Cloud Imperium Financials for 2020


It has been an extraordinary time since I last sent out our Accounting, but in keeping with our usual practice at this time of year I today set out our accounting for the 2020 Financial Year. I adopt the same format as prior years and follow the same simple cost accounting rules. For those unfamiliar, that means without the requisite formats and disclosures required in our financial statements and without revenue recognition adjustments, intellectual property amortization or other accounting adjustments that depart from the more simple and understandable cash entries that we expect our average reader is more familiar with.

Indeed, the Accounting is intended to be simple and understandable, showing “income,” net of sales taxes, as invoiced or accrued, and costs as incurred, adding capital expenditure as “spent.”

But what I present here is derived from the numbers our auditors have reviewed and independently verified as part of their audit work relating to the financial year being reported upon.


The 2020 accounting shows that Cloud Imperium grew more rapidly in 2020 than any time since the year following its inception, with an almost 60% increase in pledges and subscription income. However, this record-breaking year for new customers and community engagement was unlike those that had gone before – in large part due to the unusual circumstances surrounding the COVID19 pandemic, which created a captive audience at home eager for the entertainment we were fortunate enough to be in a position to provide. However, I would not want to diminish the impact of our regular and improving game deliveries, which has substantially led to our improved performance, as well as introduction of new events that created new opportunities to engage and grow our active user base. Many games companies in a similar privileged situation to us also reaped the benefit of an audience eager for entertainment that they were being deprived of from other outlets. However, unlike many of our comparators, this year we have managed to maintain this growth and should eclipse last year’s performance in 2021, when the COVID uplift impact has lessened. This ability to continue our revenue growth is testiment to the improved quality, stability and increasing bredth of what we are delivering to our customers.




2020 was a record year for income with pledges up 62% to $77M and subscriptions up 29% to $4.7M. Other income was down 31% at $6.5M, owing to the end of the US incentives program that we only qualified for during our initial years of US growth. To recap: the top three lines describe our revenue sources:

Pledges / Counter

This line is taken directly from our daily published Funding Stats Counter, showing the net receipts from our backers and customers. However due to exchange differences and small items that are not included in the counter, such as collected shipping costs on physical goods, the counter does not completely represent all revenue received. Other than subscriptions (referred below) these differences are included in the final income line, to give an accurate representation of total revenue received.


The subscriptions line is the value of our subscriptions using standard exchange rates. Again, any differences due to exchange rate movements have been accounted for in the final income line.

Other income

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

Trading Costs


Trading costs are broken down by territory and year into 5 broad categories.


In 2020, Cloud Imperium continued to grow its expenses and company profile. Costs increased by 10% over 2019 to $74.8M and capital expenditure, at $6.1M, was 150% up on 2019, impacted by the purchase of the perpetual Company CryEngine license for use not just in our current games, but also for potential use in any future projects that CIG might develop. The breakdown of the expenditure is commented upon below. 2020 was an unusual year in which we had to transition to work from home for much of the year and be agile with our development plans. We accelerated much-needed investment into our publishing and security disciplines, in part due to the increased customer engagement but also due to the distributed nature of our operations during the pandemic.

Salaries and related on-costs

Salaries and related on-costs represent the total employee cost within the Group, excluding Community and Marketing personnel – whose salaries and related costs are included within their associated cost line.

This shows that salary costs increased in both territories, by 11% in the Rest of World territories and 10% in the US. Non-marketing headcount increased in the Rest of the World by 14%, although a lot of this was towards the end of the year. In contrast the US remained unchanged by the end of the year, but increased during the year to handle certain spikes in activity. The intense wage competition experienced mainly in the US in 2019 continued, but also spread to the Rest of the World, augmented and accelerated by the pandemic situation that generally created more employee turnover arising from the uncertainty and strains caused by this situation.

Other game development costs (overheads)

Other game development costs, representing the costs of operating the various studios and including such expenses as office rental and maintenance, travel and accommodation, IT, and other costs not included elsewhere, reduced by 2% to $8.8M. This was mainly due to the Pandemic lockdown, which forced us to work from home for much of the year. Travel was reduced to virtually nothing from the end of Q1 onwards and office costs, from reduced office occupation, were down – although they were supplemented with work-from-home costs, particularly impacting on IT and remote-working hardware and software. The Rest of the World, with the most employees and traditionally responsible for the most travel, was primarily accountable for the fall in costs in this category.

Contracted Game Development Costs

These represent the costs of contracted services supporting game development work. For 2020 this dropped by 3% to $5.5M following the objective of taking more of this work internal – where possible and economic to do so. However, continuing the trend from 2019 the US increased its external development work and in 2020 represented 43% of the group’s total spend in this area. This was unsurprising given its comparatively small core development team, whilst the Rest of the World – with a larger and growing internal development resource – actually reduced its external services engagement, particularly with less filming and recording studio work undertaken during the pandemic.

