Star Citizen #HG

Greetings Citizens,

We’ve hit another record-setting crowd funding level: $41 million!

I’m incredibly happy to hit this goal as it green-lights a very important research project aimed at improving Star Citizen’s long term future. With this funding, we’ll be looking into procedural generation to help build the universe out in a greater detail and scope in ways we didn’t think possible when we started developing the game! We will have some exciting announcements to make down the line involving some of the talent we’ve been talking to about helping us with procedural system and planet building.

Procedural Generation R&D Team – This stretch goal will allocate funding for Cloud Imperium to develop procedural generation technology for future iterations of Star Citizen. Advanced procedural generation will be necessary for creating entire planets worth of exploration and development content. A special strike team of procedural generation-oriented developers will be assembled to make this technology a reality.

OCULUS

Like many of you, I was genuinely surprised to hear the news that Oculus had been acquired by Facebook. There has been a lot written this past week about the acquisition and some notable people have come out for and against. I know a lot of backers and gamers feel like they’ve been betrayed by Oculus “selling out.”

I’m not one of them.

Why?

From the start I was very aware that the Kickstarter for Oculus was just to prove there was a demand. In order to play in the consumer hardware business you need A LOT of money. And while we prove every day that crowd funding can generate more dollars to back a dream than anyone imagined was possible it is still not enough in the game Oculus hopes to play. Even with the $91M they raised from Venture Capital it was not enough.

To illustrate what I’m talking about let’s just take the Star Citizen community. When we ran a survey at the end of 2012 approximately 30% of the respondents said they planned to purchase the Rift to play Star Citizen. We currently have more than 400,000 accounts, and I would guess by the time the Rift consumer version launches it could be close to 600,000 to 800,000. So at our high end (assuming the percentages stay consistent as we grow, which I acknowledge is a big “if” as I suspect the Star Citizen early adopters are predisposed to invest money in the best possible gaming experience) that would be 240,00 Rift headsets at the high end. The price goal of the Rift was $300 retail. Let’s say the Rift costs $200 to manufacture and ship – not unreasonable if you compare it to the component cost of some smartphones, which have some of the same parts (display, accelerometers), don’t have some other parts (optics, headset, input / output) but have some others that the Rift doesn’t (memory, CPU). And of course Oculus is not going to have the same volumes Samsung or Apple have so it will probably have to pay more for similar components.

As you can’t really build hardware on demand you need to make sure you manufacture enough to meet initial demand. So just to meet the demand from Star Citizen early adopters, they would need to invest $48M in inventory. Let’s say their goal would be to sell one million headsets in the first year (not unreasonable if Star Citizen will help sell 200,000+). One million headsets would be $200M in manufacturing costs – and that isn’t even counting marketing costs. As another example Microsoft invested more than $1 billion dollars in Xbox One inventory for this past holiday (each Xbox One costs $471 and they sold more than 3M units in the holiday season).

Consumer hardware is a big boy’s game and this is the reason why Oculus agreed to be bought by Facebook. Otherwise, their fear would be that they prove there is a demand for VR but don’t have the resources to scale and capitalize on it while a much deeper pocketed company (like Samsung or Sony) sweeps in with the financial muscle and says “Hey, thanks for all the hard work, now let us reap the rewards!” As headline grabbing as the acquisition cost was in terms of wealth generation for such a young company without any significant sales, the real reason why Palmer, Brendan, et al. went with the deal was to be able to deliver VR at the scale that will make it mainstream.

At this point I don’t see Facebook being anything other than a very rich sugar daddy – the core Facebook strategy is about user acquisition through easy accessibility from multiple ubiquitous platforms. The Rift is neither ubiquitous nor easy to access right now! I can only guess that Mark Zuckerberg made this move as a bet on a potentially exciting future platform enthused by his tech geek’s excitement over what VR could bring. Both the key Oculus team members public comments and Facebook’s positioning stress that the deal was really about giving Oculus the resources to achieve the vision on a global scale, and not about another platform to see your friends data stream on.

I want to see Oculus and VR succeed.

From the moment I first saw the Rift, I knew it was something special. I can tell you firsthand that the team behind the headset has a true passion for making VR tomorrow’s standard. My hope is that the Facebook acquisition will mean more funding for a better finished product and not a loss of the incredible soul and vision that convinced me to back the project. I haven’t heard or seen anything to the contrary so until I do we are fully committed to supporting the Rift.

Now to answer the myriad forum threads that popped up worrying about the possibility of Cloud Imperium selling out to a much bigger company – don’t worry! We have no plans nor interest in “selling out!”

Thanks to the amazing support from the community we don’t need to go to anyone with deep pockets to make OUR dream a reality. As we deliver a digital product we have no huge inventory costs, just the costs of development and running servers which at the moment are covered by the community’s contributions.

And last but not least I’m having way to much fun building the universe of my dreams for everyone to adventure in! I’ve been down the big company acquisition route twice before and there’s a reason I am making Star Citizen totally independently!

POLL RESULTS

Last time, we asked you to vote for the next stretch goal’s player reward… and the resounding winner was UEE Marine combat armor! You can read more about the armor, which will be unlocked at $43 million, now:

Omni Role Combat Armor (ORC) mk9
Manufacturer: CDS (Clark Defense Systems)
The ‘standard’ Marine armor for almost twenty years, ORC armor is prohibitively more expensive than standardized infantry body armor used by Army Ground Forces, but the Marines boast far fewer numbers and tend to make compelling arguments to get what they ask for. Clark Defense Systems’ ORC armor is created of composite mesh of fibers reinforced with ablative plates, offering a modest protection against both energy and kinetic weapons. While it doesn’t offer the same protection of the Marines’ proprietary Nail-armor or their SpecOps variants, ORCmk9 armor is a baseline solution for any number of situations the average Marine will encounter on any given day. Besides, in the words of Lt. Col Armin Trask, “you wanna know the best armor? Not getting shot.”
We’ve eliminated the least popular reward (bonus UEC) and started a second poll; be sure to vote for what you’d like as the $44 million goal below!