has been pulled apart and rebuilt into something far from anything CryTek ever achieved. New networking and physics technologies have been invented in house from scratch that are already informing the work of other major developers.

Rather than one game, two AAA titles are being developed simultaneously. Squadron 42 stands to become one of the largest stories expressed in any medium, with over 1,200 pages of dialogue acted out by Hollywood royalty such as Mark Hamill, Gary Oldman, Gillian Anderson, John Rhys-Davies, and Andy Serkis. (A movie, in comparison, typically has 90 pages — 1 page for every minute). From a business logistics standpoint alone, the progress that has happened in 5 years is mind boggling. Technologically, and without the context of increasing scope and business growth, development progress has been about par with the big studios.

So what’s the big deal? Why is everyone worried when things are, by game industry standards, going about par for the course?

These days games are released in a couple of ways. AAA games are usually announced a few months to a year before they are ready for distribution. Internal employee churn, failed builds, technological hurdles, and constantly redesigned assets are hidden from outsiders. As consumers we have been conditioned, in a way, to think that game gestation is relatively short. The first gameplay we see has been in development for years already. Or, in the case of early access titles, the scope of the game (either technologically or in production value) is low enough that turnaround time from initial backing to the first reasonably play ready builds is quick enough to hold attention.

That part is the psychology of the industry. There’s no changing it. We want it and we want it now. But, it’s only half of Star Citizen’s problem. The other side of the coin is that Cloud Imperium Games is terrible at holding a date.

Chris Roberts is, fundamentally, incapable of compromising his belief that every aspect of development should be transparent.

I should say CIG is a company with the best intentions. I say this as someone who, in the course of my work, has had opportunity to get to know some of the staff in various offices and has gotten to peek behind the curtain a fair few times. The assets they show the public, let alone those that are playable, are only a small fraction of what they have completed in house at any given time. Where one aspect of the game seems to be in development hell, another aspect in another studio might be ahead of schedule. It’s a development hydra.

For my part, I know just enough to not worry about the game releasing. They’ll do it, and I can say that with confidence. They might piss off everyone in the process, but they’ll get the thing done. If I didn’t truly believe that there’s strong potential for a steady career as a content creator when the game is released I wouldn’t be wasting years of my life chasing down live streaming as a career path. Perspective: I started engaging the Star Citizen community when I was 25. By my estimates, I might be 32 when the game releases. Even now, a couple of outwardly incredible appearing months of income around holiday season updates are tempered by months upon months of below minimum wage work. I am fully cognizant of the risk I’m taking. It’s a luxury I can afford to take — at this stage of my life, I have no dependents.

Where CIG gets into trouble is their habit of routinely overpromising and underdelivering with their updates. This isn’t intentionally malicious behavior — there is an unbridled enthusiasm and optimism at the management level that, while sometimes endearing, is terrible for PR. Every time a date for an update is given, they 100% believe they’ll hit that date. And then the date goes by. So they change it up, maybe alter the way they present their schedule. And then that falls down too. It often feels like the only thing CIG is ever on time for is another fundraising opportunity. But here’s the truth of the matter: Chris Roberts is, fundamentally, incapable of compromising his belief that every aspect of development should be transparent. Everything is put out there on full display, including the failures. And yet, we can’t say it’s bad for business, because it’s that very quality that may be driving the game’s absurdly successful funding despite complications.

It’s no secret that eccentrics often make the best leaders, even if they need others to reign them in. Chris Roberts has that special Elon Musk kind of crazy. Chris’ vision and track record with the beloved Wing Commander series of games brought the classic space sim fans, now financially independent and with disposable income to back projects they believe in. (I’ve been lucky enough to be one of those fan funded projects.) As the game blew past funding goals and milestones, the scope of the title has evolved and shifted into something nearly unrecognizable from the original kickstarter pitch. No, it is not the game original backers pledged for. It’s now, for better or worse, the single largest technological and creative endeavor the video game industry has ever seen.

When people ask if they should buy the game, I tell them not yet. It isn’t a game yet.

