Microsoft picks up Psychonauts 2 publishing rights from Starbreeze

Following news that Microsoft has acquired Psychonauts 2 developer Double Fine Productions, now-former Psychonauts 2 publisher Starbreeze has announced that it assigned the game’s publishing rights to Microsoft in exchange for $13.2 million.

Starbreeze originally picked up the publishing rights for Psychonauts 2 in 2017 with a commitment to invest $8 million in the game's development. 

With that agreement set in stone, Starbreeze has sold off the publishing rights for the last game it had signed on to publish prior to its current financial woes. The company has been facing financial trouble since the underwhelming release of Overkill’s The Walking Dead in late 2018, so much so that it is still in an extended period of reconstruction and laid off 60 members of its staff just last week.

Earlier on in the year, Starbreeze sold the publishing rights to System Shock 3 back to developer OtherSide Entertainment and, later, made a similar deal with 10 Crowns developer Mohawk. Until today, Psychonauts 2 was the last remaining game Starbreeze held publishing rights for.

As of this May, Starbreeze said it lacked the funds to keep the studio open for another year but cost-cutting measures, including the sale of the art production studio Dhruva, staff layoffs, and sale of Psychonauts 2’s publishing rights since that statement aim to avoid that situation.

“As we continue the work of securing long-term financing for Starbreeze, it’s extremely important that we find the best possible structure for the company in the long run," said acting CEO Mikael Nermark in a press release. "Although we see the publishing unit as part of the core business, it is a cash intense business and requires continuous investments to enable the products to be launched successfully. We definitely want to continue being a best in class publishing partner for external studios in the future, but our main focus right now is to secure the continued operations of the internal games development and self-publishing units.”