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Updated: Stockholm District Court grants Starbreeze third extension period

Updated: Stockholm District Court grants Starbreeze third extension period

Update - 10/9/2019: Swedish games firm Starbreeze has been granted a third extension to its reconstruction period. 

The Stockholm District Court has said that the company has until December 3rd, 2019, to get its house in order. That's a full 12 months since the developer and publisher first entered reconstruction. 

Original Story - 3/9/2019: Troubled Swedish games developer and publisher Starbreeze is once again trying to extend the time it's allowed to rebuild itself.

In a post on its website, the Stockholm-based firm says it has applied for its third extension to its reconstruction period, with the second running out today (Tuesday, September 3rd). If granted, this will run until December 2019 - a full year since the company's entry into reconstruction in December 2018.

At that point, the firm was given three months to help figure out how to keep the company afloat. The company applied for an initial extension in February 2019 before asking for a second in May.

In that month Starbreeze reported its financial results for Q1 2019/20, with the firm saying that it lacks the funds necessary to guarantee it'll still be around 12 months from then and that it was seeking funding.

The company has been trying to reduce costs and reduce its debts by laying off staff and selling off publishing rights. In June, the company said that it was going to lay off 25 per cent of its then 240-strong workforce.

That was on top of selling its Dhruva Interactive developer to Rockstar Games for $7.9m, as well as the publishing rights for projects including System Shock 3, Dead by Daylight and Psychonauts 2 for $12m, $16m and $13.2m respectively.

"The work with the reconstruction is continuing, full steam ahead," acting CEO Mikael Nermark said in Starbreeze's financial report for the three months ending June 30th 2019.

"As previously mentioned, my number one priority and focus is securing the long-term financing for the company. In the short term, our finances are now secured as we have divested assets belonging to our non-core segment which has generated liquidity taking us to the second quarter in 2020. The work with the long-term financing is on-going with multiple parallel tracks, while we at the same time are negotiating with our creditors.

"As an effect of the refocusing to our core business, game development with own IP, we have now taken actions on most of our non-core businesses. In parallel, we have adjusted the company and its organization for the core business and made the necessary adjustments in headcount, which will have full effect on our cost base during the third quarter. The restructuring of the group to clarify our assets and simplify the legal structure is complete."

For Q2 2019, Starbreeze reported net sales of kr160m ($16m) as well as EBITDA of -kr25.8m (-$1.6m). 


Editor - PC Games Insider

Alex Calvin launched PCGamesInsider.biz 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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