Starbreeze Studios

Founding and merger

The company was founded by Swedish programmer Magnus Högdahl. Högdahl was a former member of the PC demoscene group Triton, and specialized in making tech demos. He decided to leave the company after his project, an action role-playing game named Into the Shadows, was cancelled. He then decided to found his own studio and began crafting his own game engine. He actively recruited staff among his acquaintances and the studio was officially established in 1998 in Härnösand, Sweden.

Högdahl serving as the company's head and tech lead, was responsible for creating a new game engine for future games, and looking for publishers willing to help publish its games. At that time, the company had only about five employees, and had created a prototype for a video game and pitched it to publishers at E3 1998. Gremlin Interactive agreed to publish the game, and the deal was finalized in late 1998. The company grew to have roughly eleven staff members. The game was a first-person action role-playing game named Sorcery. With a high fantasy setting, the game featured 3D visuals and its gameplay was similar to that of Diablo and Quake. However, Gremlin Interactive was acquired by Infogrames in 2000 and the partnership with Starbreeze dissolved, resulting in the game's cancellation.

O3 Games was founded by Lars Johansson, who also worked at a demoscene company. Its first game was The Outforce, a real-time strategy space game that was released in 2000 and subsequently became a success for the company. O3 needed to expand so that it could continue video game development. After Sorcery's cancellation, Starbreeze ran into financial difficulties. Unable to support itself financially, Starbreeze needed to merge with another developer to continue in business. The two companies discussed a merger in Uppsala and merged shortly afterwards, retaining the name Starbreeze Studios.

Post-merger

After the merger, the company began working on Enclave, a medieval fantasy, multiplayer-only video game inspired by Team Fortress. The game also became the company's first project with international appeal, enabling Starbreeze to partner with various publishers including Swing Entertainment, Conspiracy Entertainment, and Vivendi. However, Swing Entertainment faced bankruptcy at that time, and decided to turn the game into a single-player action-adventure video game with the goal of sending it to market as soon as possible. The game was released in 2002, and Starbreeze had to lay off staff after its release. Enclave II was also in development. The sequel was said to feature a more elaborate story, 28 different maps, 10 playable characters, and an improved fighting system. However, these features were axed when Starbreeze got into legal troubles with the publisher, resulting in the game's cancellation. Another game, Knights of the Temple: Infernal Crusade, was successfully released with help from publisher TDK Mediactive. However its sequel was shifted to another developer. Starbreeze attempted to acquire another studio, Rock Solid Games, but the agreement between the two fell apart and brought both companies financial problems.

Another project being worked on by Starbreeze at that time was The Chronicles of Riddick: Escape from Butcher Bay. Set in the The Chronicles of Riddick movie universe, the game was published by Vivendi. The team took inspiration from films such as Escape from Alcatraz and video games such as GoldenEye 007 and the Tom Clancy's Splinter Cell series. However, the company was downsizing due to its financial problems and the number of employees dropped from 80 to 25, and the entire development team moved away from the main Starbreeze floor to prevent it from being affected by low morale, and to allow it to focus on the game's development. The game enjoyed an 18-month development cycle, which was significantly longer than typical licensed games. A PlayStation 2 version of the game was also in development, but was ultimately cancelled as the then head of Vivendi's publishing division, Michael Pole, ordered its cancellation to "make his mark". Universal Motion Pictures intervened and kept the game's Xbox version. Escape from Butcher Bay received critical acclaim upon its launch, with many critics regarding it as one of the best licensed games ever made. Its gameplay element including the puzzle-solving mechanics, the stealth segment, and its ahead-of-its-time visuals, also received praise from critics. Despite receiving critical acclaim, it was not a commercial success for Starbreeze.

After the release of Escape from Butcher Bay, Starbreeze again encountered financial difficulties after having not received a significant royalty payment from Vivendi. It sold part of its motion capture and animation department to a British company, Centroid. However, the game helped set Starbreeze's reputation as a studio capable of making good licensed titles. With the help of Union Entertainment, an intermediary company, Starbreeze signed an agreement with Majesco Entertainment for a new title set within the The Darkness universe owned by Top Cow Comics on July 16, 2004. Midway through the game's development, Majesco underwent restructuring because of financial difficulties, shifted its focus, and dropped the game. 2K Games stepped up and acquired the publishing rights. 2K extended the game's development cycle, and asked Starbreeze to develop a multiplayer mode for the game. The Darkness was released in 2007. It fared worse than the team expected critically, but its commercial performance was satisfactory, selling more than 1 million copies worldwide.

After working on two different licensed games, the team intended to develop its own games. A game named Kano, involving mind-reading, was started but was never completed. After the release of The Darkness, the company signed a two-project contract with Vivendi. One of the games was a new property known as Polaris. The game was set in a post-apocalyptic environment. Players were tasked to overcome snowstorms, and defeat terrorists and monsters cooperatively with other players. Vivendi was not convinced the game would succeed and adjusted the contract to a remake of Escape from Butcher Bay, The Chronicles of Riddick: Assault on Dark Athena. Vivendi originally named the game Riddick 2 but Starbreeze disagreed claiming the name would raise expectations among gamers that the remake might not be able to deliver. Vivendi's subsidiary Sierra Entertainment was set to publish the game. After the merger between Activision and Vivendi, the new company began streamlining Vivendi and put the game, along with Brütal Legend, and Ghostbusters: The Video Game up for sale. Atari eventually acquired the publishing rights and the game was released in 2009.

