Starbreeze has had a rocky couple of months. While the company has been suffering quietly for years, the public came to learn of Starbreeze's financial problems around the release of Overkill's The Walking Dead, which may have had a massive hand in bringing the company down. Communication on The Walking Dead's development was so bad that a part of its E3 demo was canceled due to its poor performance and nobody bothered to tell the developers.
A new report from Eurogamer recounts the troubles at Starbreeze, best known for the Payday series. Starbreeze's problems extends far beyond its most recent title, Overkill's The Walking Dead, but development on that title accelerated the problems the Swedish company was already facing.
Starbreeze originally signed a deal with Skybound Entertainment in 2014 to license The Walking Dead series for a new video game title. The promise was that Starbreeze could make Payday meets The Walking Dead, but the pitch later evolved into a live-service title that could be on par with Bungie's Destiny.
Originally slated to be developed on the proprietary Diesel engine that powers Payday, Starbreeze spent about 73m SEK in shares (about 8 million USD) to purchase a new game engine called Valhalla. This new engine was going to serve as the basis of all Starbreeze games going into the future, including The Walking Dead. The problem was, as one Starbreeze developers says, "It was impossible to use."
After years of struggling to develop The Walking Dead on Valhalla, Starbreeze gave in and announced in April 2017 it would move development to Epic's Unreal Engine. This proved just as problematic as years' worth of work on The Walking Dead on Valhalla was now obsolete. Starbreeze developers now had a year-and-a-half to basically remake the game completely in Unreal. To make matters worse, the company intentionally kept developers in the dark about reactions to The Walking Dead. At E3 2018 developers were told that everybody loved the demo, despite middling press coverage.
"We said, 'don't worry about the negative people. It was not like this. We can assure you on the booth, people loved the game,'" recalls one Starbreeze source. "But we had guys on our team who were there who said, 'no that's not true. We had to cancel one demo because people didn't want to play that level because that level was not good or fun.' But they never said that to us. You can't solve an issue if you don't admit you have one."
Overkill's The Walking Dead eventually shipped on November 6, 2018 to poor reviews and worse sales. But according to the developers, this was expected. "This is why the game feels so alpha," says one developer. "It's because it is. It's a year-and-a-half in. It's a beta game because we made it in a year-and-a-half."
The full report recounts a series of financial missteps by Starbreeze CEO Bo Andersson. The company spent millions into opening costly studios in the United States, and investing heavily into VR technology, including development on an unreleased VR headset. In December Andersson was fired as CEO, and in the same month the company was raided by Swedish authorities over an investigation into insider trading.
The fate of Starbreeze is yet unknown. Though there's apparently some mention of a buyout, Starbreeze has millions in debt that needs to be repaid by a potential buyer. Starbreeze is currently in the hands of managers deciding the best course of action for the company, and there are 200 jobs at risk if Starbreeze goes under. For the full report check out Eurogamer.