Debts of tens of millions and hope for a “new Destiny”: how Starbreeze was on the verge of bankruptcy

On January 28, Eurogamer released a massive investigation of how the once successful union of Overkill and Starbreeze companies was on the verge of bankruptcy. The material is written according to several employees who wished to remain anonymous. We chose from it the main thing.

The merger of two companies for the sake of salvation and the success of Payday 2

  • Players mistakenly believe that Starbreeze bought Overkill.In fact, it was rather a reverse process. The second company at the time of the transaction was in a better position.
  • After the unsuccessful release of the shooter Syndicate for EA Starbreeze, key employees left MachineGames (Wolfenstein: The New Order). Starbreeze, meanwhile, did not even have enough money to complete the Brothers: A Tale of Two Sons. The company needed a deal with Overkill to stay afloat. The authors of Payday also had problems, but not so significant.
  • Brothers: A Tale of Two Sons received positive ratings from critics and players, but did not become a big hit. Its author Jozef Fares left the company immediately after the release and founded his own studio, which made A Way Out for EA.
  • Under the terms of the deal, Overkill founders received payment for Starbreeze shares. However, securities with the name of the company by that time were practically worthless, so the creators of Payday became the owners of the majority share of Starbreeze.
  • In recent years players often asked Starbreeze and Overkill to release Darkness, Chronicles of Riddick or even Syndicate, but in practice the creators of these games left the company a long time ago. Franchises can come back, but their quality is unlikely.
  • Starbreeze and Overkill still remain afloat only for two reasons – the union and the incredible success of Payday 2 that followed. However, after the release of the game, the company began to split. One of the founders of Overkill, Ulf Andersson, according to employees, “burned out” – at first he simply stopped going to work and then sold his share to his brother, Boo. After that, Ulf founded Studio 10 Chambers, now working on a cooperative shooter GTFO. He was the creative engine of the company, and Boo was in charge of the business. A source close to them told Eurogamer that the brothers are no longer talking.

Bad investments

  • Bo Andersson believed that the Skybound deal to create a game in the The Walking Dead universe should have given the company financial stability for years to come. Overkill’s The Walking Dead was supposed to be a constantly evolving online universe. Starbreeze saw this game as a new Destiny – including financially.
  • Thanks to Boo’s ambitions, Starbreeze has also become a publisher. And if the deal with the authors of Dead by Daylight turned out to be incredibly successful (the game sold 3 million copies), then things went badly.Psychonauts 2 and System Shock 3 – protracted, who will not soon bring financial returns. And Raid: World War 2 from the studio that once made the DLC for Payday failed miserably and only caused losses.
  • Bu mistakenly bet on VRby purchasing the French engineering company InfinitEye and concluding a major contract with Acer. Starbreeze was going to release not only its own premium VR helmet, but also create VR games for the theme park in Dubai and cinematic VR demos for IMAX VR. However, the IMAX VR initiative never took off, and almost no one visits the company’s own VR cafe in Stockholm. In this case, Acer is now looking for ways to get out of the transaction with minimal losses.
  • Before the development of The Walking Dead the company bought the engine for 73 million kroons (about 8 million dollars). It was called Valhalla and became one of the main reasons for the current poor state of the company.

The disastrous development of Overkill’s The Walking Dead

  • When the developers started creating a cooperative zombie shooter, they quickly realized that the Valhalla engine was not suitable for the development of the game – the release date immediately had to be moved from 2016 to 2017. Nevertheless, the studio heads acknowledged that the investment was unsuccessful only two years after the start of the creation of TWD.
  • In August 2017, the studio decided to switch to the Unreal Engine, effectively throwing out two years of work of its employees in the trash can. Then the planned release of the game was moved from fall 2017 to fall 2018.
  • Switching to the Unreal Engine did not simplify the task.In the studio, only 10% of employees were familiar with the engine, so they often turned to instructions. This greatly slowed down the process, and in fact they had to release an AAA game in just a year – by the autumn of 2018.
  • Numerous sources told Eurogamer that the heads of Overkill did not have a clear vision of The Walking Dead. Many decisions were made on the games in which the authorities played at the weekend. Simple employees were asked to do something “like in Far Cry”, then “like in The Division” – sometimes the vision changed radically in just a couple of weeks.
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  • The management lied to employees about the success of Overkill’s The Walking Dead at E3 2018. Workers were told that the players were delighted, but later it turned out that the press considered the shooter “average”, and one demo at the exhibition even had to be turned off, because visitors did not want to play it.
  • The moral state of the studio in 2018 was disappointing. Many developers have argued that they seem to rush on the train, which is about to collapse into a precipice. They were hard recycled – up to 100 hours a week, and many of them even needed the help of a psychiatrist offered by the company. The motivation to perform any tasks was almost zero – because the employee, who had shot out earlier than others, was given even more work and with even tougher deadlines. Overkill employees felt as if the company betrayed them at every turn.
  • Overkill’s The Walking Dead was released on November 6, 2018 and only on PC – the console versions had to be postponed. The developers anonymously admit that the release does not pull on the final build – rather, it is alpha or beta.
  • TWD was a big hit in sales. In order for the studio to stay afloat, the game had to disperse with a circulation of 5 million copies, but at the start it did not even reach 100 thousand.
  • Sources Eurogamer believe that Overkill’s The Walking Dead may never come out on consoles. Perhaps the game is more profitable to cancel than to make additional investments in it and get another failure.

Dismissing the CEO, detention and the threat of bankruptcy

  • About the dismissal of the CEO became known in early December.Bo Andersson left the company where the “reconstruction” began – a reorganization that could save her from bankruptcy.
  • Up to this point, employees were well-disposed towards Boo. He often spent the night at work and even divorced his wife after several years with 100-hour working weeks. Boo was always as ambitious as possible – he was confident that Starbreeze and Overkill would become a giant company that produces AAA-class games. butBoo was too optimistic – Many of his decisions were hasty and caused the company only harm, including investments in VR and publishing.
  • Bu badly ruined his reputation in the company with his farewell letterwhere he said that “not all developers were willing to invest more time and energy in improving the quality of Overkill games,” although he himself worked almost every weekend. Employees are confident that in this way Andersson tried to shift the blame on his subordinates.
  • Bo Andersson sold his stake in the company for two million dollars (about 18.6 million kroons) on November 15, 2018, and on November 23, the company reported that The Walking Dead had failedand lowered financial projections. Thus, Bu managed to sell his shares just a week before they fell twice.
  • The police initially suspected Bo of fraud, but he was later freed from all suspicion.- It turned out that he was forced to sell the shares by employees of Carnegie Bank, around which the investigation is underway. The media reported that at least two people were detained in the case – their fate is now unknown.
  • To date, Bu has “disappeared from the face of the earth.” He does not comment on the situation with the studio and does not contact with employees.

What awaits Overkill and Starbreeze

  • The company’s total debt currently stands at about $ 44 million.. She owes money, including Acer, for an unrealized VR project.
  • Eurogamer knows that THQ Nordic is looking to the company’s assets.. However, the publisher will almost certainly not take the debts on itself – he is interested in franchise rights. Whether THQ can take over part of the staff of Overkill and release Payday 3 is not yet clear.
  • The peak number of players in The Walking Dead on Steam per day is about 600 people for the whole world.. The story of the game will probably end there.
  • The new head of the company is doing everything so that its more than 200 employees have not lost their jobs. But their future is foggy.

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