Starbreeze Studios are in worse shape than thought following the poor launch of Overkill's The Walking Dead, today filing for reconstruction (roughly the Swedish equivalent of administration) so they can get the company back on track. The company, who are also behind behind games including Payday 2 and Brothers: A Tale Of Two Sons, plan to keep paying salaries and continuing development as normal. But they're in a perilous state.
"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 organisation and operations," Starbreeze said in today's financial announcement.
Starbreeze said on November 23rd that sales of Overkill's The Walking Dead were "lower than forecasted" and "disappointing". That coupled with a $10 million (£8m) license fee from the console version hitting their books later than expected set Starbreeze on a cost-cutting kick to focus more on making and publishing games. Administration is a step beyond that.
Starbreeze get to temporarily suspend debts owed for services or goods prior to entering reconstruction, and the court will appoint an administrator to help them sort finances out one way or another. This could lead to drastic changes, or it could not. Starbreeze have replaced their CEO too, and both he and another fella have resigned from the board of directors.
"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," Starbreeze chairman Michael Hjorth said.
Despite all this, all of Starbreeze's language suggest they think they'll get back on track and keep on making those there video games.
I am surprised that Starbreeze are so surprised by the poor sales of Overkill's The Walking Dead. Even when Starbreeze announced it back in 2014, we were years past the peak of The Walking Dead as a brand, years past the peak of zombie games. Payday 2, also by Overkill, is huge but its cooperative stealth-o-shooter heisting offers something unique. Yeah, four-player zombie-mashing can be fun, but Nic Reuben's Overkill's The Walking Dead review says this is just, like, fine.
They launched a cheaper 'Starter Edition' of The Walking Dead last week, which costs £25 instead of £47 but doesn't include access to the season of post-launch content now underway. That evidently hasn't done enough, as Starbreeze say they expect to be short of cash in January 2019.