Starbreeze announces cost cutting following less-than-stellar The Walking Dead launch

Starbreeze announces cost cutting following less-than-stellar The Walking Dead launch

Another day, another negative story about a games company associated with The Walking Dead.

Starbreeze Studios has said that it is looking to cut operating costs following a weaker-than-anticipated Overkill's The Walking Dead launch.

The reason that this title did not meet expectations was - according to Starbreeze - that sales in countries that had a lower RRP for the title, including Russia and China, were much higher than anticipated.

Furthermore, the $10m license fee from 505 Games is not able to be recognised as revenue until the end of Q4 2018. The firm says that it will be profitable for that period of time, but will be EBITDA negative for the full 2018/2019 fiscal year.

“We will not be able to recognize the license fee from 505 Games for Overkill’s The Walking Dead as revenue until after the end of the fourth quarter, while initial sales revenues from the game are lower than expected," CFO Sebastian Ahlskog said.

"This will have negative impact on fourth-quarter earnings, but our target of positive EBITDA for Q4 stands."

Starbreeze chair Michael Hjorth added: “This is disappointing, of course, but we have a base to work with in regards to the number of games sold. We have a pulse of concurrent players, which is essential to future performance within the framework of our Games as a Service concept. The team is working at full capacity to deliver improvements to the game and new content, and Season 2 will be starting soon."

Overkill's The Walking Dead launched on November 6th and currently boasts a three star rating on Steam. No doubt launching so shortly after the launch of Red Dead Redemption 2 and around the same time as projects such as Call of Duty: Black Ops 4 and Battlefield V did not help the game.

The weaker-than-anticipated performance of The Walking Dead follows Starbreeze declaring a $11.3m loss for Q3 2018.

Editor - PC Games Insider

Alex Calvin launched in August 2017 and has been its editor since. Prior to this, he was deputy editor at UK based games trade paper MCV and content editor for marketing and events for London Games Festival 2017. His work has also appeared in Eurogamer, The Observer, Kotaku UK, Esquire UK and Develop.


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