Starbreeze axes Baxter to sharpen focus on PAYDAY franchise

On Thursday, Starbreeze announced the discontinuation of Project Baxter along with a refined strategy. This represents a major strategic revision, as Baxter had been a central part of the company’s diversification ambitions. Going forward, resources will be concentrated on accelerating the PAYDAY franchise. In the near term, the decision triggers a non-cash impairment of around 255 MSEK in Q3’25 and a reduction of ~44 FTEs. Management expects the lower cost base and reduced investment needs will support cash-flow positivity in 2026. Following the news, we see downward pressure on our estimates and will return with updated forecasts in the coming days.

Despite pouring a lot of investment into the game, Baxter’s remaining investment hurdle was still significant

Considering the communicated budget for the game (~45-50 MUSD) and the announced impairment of 255 MSEK, remaining investments tied to development, marketing, and live-ops/DLC of Baxter to reach launch and sustain engagement remained significant. Our previous assumptions were based on Starbreeze needing to, given the subdued sentiment and performance of the franchise, bring in a partner/co-publisher to alleviate cash needs, at the expense of revenue potential, similar to the PLAION setup for PAYDAY 3. We believe that yesterday’s outcome suggests Starbreeze likely didn’t secure sufficiently attractive publishing terms to proceed (at least not on PD3-like economics), despite earlier indications of strong industry interest, which we believe show a negative signal on publishing appetite in the current market.

We also believe the decision reflects a broader industry trend of increasing risk-aversion. In 2025, we have witnessed that even well-capitalized publishers are pruning new bets and concentrating on proven IP, including EA, Sony, and Avalanche. Against this backdrop, while painful, ceasing Baxter may have been the more prudent choice for Starbreeze at this time, protecting the balance sheet and avoiding unfavorable publishing terms that could have forced equity financing later. We also believe this decision shows the new CEO’s willingness to take difficult decisions when circumstances change.

A narrower, PAYDAY-centered strategy

The revised strategy marks a decisive shift and removes yet another core diversification pillar from our investment case. In Q2, Starbreeze announced it would deprioritize third-party publishing in favor of PAYDAY, internal projects, and work-for-hire. At that time, Baxter was still positioned as a key in-house project. With its discontinuation, PAYDAY now becomes the core growth platform, with PAYDAY 3 evolving into a more scalable live-engagement game through ongoing upgrades, refined player experience, and sustainable monetization. This focus will be supported by two complementary pillars: “Heisting Experiences” aims to broaden the PAYDAY universe with spin-offs and new projects in the genre, while “Special Operations” reflects a more selective approach to work-for-hire that can provide steady cash flow, expand the brand to a wider audience, and support competence development. The plan to grow the PAYDAY 3 team from ~20 to ~50 employees by the end of 2025 underlines how sharply the focus has narrowed to the franchise.

Yet, execution and timing risks remain high, in our view. The challenge is that PAYDAY 3 launched two years ago and has struggled to reignite engagement at scale. Meanwhile, Starbreeze has put limited effort into PAYDAY 2 since, even though the title has held up surprisingly well, arguably benefiting from PAYDAY 3’s shortcomings. There is no guarantee the franchise will deliver a major turnaround, and execution must quickly translate into higher revenue per user and a steadier content cadence to shift the trajectory.

Implications for our estimates and investment case

For shareholders, discontinuing Baxter is a heavy blow, considering around 250 MSEK has been invested in a title expected to diversify the portfolio and generate material revenues from 2026. As such, its removal on its own will drive significant negative revisions to our revenue estimates. In our view, the refined strategy also blurs the outlook of previous ambitions to launch yet another title in 2028, for which we had modelled. On the other hand, a unified operational and financial focus on the PAYDAY franchise should, in our view, improve execution, monetization, and audience engagement, and drive higher revenues versus our prior base case. That said, we feel the long-term outlook is harder to gauge. If Starbreeze is successful in its new strategy, lower costs and reduced capex intensity could support the company’s ambition to be cash-flow positive by 2026. If not, reliance on a single underperforming franchise becomes more acute.

While cost cuts and lower investment needs will offset some of the earnings impact, Starbreeze’s long-term growth trajectory is now narrower, with the investment case resting more heavily than ever on the turnaround of the PAYDAY franchise as a whole, successful development of new “heisting” content, and the ability to secure profitable work-for-hire contracts. We will get back with updated estimates in the coming days.