People fund because, despite everything, Star Citizen represents the childhood dream of living in a fantastic sci-fi world like Star Wars. We may never touch the stars as adventurers, mercenaries, and explorers with our own spaceships, but Star Citizen may be the closest many of us ever come to living out those fantasies. Appeal and worth of childhood dreams cannot be quantified. While Star Citizen and Squadron 42 can be purchased bundled for $60 — the market average AAA game price — the ability to throw more money into development is there for those who want it. And many do. Who are we to say that the people who put in thousands — even tens of thousands — into the game’s development shouldn’t be allowed to? It’s their money, and their responsibility to manage it. While outsiders balk at the big figures some people put in, the truth is that they will, in the end, be playing the same game as those who bought in at the most basic level, and have access to all the same content. They get nothing more, and nothing less.

I’m one of those crazy people who invested in the dream. I grew up swinging a PVC pipe lightsaber and sitting in rapture watching NASA rocket launches. Dune and Ender’s Game were my sacred texts. The sci-fi section of Half Priced Books was my church. The first games I played were space simulators — and the hours I spent in middle school sneaking onto my computer in the middle of the night to play TIE Fighter, straining to hear my parents’ footsteps outside my room, came rushing back when I first saw Star Citizen. It was, and is, the revival of a genre largely dead for over a decade. Of course I was in all the way. I still am.

I like to think of myself as a realist when it comes to Star Citizen’s development. There’s a spectrum of rationale. CIG isn’t perfect. There are serious, legitimately concerning issues with management and PR that need to be sorted out if they want to be taken seriously by the general public, many of which can be infuriating and insulting to backers. (I write this on the eve of a major Holiday presentation, advertised even with specials on IGN, being unexpectedly pushed 24 hours at the last minute, disrupting mine and many others planned days.) At the same time, I can see past the fear mongering of those who, for one reason or another, are personally invested in the game’s failure. Reality is often somewhere in the middle of two extremes, and I tend not to pay mind to those whose entire identities revolve around the failures of others. So, you know, like half the internet, and bitter industry washouts.

It is the Star Citizen community that allows me to chase my dreams of being an entertainer. It’s them I owe, even if it means criticizing CIG…

As a well known content creator in the Star Citizen community, I am something of an unofficial community ambassador. I recognize that. Thousands of people over the last three years have seen Star Citizen for the first time through my daily show. Many have become backers. But my job as a content creator is not to sell them on the game, or to please CIG. There’s no line I have to toe, no check they cut me, no special relationship with corporate. My only duty is to the audience that supports me. Part of that responsibility is managing expectations of those invested or thinking of investing. I take it very seriously. When people ask if they should buy the game, I tell them not yet. It isn’t a game yet. Come back later, when the game is further along. They should only back if, like me, they can’t stop thinking about the possibilities of what could be; if what the game represents keeps itching their mind, and if they don’t mind sinking money into a game they might not play for another couple of years, or more.

The reality, like it or not, is that the game is funded. It’s happening. It is progressing. Nothing will change that at this point — not even big scary headlines about the latest setback. Now it’s a matter of managing noise and expectations.

Star Citizen isn’t the Jesus Game some think it is. Nor is it a scammy cash grab as others like to insist. It’s a passion project that attracts the same people to work on it as those who want to back it: people who believe in the vision.

Personally, I believe. Not just in the game. For whatever reason, the people who are attracted to the Star Citizen community are some of the most gracious, generous, and genuine gamers I have ever had the pleasure of meeting.

Good or bad, at the end of the day Star Citizen is just a game. And truth be told, as a content creator I owe Cloud Imperium Games nothing. It is the Star Citizen community that allows me to chase my dreams of being an entertainer. It’s them I owe, even if it means criticizing CIG when deserved, and I will continue to invest my time into them for as long as they allow me to do so.

Besides, if I stop now I’ll always wonder what if.

Matt Anderson
BadNewsBaron

http://twitch.tv/badnewsbaron
http://twitter.com/badnewsbaron