E3 2019 - Starbreeze sells Psychonauts 2 publishing rights to Microsoft for $13.2m

E3 2019 - Starbreeze sells Psychonauts 2 publishing rights to Microsoft for $13.2m

Games giant Microsoft has bought the publishing rights to Psychonauts 2 from troubled Swedish developer and publisher Starbreeze.

This follows the house of Xbox snapping up beloved adventure game developer Double Fine, with Starbreeze revealing on its investor relations page that the Big M has handed over $13.2m for the publishing rights to that studio's next game.

Starbreeze acquired the publishing rights back in February 2017, committing to spend $8m on Psychonauts 2' development, publishing and marketing. So it looks the firm has turned a $5.2m profit from the deal.

“As we continue the work of securing long-term financing for Starbreeze, it’s extremely important that we find the best possible structure for the company in the long run," acting CEO Mikael Nermark said.

"Although we see the Publishing unit as part of the core business, it is a cash intense business and requires continuous investments to enable the products to be launched successfully. We definitely want to continue being a best in class Publishing partner for external studios in the future, but our main focus right now is to secure the continued operations of the internal games development and self-publishing units."

Though Starbreeze is still looking into long-term financing to secure its future, this deal could place the troubled Swedish games firm back in the black. For the first quarter of 2019 - the three months ending March 31st - Starbreeze reported a net loss of $17.7m.

The firm announced it was cutting a quarter of its staff by November 2019 - saving it around $3.8m per year - and that it had sold its Indian Dhurva studio to Rockstar Games for $7.9m, a deal that will close by September 2019.

Axing 25 per cent of staff this year didn't stop the board of directors and its chair being given a pay rise, however, something Starbreeze says is appropriate due to the taxing nature of heading up the company right now.

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.