2010—onward

Starbreeze then partnered with Electronic Arts for two different games, one was known as Project Redlime, while the other was an action-adventure video game set within the Bourne universe. The Bourne game was cancelled as a direct result of Matt Damon and director Paul Greengrass not participating in the fourth Bourne film. Project Redlime had a larger scale than the Bourne game. It was said to be a reinvention of one of Electronic Arts' franchises. The company shifted from a technology-orientated company to focus more on the core gameplay mechanics of their new project. Syndicate was announced in September 2011. The game suffered from a troubled development, with Starbreeze completely reworking the game one year after its initial development. There were also many creative differences between the developer and the publisher, and the two companies suffered from an inharmonious relationship. During the game's development, seven senior members of the company, including Högdahl, left to form their own smaller studio. Some of them formed MachineGames to work on their own original games. With a budget that was less than other typical AAA video games, Syndicate received average reviews and was a commercial failure. Grefberg left the company after the game's completion, and 25 employees were laid off.

Many employees left Starbreeze when MachineGames recruited. Then CEO Johan Kristiansson also stepped down, and was replaced by Mikael Nemark. Nemark took the studio in a new direction. Besides focusing on AAA video games, it would also allocate resources to develop smaller, downloadable games in order to broaden the company's portfolio. These new games would no longer use the engine created by Högdahl. In 2011, Starbreeze announced that it was partnering with Epic Games to use their engine, Unreal Engine, for their first small titles. In 2012, Starbreeze announced Cold Mercury, a free-to-play video game and a project codenamed P13. Prior to that, Josef Fares, an award winning Swedish director, had been unsuccessfully pitching game ideas to several Swedish developers. Starbreeze was in need of new, original properties, and accepted Fares' pitch. P13 later became Brothers: A Tale of Two Sons. Focusing on creating an emotional and "personal" experience, Starbreeze partnered with publisher 505 Games to publish the game. It was released in 2013 to critical acclaim and received numerous awards and accolades. The rights to the Brothers intellectual property was later acquired by 505 Games in 2015. After the success of Brothers, Fares announced that he had established a new studio named Hazelight and is working on a project with Electronic Arts.

In 2012, Starbreeze also announced that they had acquired Overkill Software, the developer of Payday: The Heist, granting them rights to all of Overkill's propriety technology and intellectual properties. At the time, Overkill was working on the sequel, Payday 2, a game that was set to "broaden the Payday template". The game was a massive commercial success, and was profitable from pre-order sales alone. Payday 2 also became Starbreeze's best selling game of all time, and helped the company to make a record profit for the first time after suffering an accumulated loss of $14.4 million between 1998 and June 2013. The game's success also prompted publisher 505 Games to invest $5 million in Starbreeze in March 2015 to continue to improve and develop additional content for Payday 2 over twenty months. The game was ported to PlayStation 4 and Xbox One under the title Payday 2: Crimewave Edition.

Starting in 2014 the company began broadening its business. On 25 September 2014, Starbreeze Studios announced that they had acquired a Los Angeles-based studio called Geminose for $7 million. The studio is currently working on a toys-to-life game. In May 2015, Starbreeze announced that the company would start publishing video games from independent developers. The first independent title set to be published by Starbreeze is Raid: World War II, an upcoming four-player, World War II shooter, being developed by Lion Game Lion. During E3 2015, Starbreeze Studios announced Project StarVR, a virtual reality headset, which is currently under development by InfinitEye, a firm acquired by Starbreeze. The company also acquired Payday Productions and the film rights to Payday in July 2015. In terms of projects, Starbreeze subsidiary Overkill is working on Overkill's The Walking Dead, which is set to be released in 2017 with the help of publisher 505 Games, and Storm, which was merged from Starbreeze's own Cold Mercury. Starbreeze is also set to publish a John Wick game developed by WEVR and Grab for virtual reality platforms. The core Starbreeze team also received investment from Korean publisher Smilegate to develop a new first-person cooperative game set within the Crossfire universe. Starbreeze also announced that it will be publishing Dead by Daylight, an asymmetrical, multiplayer, survival horror game developed by Behaviour Interactive.

On 30 May 2016, 505 Games announced that it had sold the Payday franchise and intellectual property to Starbreeze in exchange for US$30 million worth of stock. Starbreeze also announced that they had acquired the name and the franchises of Cinemaware a day later.On 16 December 2016, the company acquired a 90.5% controlling stake in Indian-based Dhruva Interactive at a price worth $8.5 million

The studio has engaged in two separate "publishing-only" investments to help publish Psychonauts 2 and System Shock 3 for $8 and $12 million, respectively. In both cases, the respective developers, Double Fine Productions and Otherside Entertainment, retain all intellectual property rights, while Starbreeze seeks full recovery of their investment and a small amount more from revenues, after which they share further revenues with the developers.

Philosophy

According to Starbreeze, the studio both develops and produces intellectual properties and licensed projects which allow it to have creative control. According to Starbreeze's CEO Johan Kristiansson, in 2008 the company did not wish to recruit numerous employees because of the time that is needed to integrate them into the company. After the 2012 departure of many employees, and the disappointing commercial sales of Syndicate, Mikael Nermark, the company's CEO, decided to shift the company's focus from producing standard licensed games to creating new and original intellectual properties. He stated that he believed strongly in Starbreeze's ability to make games that are more than typical AAA games, and that its employees would consider making games their "daily work", taking ownership of their projects.

As an independent company, Starbreeze believes that in addition to developing AAA games, it must develop some smaller-scale projects like Brothers: A Tale of Two Sons, or free-to-play games like Cold Mercury to survive. Nermark added further that he is confident that the studio is capable of bringing its "style" and business model to all genres and that gameplay innovation is one of the most important elements when developing a game.