Starbreeze may have a ‘liquidity shortfall’ by the middle of 2019.
PayDay 2 and Overkill’s The Walking Dead’s publisher Starbreeze may not last another year following the story told by its Q1 2019 financial report that show gross profit and operating profit losses.
As reported by MCV, Starbreeze fully acknowledged its “challenging situation” and revealed that it would have a “liquidity shortfall” before the middle of this year if no further funding was secured, meaning it would not have the cash on-hand to keep the company running.
Q1 2019 results showed sales generated of SEK 47.8m ($4.9 million USD), with PayDay 2 accounting for SEK 26.7m ($2.7 million USD), which was up from the previous period. However, its EBITDA (earnings before interest, tax, depreciation and amortization) showed a loss of SEK -106.7m ($11.1 million USD), which was more than double the loss from the same period in Q1 2018.
Starbreeze has said that this decrease in earnings it “due primarily to lower net sales, higher administrative costs related to the reconstruction and the negative accounting effect of the sale of System Shock 3” amounting to SEK 68.1m ($7.1 million USD).
As for what can be done to avoid a company shutdown, acting CEO Mikael Nermark has said that his main goal to avoid the unfortunate outcome will be to secure funding.
“My main task is to secure financing for the company’s future operations,” Nermak said. “This involves both long-term financing we can use to build the Starbreeze of the future, but also making sure that the assets we have determined are unrelated to the core business are managed in a commercially viable way. Once this financing has been secured, we will be able to look ahead and present a more detailed strategy for the future.”
A big factor in Starbreeze’s troubles were Overkill’s The Walking Dead poor sales and the subsequent raiding by authorities of Starbreeze offices after indications of insider trading.
Starbreeze Studios was founded in Stockholm, Sweden in 1998 and has helped bring such games to life as The Chronicles of Riddick: Escape from Butcher Bay and Brothers: A Tale of Two Sons.
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Adam Bankhurst is a news writer who wishes Starbreeze and all its employees the best of luck and hopes the it finds a way to survive. You can follow him on Twitter @AdamBankhurst.
