Starbreeze AB (publ) Half Year Q2 Report April 1 - June 30 2016

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The full Q2 report is available at Financial statements in English are available at the end of this document.


Note that in accordance with the decision taken on the Annual General Meeting in November 2015, this is the second quarterly report after changing the company’s fiscal year to calendar year. The comparative period Q2 2015 corresponds to April-June 2015, previously named Q4 2014/2015.

The next report to be issued will thus be Q3 2016 and will be released on 24 November 2016.


  • Net revenue amounted to SEK 102.6 million (SEK 71.9 million), an increase of 43% compared to the second quarter last year. Total revenue amounted to SEK 143.6 million (SEK 92.5 million).
  • During the quarter, PAYDAY 2 revenue amounted to SEK 62.6 million (SEK 71.1 million) of net revenue, whereof SEK 19.9 million is attributable to extraordinary items.
  • During the quarter, Dead by Daylight revenue amounted to SEK 39.9 million (SEK 0.0 million) of net revenue.
  • Operating income before depreciation and amortization, EBITDA, amounted to SEK 27.5 million (SEK 11.9 million), implying a margin of 19.1%.
  • Pretax income amounted to SEK 27.5 million (SEK 11.1 million).
  • Net income amounted to SEK 21.3 million (9.5 million).
  • Earnings per share before dilution were SEK 0.09 (SEK 0.04) and earnings per share after dilution were SEK 0.09 (SEK 0.04).
  • Cash flow from operating activities amounted to SEK -41.8 million (SEK 5.7 million).
  • As of June 30 2016, the cash balance amounted to SEK 328.4 million (SEK 110.6 million).


  • Net revenue amounted to SEK 143.4 million (SEK 119.6 million), an increase of 20% compared to the same period last year. Total revenue amounted to SEK 210.2 million (SEK 153.9 million).
  • Operating income before depreciation and amortization, EBITDA, amounted to SEK 23.2 million (SEK 25.9 million), implying a margin of 11.0%.
  • Pretax income amounted to SEK 12.5 million (SEK 21.9 million).
  • Net income amounted to SEK 6.5 million (17.6 million).
  • Earnings per share before dilution were SEK 0.03 (SEK 0.08) and earnings per share after dilution were SEK 0.03 (SEK 0.08).


  • In April Starbreeze, together with the Canadian studio Behaviour, announced the release date for Dead by Daylight and that pre-order was available on Steam from the day of the announcement.
  • In May, at the film festival in Cannes, Starbreeze announced its first internally produced cinematic Virtual Reality experience titled “Cockatoo Spritz” directed by Stephane Barbato. Cockatoo Spritz dives into the film world and presents the new medium from a cinematic perspective. It is a VR experience designed to inspire creative filmmakers to create VR content.
  • In connection with the Cannes Film Festival Starbreeze and Acer signed a letter of intent to form a joint venture for the StarVR Virtual Reality (VR) Head-Mounted Display (HMD). The two companies aim to cooperate on the design, manufacturing, promotion, marketing and sales of the StarVR HMD to the professional- and location-based entertainment market.
  • In May IMAX chose Starbreeze as partner for its investment in location-based Virtual Reality. Both parties have signed a letter of intent to form a joint venture with the intention of creating a concept for location-based VR experiences under the IMAX brand. The companies will be equal partners under the agreement. If the project is successful, the intention is to roll out the concept globally.
  • Starbreeze and Smilegate signed a letter of intent in May to form a joint venture for a virtual reality (VR) content distribution platform for the StarVR Head–Mounted Display (HMD). The two companies aim to cooperate on developing and promoting the platform for distribution of electronic entertainment content for the StarVR HMD.
  • In May Starbreeze announced its agreement with 505 Games to acquire the full rights to the PAYDAY games. The consideration for the acquisition amounts to 10.9 million B-shares in Starbreeze, equivalent to 30 MUSD (approx. 249 MSEK). In June, shares were issued in accordance with the mandate given by the AGM on 25 May. The deal was closed in June.
  • In May Starbreeze announced its acquisition of the intellectual property (IP) rights to the entire Cinemaware library of titles from CW Entertainment USA LLC D/B/A CINEMAWARE, including titles “Defender of the Crown” and “Wings”, for a total consideration of 525,000 EUR in cash.
  • At the annual E3 trade fair in June Starbreeze and the Croatian studio Lion Game Lion together showcased RAID: World War II. It was the first time the game was shown to the public and a short video teaser was released simultaneously. Starbreeze also showcased the newly released Dead by Daylight together with Behaviour.
  • In June Starbreeze announced that Dead by Daylight had sold more than 270,000 units, one week after release, subsequently recouping Starbreeze development cost and beyond. The game has now sold more than 1,000,000 units.
  • In June Starbreeze announced its acquisition of the French toys-to-life, VR and AR technology company ePawn. The acquisition is made through an issuance of shares for a value of EUR 4.0 million (SEK 37.8 million) and through EUR 1.5 million (SEK 14.2 million) in cash.
  • With ePawn Starbreeze significantly diversifies its VR and toys-to-life offering. Starbreeze also receives a strong patent portfolio that will be of great benefit to the company for years to come. Starbreeze sees great opportunities in combining VR- and AR gaming experiences with ePawn’s game boards and carpets.


