The encyclopedia · Strategy & Leadership · Strategic decision · 2018
Starbreeze, Payday 2 creator, collapsed after The Walking Dead game flopped
Starbreeze built Payday 2, a mega-hit, then bet everything on Overkill's The Walking Dead. It sold just 100,000 units. The company filed for reconstruction.
Starbreeze AB · 2018-12-03
What happened
Starbreeze was a Swedish video game developer founded in 1998. After years of struggling and an accumulated loss of $14.4 million, the company struck gold in 2013 with Payday 2, a cooperative heist shooter that became one of Steam's most-played games. Payday 2 generated hundreds of millions in revenue and turned Starbreeze into a publicly traded gaming success story.
Flush with success and a rising stock price, Starbreeze bet big on its next title: Overkill's The Walking Dead, a licensed game based on Robert Kirkman's comic. The company poured resources into development, signed a publishing deal for console ports, and made the game the centerpiece of its growth strategy. It launched in November 2018.
The game was a commercial disaster. It sold approximately 100,000 units — a tiny fraction of what Payday 2 had achieved. Critics panned it. Less than a month after launch, the company admitted it faced a 'shortage of liquidity.' CEO Bo Andersson resigned immediately after selling 18.6 million SEK worth of shares, triggering an insider trading investigation by the Swedish Economic Crime Authority.
On December 3, 2018, Starbreeze and five Swedish subsidiaries filed for company reconstruction (företagsrekonstruktion), a Swedish legal process similar to Chapter 11 bankruptcy protection. Skybound Entertainment revoked The Walking Dead license in February 2019, canceling the planned console ports. The company laid off 60 employees — about 25% of its workforce — in June 2019. The reconstruction was completed in December 2019, but the company that had been a rising star of European gaming was permanently scarred.
Why it happened
- Starbreeze bet the company on a single licensed game that it did not own the rights to — when the game flopped and the license was revoked, there was nothing to fall back on.
- Overkill's The Walking Dead sold only ~100,000 units, a catastrophic underperformance for a title that was supposed to carry the company's near-term growth.
- The company failed to diversify its IP pipeline. Payday 2 was a massive hit, but Starbreeze had no other successful franchise to absorb the blow when the next game failed.
- CEO Bo Andersson cashed out his shares weeks before the collapse and resigned immediately, leaving the company without leadership at the moment of crisis.
The lesson
A single hit does not make a business. Starbreeze had Payday 2 but never diversified, so one flop brought the whole company down.
Aftermath
Starbreeze AB filed for company reconstruction on December 3, 2018. Skybound Entertainment revoked The Walking Dead license in February 2019, killing the planned console ports. The company laid off 60 employees in June 2019 (25% of staff). The reconstruction was completed in December 2019, and the company survived under new majority ownership by Digital Bros (January 2020). Payday 3 was released in 2023 but also underperformed, leading to the CEO's firing and additional layoffs in 2024-2025.
Sources
- Variety — Starbreeze files for reconstruction after Overkill's The Walking Dead disappointment (Dec 3, 2018)
- MCVUK — Starbreeze and five of its Swedish subsidiaries file for reconstruction (Dec 3, 2018)
- Wikipedia — Starbreeze Studios (financial history, OTWD sales ~100K, reconstruction)
spotted an error? The club wants to know.
More like this
Nokia's N-Gage tried to be a phone and a game console — and was terrible at both
bwin called its bets 'risk-free' — one customer's DKK 15 payout proved they weren't
Grin made Bionic Commando — Square Enix cancelled a Final Fantasy project without paying
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.