COMMUNITY - FORUMS - GENERAL DISCUSSION
SBS finances and possible funding?
+7

Before we start, I would like to state that this question is not aimed at attacking SBS, but more at bringing confidence in their... "shareholders" if you wish. I think that before SBS can convince people to put their money back into the game, they do need to prove that they are looking for an outside source of cash flow. Moreover, the question might be more geared toward SBS employees (if you know the answer though, feel free to answer). It's more of a financial question. Personally, I didn't put a lot of money into the game, but I do plan on doing so if I can receive an honest answer.


A bit of background:

As a CTO in a small Canadian tech company which just got funded, I've come to know how much employees, technologies, infrastructure and especially lawyers can become expensive. After going through the process and seeing how much our small goals cost a lot (even though we're being extremely cost-effective), I'm getting less and less confidence in the game being launched with the current amount accumulated showed in the store. Furthermore, compared to our small goals, the gargantuan endeavours SBS is trying to achieve (solid all-around AI, large scale battles, personal story, etc.) seems extremely expensive to develop (switching from one expensive technology to another cheaper one might just mean more cost in terms of employees' salaries). Five million seems like a lot of money, but for a tech company, it's extremely small.


So my question is:

Seeing that the small amount of money might not be enough to achieve their large roadmap, is SBS thinking about acquiring funding via VCs or using a publisher to release the game? I know that they looked into the getting published by a larger company a long time ago, but I was wandering if this was back on the table since money might become short eventually? My question does not aim at taking a hit to SBS, but more at understanding their plan in terms of finances, before I put my money back into the game.

Thanks!

[EDIT 1] I obviously know people who buy a game are not shareholders. I try to make a parallel between an IPO being forced to give financial statements to their shareholders as much as SBS should also keep their community in the loop when it comes to finances and how they plan on keeping the production afloat.


3/14/2019 9:32:15 PM #1
+0

Hmm, my only contention with this is referring to backers as "shareholders"

Whether you got a $45 pledge package, or a $10,000 we aren't really shareholders and something like finances wouldn't be something we are entitled to know more about.

Not to make it sound like I disapprove of your question, definitely a +1 from me. I can't possibly know if it's in SbS's best interests to tell us behind the scenes things like this, but I hope if answering this question is appropriate you do in fact get an answer to this :D


3/14/2019 9:40:23 PM #2
+0

Posted By Labbe at 5:32 PM - Thu Mar 14 2019

Hmm, my only contention with this is referring to backers as "shareholders"

The quotation marks were meant to mean it as a joke. I obviously know people who buy a game are not shareholders. I try to make a parallel between an IPO being forced to give financial statements to their shareholders as much as SBS should also keep their community in the loop when it comes to finances and how they plan on keeping the production afloat.


3/14/2019 9:41:29 PM #3
+8

This is a fairly common question around here. Since you're on discord, you may have already seen Caspian address some of this publicly, but in case you haven't:

Caspian ☁12/27/2018
@Priestess Regarding revenue, Soulbound Studios is doing great. We're growing the team again and have a few positions open now and will have a few more early next year. We still plan to look for investors in 2019, but our need to do so is less than before. The community has done a great job crowd-funding the game for us and we've demonstrated we can continue development for a long time just on promotions.

Our desire to seek investors at this point is mostly so we can scale the company larger to handle the additional demands that will arise from things like Alpha/Beta Testing, etc. I'd like to get a larger support/outreach team, we'd like a few other technical designers, and some additional programmers. But in general, we're doing really well.


Caspian ☁12/27/2018
@Duffy de Concierge |⍲| We've looked at it. I talked with Gordon about his experiences and based on that have kept it as a possibility. It would allow us to raise up to $1M a year in micro-investments. There's quite a bit of overheard in doing it that way, however, as we take on a lot of the burdens of being a publicly traded company without many of the benefits.

We'll pursue Reg-D private investor funding before a Reg-CF investment campaign. But it's not out of the question. Let me put it this way, it comes ahead of publishers. :smiley:

You may have the opportunity get more insight from Caspian on discord, when he's around, or via the next Q&A. I think there will be one open to the entire community soon.


3/14/2019 9:45:02 PM #4
+2

This is a fairly common question around here. Since you're on discord, you may have already seen Caspian address some of this publicly, but in case you haven't: [...]