  • In July, revenue for PAYDAY 2 sales via the PC platform Steam amounted to SEK 9.3 million (SEK 4.9 million). Note that Starbreeze, after the changed terms of the contract with 505 Games, now receives 100% of revenues generated by Payday 2 on Steam. In July 2015 Starbreeze had a 50/50 revenue split with 505 Games.
  • In July, revenue for Dead by Daylight sales via the PC platform Steam amounted to SEK 24.2 million (SEK 0.0 million).
  • Starbreeze has come to an agreement with Smilegate Holdings Inc., the holder of the convertible bond of SEK 215 million that was issued in February 2016, to make some changes in the terms to clarify Starbreeze finance and financial reporting, and ultimately support future partnerships and additional funding. Besides that some terms are replaced with warrants the agreed changes are of technical in nature and does not change the original commercial agreement.
  • The convertible bond that was issued to Smilegate got restructured in August without changing the economic relation between the two parties. The restructuring was done by replacing certain loan covenants with warrants. The change, which is of a purely technical nature was conducted by the Board’s mandate from the AGM. To restore this mandate, the Board has decided to, through an EGM, seek a renewed mandate to issue new shares equivalent to 10% of the share capital. Also, negotiations regarding the convertible loan with Acer was completed in August. The Board therefore found it appropriate to submit this decision to the EGM.



Starbreeze closes its second quarter at all-time-high net revenues of 102.6 MSEK. We have now broadened our revenue base to also include revenues from our first game launched as a publisher, Dead by Daylight, contributing with 39.9 MSEK to our top line. We are super proud about how we’re converting plans and initiatives into real revenues.


At the big entertainment show E3 in Los Angeles in June, we released our first publishing title, Dead by Daylight, on Steam. In less than two weeks, we announced that we had sold more than 270,000 units and thereby recouping Starbreeze part of the development costs. As of today, both Starbreeze and developer Behaviour have fully recouped their investment, and beyond, in Dead by Daylight and the game has now surpassed an impressive number of 1,000,000 million units sold.

We’ve received great feedback from the community and both companies have been committed to pushing updates to the game in response. As always, we follow our main pillars for games development; we look to make the games focus on gameplay first, that they are entertaining with friends and are re-playable for longevity. Those are key values which we are also looking to impart to our partners. We’re looking forward to keep Dead by Daylight relevant and already on 18th of August we released our first free downloadable content to expand the game.


We continue to show our ability to execute on strategic deals. This quarter we acquired the outstanding rights to the PAYDAY games giving us full control of any future developments or commercialization of PAYDAY 2 and PAYDAY for mobile platforms. The deal brought extraordinary revenues of 19.9 MSEK during the quarter and changes our revenue structure from the game.

In addition, we restructured the convertible loan that we have with Smilegate, resulting in a positive extraordinary item on our financial net of 7.5 MSEK and more importantly, improving transparency of our financial reporting

Starbreeze will continue to make strategic deals as we leverage our deep knowledge of exploring intellectual property as a means to build out a full ecosystem of gaming.


Our ultimate financial goal is profitable growth, something that is far more difficult to achieve than to preach. We report a growth in net revenues of 43% and an EBITDA reaching 27.5 MSEK or 19.1% of total revenues. Despite extraordinary items, the numbers still show that PAYDAY 2 is generating revenues, three years after its release, and that Dead by Daylight significantly contributes to our top line and profitability.

I am convinced that we are on the right track for the future, as evidenced by the welcoming reception of Dead by Daylight among gamers. And with PAYDAY not only still showing to be a strong revenue generator but also a repeatable model as shown with Dead by Daylight, I am confident that our next big release RAID: World War 2 from our partners Lion Game Lion will further solidify the Starbreeze business model.

Our liquidity remains in good shape with a solid cash balance of 328.4 MSEK when exiting the quarter, making us well equipped to continue our expansion of the company.


Last quarter we proudly noted the first step on our path of building the next generation digital studio and immersing ourselves into VR with our Acer collaboration. Shortly after the last quarterly report, we reached two more significant agreements; one with IMAX for our location-based VR initiative and one with Smilegate for a content distribution system especially tailored for VR. All initiatives are set up as joint ventures and our StarVR headset is the crown jewel connecting the dots. We’re hard at work setting up each of these separate organizations to ensure the future success of our VR initiatives.

The acquisition of the French technology company ePawn neatly adds another dimension to our ecosystem as well and diversifies both our toys-to-life and VR offerings. We can’t wait to put the technology to use in our VR centers and elsewhere in the future.


As we evolve our business, so must our organization. Our presence in Los Angeles is now more important for our VR and business development teams than ever. LA being the entertainment and VR hub of the western world, the home to our pilot IMAX VR Center and with its proximity to Silicon Valley, is now a true base of operations for our technical- and business development-teams. The investment we’ve made in both the office and the people has been crucial to our continued success and have paid off several times over.

As we progress the company, we’re optimizing the use of our resources and are refining every aspect.  In LA the VR team is being transformed from a prototype team to a developer relations and research and development team. To head this effort we have made a key recruitment in Brooks Brown, our newly appointed Global Director of VR. Brooks have had many successful years in the gaming industry with Lucas Arts, as well as leading digital development at James Cameron’s Lightstorm during the past few years. With his extensive entertainment experience, he will be a great asset to Starbreeze continued success.

With an increase of team size for VR production of John Wick and for OVERKILL’s The Walking Dead the development of these are moved to Stockholm where we add another 1,500 square meters of office space to make room for our new co-workers.

While production of our games are running on track, we’re continuously evaluating the best go to market strategy for Geminose and looking to maximize the impact of John Wick in VR.

Last but not least I would like to thank our great team for working hard and dedicated to bring us to success. Starbreeze is made up of many great people and is not a simple machine. With all our new developers on board we feel very confident about our future building the next generation of entertainment.

Let’s do this! ###

This information is information that Starbreeze AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act.

The information was submitted for publication, through the agency of the contact person set out below, at 08:30 a.m. CET on 25 August, 2016

For more information, please contact: Starbreeze Investor Relations Contact: Maeva Sponbergs, +46 (0)8 209 208 or