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Starbreeze sheds publishing rights for System Shock 3

Overkill's The Walking Dead Misses Revenue Targets

So it turns out that Starbreeze is still having trouble. The company admitted to selling off the publishing rights for System Shock 3 to another company, in this case it’s OtherSide Entertainment.

The company published a statement on its website indicating the change. Starbreeze’s acting CEO, Mikael Nermark, said that the decision was ‘mutually agreed’ between both parties, and that it was the ‘best solution’ for Starbreeze. All of this comes after a really rough 2018 for the publisher. Starbreeze had major financial instability following the dismal response to their latest game, Overkill’s The Walking Dead. The game sold so poorly that it forced the company to file for reconstruction and to institute a lot of cost-cutting measures to keep the lights on.

Things only went from bad to worse as time went on, as Swedish authorities raided the offices of the company in Stockholm in response to allegations of insider trading. From these developments, it appears as though the situation is still pretty unstable, and this new development is part of a plan to bring in more cash to keep the studio above water. It’s also partially an admission that the System Shock property would be better served with a more stable and successful publisher.

The two companies entered an investment partnership in 2017 with Starbreeze agreeing to put $12 million into the developer to work on the new game in the iconic sci-fi franchise. The deal also came with terms that allowed Starbreeze to turn a profit, as we’ve detailed below.

Starbreeze will be able to recoup 120% of its full investment including marketing costs. Starbreeze share of revenues will become 50% after the investment is recouped. OtherSide Entertainement will retain 100% of the intellectual property relating to System Shock 3.

The sale of the rights will allow Starbreeze to forego additional costs as well as return the costs they’ve sunk into development thus far. It’s sad to see these things happen, but with the situation at the publisher, something had to give, and that something was likely foregoing any additional expenses on a project possibly years out from release.

If this news causes you to be concerned about Starbreeze’s other projects, don’t be. The company still holds the publishing rights for Double Fine’s Psychonauts 2 and Mohawk Games’ 4X game Ten Crowns. These two properties should help turn things around for the Swedish publisher in the future, at least that’s the hope. As for System Shock 3, the game currently has yet to attract a release date.

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