Great! Thanks for the answer. Didn't saw it. Even though I would like more specifics, I don't think I will ever get anything more specific than this. It's reassuring, but not convincing.


3/14/2019 10:39:26 PM #5
+1

Posted By Lord_Krieg at 10:45 AM - Fri Mar 15 2019

This is a fairly common question around here. Since you're on discord, you may have already seen Caspian address some of this publicly, but in case you haven't: [...]

Great! Thanks for the answer. Didn't saw it. Even though I would like more specifics, I don't think I will ever get anything more specific than this. It's reassuring, but not convincing.

Not convincing at all but I'm still excited for the game none the less.


3/14/2019 10:49:39 PM #6
+1

Once again thanks for sharing the financial info covered on Discord, very helpful.

Caspian was actually pretty forthright in his comments, and there is usually never any upside to revealing more about funding or financials so not unexpected few details will be shared.


You must all be quick to listen, slow to speak and slow to get angry. JAMES 1:19 NLT

3/14/2019 11:01:00 PM #7
+7

Posted By Lord_Krieg at


So my question is:

Seeing that the small amount of money might not be enough to achieve their large roadmap, is SBS thinking about acquiring funding via VCs or using a publisher to release the game? I know that they looked into the getting published by a larger company a long time ago, but I was wandering if this was back on the table since money might become short eventually? My question does not aim at taking a hit to SBS, but more at understanding their plan in terms of finances, before I put my money back into the game.

Thanks!

Background: I, like you, am a backer and not an employee of SBS, and I also work in the software industry and am well aware of the costs of large scale software development.

SBS has never claimed that the amount of capital raised so far is sufficient to fund the full development effort. What they have said is that it is enough to comfortably fund their current work with a reasonable buffer into the future. Each day/week/month/year that they remain independent, makes the likelihood of the game being built along the lines of their original vision higher, and so they would like to remain independent for long as possible. Additionally it puts them in a better position to approach investors or publishers, if and when they are ready.

The rate of crowd-funding investment by the player base has continued to be strong. For reference, they passed the $5M mark in late November, so they have raised another $660K in the last 4 months. That translates into almost $2M a year of additional funding. Obviously there is no guarantee that this revenue rate will continue indefinitely, but as long as they continue to make progress and expand the number of interested potential players, there is a reasonable chance that crowd funding will continue to help lengthen their runway.

SBS shows little sign at the moment of financial hardship, in particular, they have been talking about how they are recruiting new staff from the various layoffs in the gaming industry in Seattle.

It seems (again from the outside but as someone who has sought VC funding for software companies) highly probable that SBS would be able to attract funding at this point if they desired to make the tradeoff in control. If they required or desired the additional funding, I would be pretty shocked if they didn't reach out to get that funding. If the alternative is stopping on the project that they have invested the last N years of their lives in, or giving up some control, I am pretty sure which one would be picked.

Personally I take it as a really good sign that they have lasted this long as an independent game studio without needing to call upon an outside source and taking on all of the other things that come with that. I hope they continue in this manner until they are much closer to Release Day.

Thus I have chosen to put my money in now, in hopes of making that a reality, but I think everyone understands that funding this game is a matter of personal choice, subject to your level of disposable income, your degree of risk aversion, and your level of patience.


Countess DeBrume, Misthold Keep, Free Kingdom of Alesia (NA-E)

3/15/2019 7:14:14 AM #8
+4

IMHO, going public is the modern way to sell one's soul to the devil. From the time it happens, a company's primary concern ceases being its products or its customers, and becomes its stockholders. For stockholders in general, money is the measure of all things. So, although it might be necessary for SBS to go public some day, I hope it only happens after CoE has become a satisfying playable reality. If it happens before that, I fear that additional development will be short-shrifted in favor of maximizing cash flow.


3/15/2019 11:50:50 AM #9
+8

Caspian said on Discord that he had a huge meeting/event yesterday and that he couldn't talk about it but that it went very well. He said there are still a few more weeks of work needed but it looks very positive. He also said that it was the most significant thing he's done for the company in a long time.

That to me at least seems a really strong hint that he is negotiating funding from an investor or publisher or something along those lines.


3/15/2019 12:20:26 PM #10
+1

Posted By Calidor at 10:50 PM - Fri Mar 15 2019

That to me at least seems a really strong hint that he is negotiating funding from an investor or publisher or something along those lines.

