Sweden’s Starbreeze Studios made its name as the publisher of games such as Pay Day, Pay Day 2, Dead by Daylight, Brothers: A Tale of Two Sons. And now the company is also expanding into virtual reality hardware with its StarCade headset.

Built in partnership with Acer, Starbreeze is providing high-end VR technology to IMAX, the high-end movie theater chain, for location-based VR entertainment centers at IMAX theaters.

While other companies are becoming more cautious about VR because of the “gap of disappointment,” Starbreeze is forging ahead with its “crazy” plan of making its own VR hardware for arcade experiences, said Starbreeze chief technology officer Emmanuel Marquez, in an interview with GamesBeat.

It has created VR titles based on the John Wick and The Mummy movies, and it has a lot more such experiences in the works. One of the outcomes from the VR experiments is that Starbreeze has discovered a new kind of audience for VR, beyond the hardcore gamers, in the form of social VR fans who like playing with their friends outside of the home.

Marquez spoke at the Gamelab event in Barcelona, Spain, last week. I interviewed him at the event as well. Here’s an edited transcript of our interview.

Above: John Wick Chronicles is one of Starbreeze’s forays into VR with Lionsgate.

Image Credit: Starbreeze

GamesBeat: What’s your talk here at Gamelab about?

Emmanuel Marquez: I’m going to explain how I see VR, how to grow success and stay in the market for a long time, why it’s difficult nowadays for game companies to make money on VR, and how it’s going to be successful in the long run. That’s the goal of my discussion. I also want to talk about how the Spanish market is reacting to VR, how much passion is there. I see Starbreeze as an incubator and publisher for VR that can help some of the market develop.

GamesBeat: What’s the history of Starbreeze?

Marquez: Starbreeze is a Swedish company that was created in 1998. It’s a public company since 2001. Today we have 550 people working for Starbreeze all over the world at eight offices – Stockholm, Paris, San Francisco, Los Angeles, India, Taipei, a little office in Barcelona, actually. I’m the CTO. Technically I’m based in L.A., but really I’m based in a plane.

GamesBeat: What have been your biggest games so far?

Marquez: Starbreeze has been around a long time. We did Riddick and a lot of games like that. But our most successful game today is Payday 2, with 15-17 million players. We did the third-highest concurrent player peak of all time on Steam two weeks ago. We call it a game as a service, because the way we developed it, we made the game, brought it to market, and now we bring out new content and evolutions every month. We have a lot of base game installs, but more than that, we have a lot of DLC sales over time.

We’re also developing on contract. We’re working on the Walking Dead and CrossFire. We have the license for CrossFire and we’re working with SmileGate on a spin-off. It’s a trial we’re working on with them. It’s a good relationship. SmileGate made an investment in Starbreeze. We’re also developing and publishing a lot of other titles. We’re about to release a game like Payday in World War II called Raid, by a studio in Croatia.

I’d say that Starbreeze is a publisher today, with its own IP and a very specific way to work with its own community, which is pretty large. We have 5 million people in our community on Steam, the biggest Steam community nowadays.

Above: Starbreeze plans a StarCade VR arcade.

Image Credit: Starbreeze

GamesBeat: What kind of platforms are you focused on?

Marquez: Our platform focus is on PC, but we’re also working on console. We just announced Payday for Switch. Obviously we’re doing a lot of VR as well. We’re working on our own hardware, Star VR, which is fairly crazy for a company like us.

GamesBeat: This is for the big arcade and location-based VR?

Marquez: I think we’re one of the biggest players in location-based. We have a headset dedicated to it. But moreover, we develop titles specifically for the arcades. We have partners for distribution, like IMAX VR. If you go to IMAX VR in New York or Los Angeles, you can play Starbreeze titles with our own hardware and everything. One is John Wick and the other is The Mummy. We have more titles coming down the pipe that we’ll be delivering to arcades.

GamesBeat: What do you think distinguishes Starbreeze from other publishers?

Marquez: We like to say we suffered from traditional publishers for a long time. We were a work-for-hire company. You wake up at dawn and work all day and almost die and somehow you survive. We like to own our own IP. We’re also a very digital publisher. We make very simple and clear deals when we publish titles for people.

The biggest title we’re publishing is Psychonauts, the next one. We also have System Shock. That’s a big publishing project. These guys came to us because we have a lot of new ways to publish digitally. We still do retail with 505 and other partners, but we’re really digital-focused. We understand, as a publisher, what it means to have the creativity and competency to own your own game. We’re the typical publisher that’s constantly trying to influence a game. We let developers work. We have a clear model. If they succeed, we share that too.