Publishing Operations, Community, Events and Marketing

These costs are associated with running the game, deploying online services and providing customer support. It also includes the costs of running our platform, publishing, data hosting and server costs. It includes sales collection and customer liaison costs and the costs of our marketing and community events. As such this cost line moves directly with income and unsurprisingly showed a large growth in 2020, up 35% to $15.4M. With no CitizenCon this year due to COVID19 (in 2019 it was hosted in the UK) and the bulk of the publishing (Austin) and marketing (Los Angeles) operations run from the US it is not surprising that this growth primarily occurred in the US.

General and Admin

These costs represent insurances, accountancy and other professional and legal fees not apportioned directly into the cost areas identified previously. Although they are in part driven by the growth in the operations of the group, they are primarily corporately led and reduced worldwide activity in 2020, arising from the pandemic, allowed us to economize in this area compared with prior years. However, by its nature this cost line fluctuates significantly and the growth in operational size in 2020 is likely to drive further costs in this area in later years as we grow our indirect G&A to match.

Capex and Investments


This represents capital expenditure in areas such as hardware and software, fixtures, fittings, and on offices. Whilst it trends with staff numbers it is also impacted by hardware renewals, server upgrades and other security and infrastructure purchases.

Whilst capital in nature, it is included in this accounting as it represents an outlay for the materials required to develop and publish the game. Since the total capital expenditure amount is included here, we do not list the depreciation portion of such expenditure subsequently in the cost analysis.

Capex spend in 2020 was significantly up on 2019, which in part was driven by the headcount increase, but in the year we also purchased a perpetual worldwide license for use of the CryEngine, which provides us greater flexibility in how we develop and deploy the engine within our existing and planned future business.

Headcount Analysis



The headcount analysis represents the people working at the end of the year under the broad disciplines identified. (Note: It is not average people numbers for the year). Employee numbers increased to 695 in 2020, up 91 (15%) on 2019. The comparative split by territory was proportionately similar and in both territories the growth in Marketing and Publishing was driving the increase. This was due to the increased customer engagement necessitating such hires – but also the pandemic made hiring of people into the integrated, highly collaborative development function slightly more difficult in comparison to other disciplines more suited to the home working environment that prevailed throughout most of 2020.



Whilst the surplus show here will not translate into an accounting profit when applying revenue recognition and other accounting conventions, the 2020 Accounting shows the Group experienced an unexpected boost beyond its ordinary forecasted growth, with the excess arising from two brand-new occurrences: the first being the creation of new in-game events generating greater engagement opportunities in the first half of the year, and the second being in the fortunate position to deliver entertainment and content to an audience starved of its normal entertainment outlets. Being geographically distributed already the group transitioned quickly to a work from home operation and strived to minimize the impact this might have on its medium to long-term plans. However, the growth required accelerated investment in certain areas, particularly into its publishing and security disciplines and to be agile in its operational endeavors. Development became focused upon the content to be made available for people to enjoy now, during this difficult time – but the Company continues to believe that longer-term the incredibly complex and interdependent nature of what we are developing will best be achieved through collaborative office-based work, having begun to feel the negative impact of prolonged work from home on our collective and interconnected work plans in 2021 – which is why it is using some of this extra income generated in 2020 to expand its offices in 2021 – not just to accommodate the increased headcount in all locations – but to upgrade the facilities there and make such spaces a world-class place for collaboration and innovation.

During 2020 the group made a return on capital of ($4.8M) worldwide, ($1.3M) in the Rest of World and ($3.5M) in the US. Much of this was to pay down accelerated taxes and fees arising from the structuring of the group and some was a return on the minority investment made to date, with net inward investment to date at the end of 2020 still equivalent to $58.4M.

At the time of writing, I am pleased to report that 2021 has gone very well also and we are on track to beat our net budgeted position by the end of 2021. Q4 has been another record-breaking quarter and should see us exceed our 2020 sales numbers, despite a fall-off in the COVID19 impact on our customers. We will not experience the same growth in sales that we did in 2020 but the fact we should beat last year’s numbers, unlike many of our comparators, is testament to the quality, stability and breadth of what we continue to develop and publish. However, we have not sat still, and costs have also increased as we continue to push forward in a highly competitive environment. We remain even more convinced in the value of what we are creating, which is truly groundbreaking and dare we say almost impossible to achieve under the traditional development model that went before us. We hope that with the continued support and backing of our community we will provide a unique unparalleled experience for our customers and each year seek to demonstrate improvements as we continue to push towards our future objectives.

Share this article: