Backers of the infamous Star Citizen project no longer have any means of demanding refunds from its developer, Cloud Imperium Games (hereon referred to as “CIG”). Considering the project’s current reputation, this probably won’t come as much of a shock to the wider gaming audience. However, it really shouldn’t surprise anyone since the writing’s been on the wall for quite some time now.
Normal means of pursuing refunds were effectively removed with Star Citizen’s June 6, 2016 terms of service update, but it wasn’t until December 2017 that CIG ceased issuing them entirely. Since then, the developer has just been sitting on refund demands. One backer, a reddit user going by the handle “Firefly212,” decided that they weren’t going to take such treatment sitting down. They sued CIG in US small claims court, filing their claim in early June. The court date was set for July 13, and the results came back the same day.
According to Firefly212 in a reddit thread entitled “I lost in court,” the judge declined to hear anything regarding the TOS’ “conscionability or lack of consideration.” As for CIG, who sent a representative of their interests, they were able to successfully argue that the arbitration clause present in the current TOS should be applied to transactions that occurred before it existed, despite the very first sentence of the Star Citizen TOS stating otherwise.
“These Terms of Service (TOS) do not affect any transactions made before its effective date. All prior transactions are governed by the TOS in effect on the date of such transactions .”
This in effect means that Firefly212 lost their case. It was dismissed by the judge and sent to arbitration as demanded by the current version of the Star Citizen TOS. Considering that the current TOS effectively removes all rights to refunds it’s probably safe to say that Firefly212 won’t be getting their money back. It doesn’t end here though. To find out what exactly this turn of events means for CIG and Star Citizen’s backers, we now turn to a man by the name of Derek Smart.
Smart is an independent game developer who’s been following CIG’s antics very closely over the past few years. Through his personal website, he’s been maintaining a forum which, among other things, has meticulously documented and laid-out plainly all the changes Star Citizen’s TOS has undergone since 2015. As shown in the thread dedicated to it, CIG has removed almost all backer’s rights through their revisions to the TOS. This includes CIG’s obligation to be financially accountable to their backers, something that they explicitly promised during the project’s initial drive for funding. They apparently don’t really have to deliver a final product either. The list goes on, but for now we must return to the topic of refunds.
On Twitter, Smart weighed in on the outcome of Firefly212’s case:
I also said that CIG would have no choice but to respond. And when they do, that it would set a precedent for all similar cases going forward.
And that's precisely what has now happened.
Now we know – on the public record – what their "defensive argument" is.
— Derek Smart (@dsmart) July 14, 2018
As Smart states above, a precedent has been set now that this has happened. Backers who want to try and force the issue and sue CIG now have next to no chance of getting anywhere in small claims court. One is tempted to say that they could just band together and pursue a class-action lawsuit, but, that route has already been closed-off by the Star Citizen TOS.
Prior to the arbitration clause being retro-fitted, the number of backers seeking refunds since 2016, could very well have filed a class action lawsuit to get their money back, get financial accountability promised etc. Heck, game companies have been sued for less. And LOST.
— Derek Smart (@dsmart) July 14, 2018
Very recent backers still have the possibility of requesting a refund, but it must be processed within fourteen days of their pledge. Given that CIG has previously seen fit to simply not respond to refund requests, those thinking about contributing to the project would do well to think twice before doing so. Because now, once one has pledged money to Star Citizen, there is absolutely no going back. Cloud Imperium Games have made sure of it.