Payday publisher Starbreeze files for bankruptcy

Payday publisher Starbreeze Studios has filed for Sweden's version of bankruptcy after worrisome financial issues.

Starbreeze today filed it and its entire web of subsidiaries for a protective process called reconstruction after realizing it wouldn't meet its quarterly earnings targets. Starbreeze CEO Bo Andersson has resigned as a result of the money issues.

The company appears to have over-relied on Overkill's The Walking Dead to help buffer sales revenue (or at the very least offset the marketing spend for the game) for its fourth quarter, but the game under-delivered and forced the publisher to tighten its development belt. But this new spending plan wasn't enough and it became clear that insolvency was the answer.

So what does this actually mean?

In a simple explanation, reconstruction is essentially a means of protecting Starbreeze from previous debt for a period of time so it can negotiate how to handle its financial woes.

All employees will continue being paid during Starbreeze's reconstruction period, and the company will still pay for goods and services to outlying suppliers (such as Steam, who sells Overkill's new Walking Dead game). But it won't pay suppliers for goods and services due before the reconstruction date.

It's likely Starbreeze will see The Walking Dead's console release in February as a possible bounce-back point of revenue, but we could see the end--or at least a very significant change--of the publisher if things aren't handled properly. We could also see Starbreeze sell off key IPs like Payday in a bid to recoup cash (maybe THQ Nordic will buy it?).

Here's an official quote from the company:

"Starbreeze AB (publ) ("Starbreeze" or the "Company") announces that the board of Starbreeze AB (publ) and the boards of the Company's Swedish subsidiaries Starbreeze Publishing, Starbreeze Production, Starbreeze Studios, Enterspace and Enterspace International, have today filed for reconstruction with the Stockholm District Court.

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.