Though I would love for them to get some investor/publisher on board. Would make me nervous about what shit would be added in as well. I really can't picture a world, where a publisher doesn't want some BS to be added in.


3/15/2019 12:37:26 PM #11
+10

Posted By Gunnlang at 08:20 AM - Fri Mar 15 2019

Posted By Calidor at 10:50 PM - Fri Mar 15 2019

That to me at least seems a really strong hint that he is negotiating funding from an investor or publisher or something along those lines.

Though I would love for them to get some investor/publisher on board. Would make me nervous about what shit would be added in as well. I really can't picture a world, where a publisher doesn't want some BS to be added in.

Caspian has already turned down publishers who wanted to change the monetization model, or add cash shops, etc. That bodes well. That was almost two years ago- since then, the studio hasn't collapsed, and has actually grown. It's a good sign that if Caspian is talking with any publisher, he's now in a more commanding spot in negotiations. The past three and a half years has proven that we don't need a publisher to stay afloat, so any deal they present has to be more beneficial to SbS, rather than opportunistic.

3/15/2019 7:04:03 PM #12
+1

Theoretically we could crowdfund our own VC, as a VC is nothing more than a group of investors with a shared interest and a collective large amount of money.

I’m sure we could raise a significant amount of money as a group of backers, ensuring the spirit of the game stays within caspian vision, while at the same time funding the game, and potentially sharing in the success financially.

I would be up for it.


Count Wulfberht of Leîj'rez county, VII of the order of the IX.

Order of IX

3/16/2019 2:00:59 AM #13
+0

Posted By mickdude2 at 11:37 PM - Fri Mar 15 2019

Caspian has already turned down publishers who wanted to change the monetization model, or add cash shops, etc. That bodes well. That was almost two years ago- since then, the studio hasn't collapsed, and has actually grown. It's a good sign that if Caspian is talking with any publisher, he's now in a more commanding spot in negotiations. The past three and a half years has proven that we don't need a publisher to stay afloat, so any deal they present has to be more beneficial to SbS, rather than opportunistic.

My concern wasn't for now, it's after launch. The spark price is insanely low, for how long someone can get out of it. I still really don't understand how that will keep them afloat.

So my concern is any publisher/investor will see the same thing and want to change something. They want a return back after all.


3/16/2019 10:17:00 AM #14
+1

Posted By zimmah at 8:04 PM - Fri Mar 15 2019

Theoretically we could crowdfund our own VC, as a VC is nothing more than a group of investors with a shared interest and a collective large amount of money.

I’m sure we could raise a significant amount of money as a group of backers, ensuring the spirit of the game stays within caspian vision, while at the same time funding the game, and potentially sharing in the success financially.

I would be up for it.

Agreed. There isnt anything more that I'd want from the store. I want to play the game to earn anything. Still, if there was a way to support the devellopment and get my money back with a bonus after/if the game is released and runs well... I'd clearly have more money for them than I already "invested".


Friend Code: 30EF47

3/16/2019 2:36:04 PM #15
-2

Posted By Gromschlog at 06:17 AM - Sat Mar 16 2019

Posted By zimmah at 8:04 PM - Fri Mar 15 2019

Theoretically we could crowdfund our own VC, as a VC is nothing more than a group of investors with a shared interest and a collective large amount of money.

I’m sure we could raise a significant amount of money as a group of backers, ensuring the spirit of the game stays within caspian vision, while at the same time funding the game, and potentially sharing in the success financially.

I would be up for it.

Agreed. There isnt anything more that I'd want from the store. I want to play the game to earn anything. Still, if there was a way to support the devellopment and get my money back with a bonus after/if the game is released and runs well... I'd clearly have more money for them than I already "invested".

Good idea, but once you start talking about "investing" all sorts of legal rules come into play. (SEC Regulation A+ in particular.)

There is actually many equity style crowd funding platforms, but due to regulatory concerns most require a minimum investment of $1K.

They also have to verify you aren't spending beyond your means, either by verifying you are an accredited investor (typically can prove net worth, excluding primary residence, over $200K) or if unaccredited, you can't invest more than 10% of your net income or net worth.

There's a terrific article on a site called MoneyCrashers, Google "Crowdfunding Sites for Investors & Entrepreneurs" as it's a good, concise summary.

I'd link it for you, but they don't let harbingers do such things here. ;)


You must all be quick to listen, slow to speak and slow to get angry. JAMES 1:19 NLT

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