Starbreeze seeking new funding to stay afloat

Investment required to guarantee continued operation for the next year

Swedish studio Starbreeze is facing an uncertain future, with the company stating it will probably require new funding to remain operational over the next 12 months.

Failure to secure fresh investment would likely result in a “liquidity shortfall” by mid-2019, the Chronicles of Riddick developer said in its first quarter financial report.

For the three months ended March 31, 2019 net sales declined 56% year-over-year to SEK 47.8 million ($5 million/£3.8 million).

Over half of Starbreeze’s revenues were generated by its Payday franchise. At its peak in Q1, Payday 2 had 15,172 concurrent players.

Starbreeze’s pre-tax losses swelled from SEK 6.4 million ($668,000/£512,000) in the first quarter of 2018 to SEK 167.3 million (£17.5 million/£13.4 million) in the first three months of the current year.

The company, which employs 580 staff, has been restructuring since December 2018, when it announced plans to streamline its operations to focus on its core games development and publishing businesses.

During the first quarter of 2019, Starbreeze sold the publishing rights to System Shock 3 back to OtherSide Entertainment.

Rights owner Skybound also terminated the license agreement it held with Starbreeze for Overkill’s The Walking Dead, resulting in the PC version of the game being pulled from sale and console editions ceasing development. Starbreeze said it’s seeking a resolution with Skybound.

Additionally, Starbreeze said it has signed a binding agreement on the terms of a five-year distribution deal with Universal Games and Digital Platforms for upcoming mobile title Payday: Crime War.

Acting Starbreeze CEO Mikael Nermark commented: “We are in a challenging situation. I stand united with the entire Starbreeze team in the efforts to get the business in order.

“We have a very strong asset in Payday, which is the foundation upon which we will build Starbreeze future.”