Starbreeze, the Swedish publisher and developer behind titles like The Darkness and PAYDAY 2, has been in big financial troubles for a while now. Everything came crashing down when OVERKILL’s The Walking Dead turned out to be a very disappointing release, with Skybound Games opting to terminate their existing contract with Starbreeze.
To try and stay afloat, the company had to sell the publishing rights of System Shock 3 back to Otherside Entertainment, the publishing rights of 10 Crowns back to Mohawk Games, the publishing rights of Psychonauts 2 to Microsoft (now the owner of developer Double Fine), as well as the art studio Dhruva Interactive to Rockstar Games, where it will now operate as Rockstar India. Moreover, Starbreeze had to lay off over 60 employees, about 25% of the workforce, in June 2019.
A new press release has shared updated estimates of cash flow. The company is now planning to release PAYDAY 3 in 2022 or 2023; we already knew it probably wouldn’t have launched by 2020 and with the present difficulties, another delay isn’t at all surprising.
The folks at Starbreeze are also counting on receiving funds from publishing partners in the first half of 2020 for both PAYDAY 3 and PAYDAY: Crime War (a mobile game). These funds would also create opportunities to repay creditors for an estimated sum of 40 million Swedish crowns, or 3.69 million euro.
As part of the reconstruction, assets and personnel attributable to the core business have been transferred to two new companies, New Starbreeze Publishing AB and New Starbreeze Studios AB. IP rights make up the majority of the assets and have been transferred to New Starbreeze Publishing AB. It is in New Starbreeze Publishing AB that the Group’s cash flows will be generated.
In the reconstruction work, one of the four major international accounting firms has also valued the company’s assets, which is the basis for the transfer of assets that has taken place to the subsidiary New Starbreeze Publishing AB. These assets (mainly IP rights for PAYDAY) have been valued at SEK 1,600 million. Corresponding assets are recognized in the consolidated balance sheet at SEK 333 million as of June 30, 2019.
The reconstruction work is continuing and the company intends to present a reconstruction plan shortly. As part of this work, the company will send letters to the creditors in the next few days with proposals for settlement. The letters will be followed by composition negotiations, after which the final reconstruction plan will be presented.
What the company reports in this press release is not a forecast, but merely a cash flow estimate to enable creditors to form an opinion about the future repayment ability of Starbreeze.