Project CARS under investigation

, | Games


Slightly Mad Studios started Project CARS in April 2011 with a different crowd-sourced funding model. Instead of a Kickstarter, the realistic driving simulation would be directly funded by players who would not only have a say in the direction of the game development, but could receive a share of any profits. It’s this innovative funding model that’s being investigated by the UK’s Fincancial Services Authority for being a possible unregulated collective investment scheme. Eurogamer has the story on why the FSA is investigating and how Slightly Mad has had to stop receiving contributions for their game. Andy Tudor, the Slightly Mad Studios Director, says they made sure that every contributor was clear on the intent of the project and disputes that it was ever framed as an investment.

There may have been talk, or people may have interpreted it that way and replied back to posts saying it’s an investment, but it’s not. We were very clear. We discussed this for months and months before we launched. Internally we never called it an investment, externally we never called it an investment, the terms and conditions never call it an investment, ever.

The people on the forums right now understand it is not, and that is the way it has always been. We basically hire you as a staff member. The royalties are us paying you wages for contributing to the project.

Unfortunately, Ian Bell, the founder of Slightly Mad had written the following in April 2011 to prospective customers on a fan forum making things slightly less clear.

My idea is to let anyone interested invest in the development, both financially and with their time, if they want. Our lawyer is working on the terms and conditions so this is going to happen.

Becoming the biggest developer on earth overnight would be newsworthy, which would pull in more investors. We suspect we might even get banks in looking for a 200 per cent – 500 per cent-plus return in 18 months.

Imagine we sell 2 million units of the final game (Shift 1 did 5 million and Shift 2 is tracking well also). The revenue from those sales is approx. 70 million dollars. 5-7 million dev cost and a few more million for marketing, and we’re still looking at a very healthy return for the investors.

The plan is that any investment into the development is exactly that, an investment.”

The investigation is ongoing and the outcome could determine if the game is ever completed, let alone shows a profit and pays back the contributors.