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Starbreeze tightening the belt after Overkill’s The Walking Dead flounders

Overkill's The Walking Dead Misses Revenue Targets

Starbreeze Studio’s board of directors has announced that revenue projections for Overkill’s The Walking Dead have fallen short of expectations. This means that the company will have to reduce costs over the next year to keep the company running smoothly. The official press release details how the company is delaying reporting some revenue in order to get a clearer picture of their financial state, and then using that as a baseline to restructure the company around. Said revenue delay concerns the licensing fees from 505 Games for Overkill’s The Walking Dead. This $10 million will be delayed until sometime in 2019 in terms of reporting.

“We have initiated a review of our costs to ensure better alignment with our revenues. We are designing a program towards that end, naturally while keeping a careful eye on revenue development. We must focus on our core business and ensure delivery of the company’s important games,” says Starbreeze CFO Sebastian Ahlskog.

Starbreeze projects that their overall earnings before interest, tax, depreciation and amortization (EBITDA) will remain on a positive trajectory for Q4 2018. Heading into 2019 will likely see some changes internally as the studio slashes costs to continue operating on a lower budget. We can reasonably expect a reduction in overall staff numbers, as well as some cutting of any amenities and benefits offered to the remaining employees.

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The company reaffirms their commitment to their existing projects, including The Walking Dead. The company will continue with the “Games as a service” model and use it to monetize the next round of content and updates for the new game.

Overkill’s The Walking Dead is currently available on PC and due to launch onto PS4 and Xbox One next year.

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