Previously, Starbreeze Studios were cutting costs when Overkill’s The Walking Dead missed sales targets. That report seems to have had more of an impact that first thought, as the studio is now filing for insolvency.
The studio’s CEO Bo Andersson Klint took on the role in 2013, leading in drastic changes to Payday 2 and other games for a service-based model. The studio lost $22.2 million in 2017, and $11.3 million in Q3 of 2018- both before tax.
As mentioned in the prior article, one of several reasons was the under-performance of Overkill’s The Walking Dead. As a press release from Starbreeze Studios states:
“With the latest statistics from Overkill’s The Walking Dead (including effects from latest marketing efforts) affecting the forecasted sales, it has reduced the short term forecasted revenue resulting in an expected shortfall of cash in January 2019.”
Starbreeze chairman Michael Hjorth gave a statement, explaining:
“In this phase, Starbreeze needs a different kind of leadership and we have therefore decided to ask Mikael Nermark to take on the full responsibility with our full mandate for this new phase. […] Nermark will take over management of operations and lead the work to focus the company. During his tenure as CEO in previous years, he implemented a comprehensive restructuring and repositioned the company from work for hire to game development based on proprietary IP.“
Nermak had been Deputy CEO since 2009, and became CEO for a brief spell in 2011 to 2013.
Starbreeze Studios have received approval from the Stockholm District Court for “reconstruction” – it enables companies a little more time to find money to pay off debts. It also means employees and suppliers can still be paid, though they cannot pay debts to suppliers from prior to applying for reconstruction.
The press release issued by Starbreeze continues, elaborating further:
“The decision is based on a shortage of liquidity and deemed to be a necessary step to give the Company the time needed to negotiate a long-term financial solution and implement changes in the organization and operations. […] The financial targets for Q4 2018 and 2020 no longer applies.”
We will keep you guys posted.