Hi everyone! My name is Christoffer Jennel and I’m responsible for analysis monitoring at Starbreeze. Since our forum has now switched to multilingual mode, you can ask me questions and I will participate in the discussion here.
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@christoffer.jennel has given his preliminary comments as Starbreeze reports its Q3 results next week on Tuesday. 
*The quarter is dominated by the announced termination of Project Baxter, which leads to a non-cash impairment charge of approximately 255 MSEK, significantly impacting the reported Q3 result. Without the impairment, we expect the adjusted operating profit to be approximately -4 MSEK, which represents an improvement from the previous year, driven by higher expected revenues and lower normalized depreciations. Revenue growth (37% y/y) is expected to be mainly due to KRAFTON’s work-for-hire partnership, but we also expect growth in PAYDAY-related revenues thanks to the acquisition of full publishing rights. Following the strategic shift to fully focus on the PAYDAY franchise, we are closely monitoring the progress of implementation, the PAYDAY (3
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Here are Jenneli’s quick comments on Starbreeze’s Q3 results.
Starbreeze reported Q3 revenue in line with expectations, but adjusted profitability fell short of our forecasts, mainly due to higher-than-expected depreciations. As expected, the termination of the Baxter project led to a significant impairment, which dominated the headlines. While PAYDAY 2’s revenue surprised positively, PAYDAY 3’s revenue clearly fell short of our forecasts. The report offered limited updates on the implementation plan and future outlook, leaving key questions regarding the timing of accelerating content production and the contract work pipeline still open. We hope to get further clarity on these matters in the earnings webcast, which starts at 10:00 AM CEST.
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And there are no changes in player data for Payday 3, so the promising start at the beginning of the year sharply turned back to its lowest figures… there’s a strong hate (PD3) and love (PD2) relationship towards Starbreeze’s products.
…but Payday 2 shifted to a subscription-based model during that quarter, so is there any information available on how many players have moved to PD2 because of this?
…will a similar thing happen to PD3?
…Payday 3 was previously promised to be converted to UE5 at some point, so now that the Baxter team has stopped, will this move quickly? Especially since Embark Studios, known for Arc Raiders, succeeded in its UE5 optimization, does Starbreeze still intend to implement an engine update?
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Optimization would require expertise, and most of the Payday 2 developers left the company even before PD3’s release. Payday 3 and Baxter paint a grim picture of a company that only destroys its owners’ money without the ability to effectively create quality products. I am still of the opinion that all employees should be laid off and the remaining money distributed to the owners. Nothing will come of this business. The current situation is well illustrated by the fact that Starbreeze’s best employees now work either at Embark or MachineGames.
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There isn’t much to share in the coffers; even those small amounts go purely into running the bureaucracy and finding a party that would then buy the PD license.
I’m just following this with interest… because one doesn’t know yet until the sign is finally on the door.
This is easy to follow when there are 2 games that need to bring money into the company, and one of them is keeping Starbreeze on life support. The other one (PD3) should somehow turn a new leaf.
The larger cash burn at least slowed down significantly when Baxter was discontinued; whether the pace is enough to turn that into a cash flow into the coffers in the future remains to be seen.
And I think that from that UE5 engine, one could try to disguise Payday 3 as version 2.0 with several new maps and other content, to see if this could still create a catalyst in the player base.
In any case, Starbreeze’s prospects are slim.
Hi! Our analyst Christoffer interviewed Starbreeze’s CEO today in connection with their Q3 report. Check it out here, the interview is in English.
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Christoffer and Atte have prepared a new company report on Starbreeze after the Q3 results.
\nStarbreeze reported Q3 revenue in line with expectations, but adjusted operating profit fell short of expectations, mainly due to higher depreciations. PAYDAY 3 revenue was particularly low compared to our forecasts, but this was compensated by the renewed strength of PAYDAY 2 after the introduction of its subscription model. We understand that PD3’s monthly content updates will begin from December onwards, and the company will offer shorter, continuous content plans instead of annual ones. However, visibility into new work-for-hire projects remains limited, and as the KRAFTON partnership approaches completion, we have lowered our revenue assumptions due to timing effects. This, combined with expected changes in the revenue structure and slightly higher depreciations, led to downward forecast revisions. Due to the persistently low player activity in PD3, we believe the company has much to prove before a stronger scenario can be confidently priced in. Given the low absolute valuation, the lack of clear short-term drivers keeps us on the sidelines. We reiterate our Reduce recommendation and lower our target price to SEK 0.14 (previously SEK 0.15).
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