Starbreeze

PAYDAY 3 was officially released yesterday to all intended platforms. During the first hours of the launch, PAYDAY 3 had a peak of concurrent players (CCU) across all platforms of more than 220,000 and 924,204 unique players (DAU). As the player count increased, the game’s servers were unable to meet demand, and the game was inaccessible from around 21:45

According to Starbreeze’s press release, PAYDAY 3 had close to 150,000 unique players (DAU) during the first 18 hours of early access, excluding PlayStation 5. The company also stated that Starbreeze Nebula currently stands at over 1.6 million registered users.

Yesterday, September 18th, PAYDAY 3 went into early access for the players who bought the silver and gold versions. I had the opportunity to play the game for about 2 hours yesterday on PC and really enjoyed the game. I had no technical issues, and my impression of the game was good.There was, however, some issues with the PS5 version.

We looked at the current valuation levels of listed gaming companies and their growth and profitability forecasts for the coming years. The companies are divided into three groups: 1) Mobile games companies, 2) Console and PC games companies, and 3) Multi-platform games companies, a group of gaming giants. We also briefly review interesting companies in the sector.

With the release date of PAYDAY 3 nearing, our confidence in the game’s success remains. We are particularly encouraged by the positive feedback the game has received and the positive indicators related to the game released by Starbreeze. The biggest question mark surrounding Starbreeze is the medium to long-term future of the company and what level of confidence to assign to any projections regarding the games after PAYDAY 3. However, with the recent decline in share price, we believe the risk-reward ratio has returned to being modestly positive.

In our view, Starbreeze’s valuation already prices in a successful PAYDAY 3 and a favorable outcome for the two games after it. With the release date of PAYDAY 3 nearing, our confidence in the game’s success has increased. We are particularly encouraged by the positive feedback the game’s closed beta yielded and the positive indicators related to the game released by Starbreeze. The biggest question mark surrounds the medium to long-term future of the company and what level of confidence to assign to any projections regarding the games after PAYDAY 3. Therefore, we believe that the risk-reward ratio is quite well balanced at the current valuation, which leads us to a wait-and-see approach.

Starbreeze reported stronger than expected Q2 results this morning, with revenue and operating profit (EBIT) beating our estimates. Revenues were driven by higher than anticipated PAYDAY 2 sales that benefited from Starbreeze’s marketing strategy ahead of the launch of PAYDAY 3. Overall, the messaging from Starbreeze regarding PAYDAY 3 is positive, with good feedback received from the community and gaming journalists & influencers..

Starbreeze will report its Q2 results on Thursday at 7.30 am. We expect revenue to be in line with previous quarters, while we project EBIT to be negative due to increased marketing costs related to PAYDAY 3. Q2 was an eventful quarter for Starbreeze, with the company conducting a rights issue, announcing the release date of PAYDAY 3, releasing three DLCs for PAYDAY 2, and PopReach releasing a licensed PAYDAY mobile game. However, undoubtedly the highlight of the year and the key driver of the stock is the release of PAYDAY 3 on September 21st. Therefore, any information provided regarding PAYDAY 3 is of primary interest when it comes to the Q2 report.

As expected, Digital Bros has now formally requested the conversion of their MSEK 215 loan into B-shares. The number of new shares obtained was lower than anticipated, resulting in a dilution of only 10%. After the conversion, Digital Bros will hold 29.2% of the voting rights and will thus not be required to make a mandatory bid for the remaining outstanding shares.