Starbreeze announced this morning that it has entered into an agreement with PLAION to fully acquire the publishing rights for PAYDAY 3. As part of the deal, Starbreeze has resolved to carry out a directed share issue of SEK 30 million at a subscription price of SEK 0.2235 per share (+15% above the last close). The issue has been subscribed by Embracer Group, the parent company of PLAION. Of the total proceeds, SEK 29 million will be used to repay PLAION under the previous agreement related to PAYDAY 3, thereby settling certain outstanding claims. The share issue will result in a dilution of approximately 9.1% of the total shares and 5.4% of the voting rights.

With Starbreeze now owning full publishing rights to PAYDAY 3, the previous revenue-sharing model with PLAION will be discontinued. This means that a greater share of game-related revenues will accrue to Starbreeze. However, the company will also take on more of the associated costs. While this increases exposure to risk, it also improves the game's profitability potential, if assuming performance remains stable or improves.

According to Starbreeze, the agreement allows for accelerated content development and broader business opportunities for the PAYDAY franchise, opportunities that were previously more limited. Although this does not necessarily require increased in-house investment, we believe it makes the PD3 project more attractive from the company’s standpoint, as Starbreeze will now have greater freedom to shape the game's future direction.

Our initial reaction to today’s announcement is mixed. On the one hand, gaining full control of PAYDAY 3 could be beneficial for the company as it offers greater agility and decision-making freedom. On the other hand, the increased financial and operational risks could be a negative factor if the game's performance continues to falter. Additionally, while we view the addition of a reputable shareholder like Embracer to be positive, the dilution, giving up nearly 10% of the company’s equity to finance the transaction, is somewhat excessive in our view. That said, we will get back with an update to our forecasts in the near future.