Above: The StarVR headset from Starbreeze.

Image Credit: Starbreeze

GamesBeat: The industry needed some simplicity, do you think?

Marquez: For sure. Developers need straighter deals. They need to own their own IP, own the soul of their games. We don’t ever own other developers’ IP. We own our IP, our publishing partners own their IP. We just help them bring their games to our communities. That’s what matters. User acquisition today in the digital market is very expensive. We do all of that. We have a very specific way of doing marketing for games.

Our first publishing project was Dead by Daylight. That was very successful. We just released it on console, and we’re in the top three in sales on both Xbox and PlayStation. We’re showing the market that we know how to publish today.

GamesBeat: Dead by Daylight did well on Steam at first, right?

Marquez: Exactly. We started out on Steam and then we went to console. We might release some games on all platforms at once if we can. Dead by Daylight is a fun PC game, but it’s really good on console. That’s my personal take, anyway. We’ll see what players think.

GamesBeat: When I went to E3 there was so much focus on big triple-A games. Activision showed only two games. EA had eight. Everyone points out that EA published 60 games in 2008. What do you think has happened there?

Marquez: I think they lost too much money on too much crap. It’s difficult to make 60 games successful at once. People understand that it’s better to have eight really good games than see 90 percent of your pipeline failing. It’s a lot of effort, a lot of support, marketing costs. People would rather refocus on what works. It’s the same as the film industry. They find something that works and they focus on that franchise. The reverse issue is that it kills the creativity to create new things. A big publisher like Ubisoft repeats and repeats itself. That comes with a price. But they’ve developed some things that are interesting.

GamesBeat: Fig’s CEO was talking about this as well. He talked about how you had the tentpole strategy where one big game supports a lot of experiments. Now it’s just the one big game and no more experiments.

Marquez: But you know, there’s also direct distribution nowadays. A lot of little games simply go it alone with another kind of publishing. They don’t go to big publishers so easily anymore. You don’t have to do that.

Above: Emmanuel Marquez of Starbreeze speaks at Gamelab in Spain.

Image Credit: Gamelab

GamesBeat: It’s as if you guys have become the rest of the tent.

Marquez: Kind of, because we don’t follow their path. For example, with CrossFire, SmileGate owns the IP, but it’s not just a publishing deal, or just work-for-hire on our part. SmileGate invested in Starbreeze. They’re interested in our overall vision, not just in the one CrossFire title.

GamesBeat: Does it feel like there are enough double-A titles out there coming that you can enable?

Marquez: The thing about delineating between triple-A or double-A or whatever—do you judge that by sales, or quality of art, or what? What makes a successful game? Is Dead by Daylight triple-A? Because it’s been as successful as something you’d easily call triple-A. I think this classification is a bit dead. I understand what it means – how much you invest in a game and how much return you expect on that – but I don’t know if this model is always still valid. It’s probably valid when it comes to very big franchises, but there’s room for a lot of other things that make as much money as triple-A games, with way less investment. What I want is just for people to have fun.

GamesBeat: How do you prevent that 90 percent failure rate?

Marquez: We work with people we trust. They trust us to be able to bring what they do to our community. We keep an eye on what they do and give them feedback, obviously, but we leave their capacities—when you work with Warren Spector, people like that, you expect them to shine. They should be able to do that themselves.

Also, sometimes you just have a feeling. When we saw Dead by Daylight we instantly thought, “Wow, that’s so fun.” From day one. Sometimes you know it’s going to be successful. When you’ve been in the market for 25, 30 years, you have enough experience. I’m on the tech side, of course, so publishing isn’t my particular forte.

GamesBeat: When it comes to games as a service, if you have a few of those that are successful, that provides a base.

Marquez: It reduces the risk. You release a game at a certain stage, at a certain size, at a certain cost. Then you know if the community gets it. You look at pre-orders. You quickly see how it evolves. Then you decide if you do more content or not. You don’t risk the whole—the problem is, if you take five years to make a game for $48 million, then you’ve bet your life. If it fails, you’re dead. Our approach is less risky.

GamesBeat: With games as a service, what do you feel is the right level of updating?

Marquez: It depends on the game, and the size of the updates you give. We talk to our community constantly and we listen to what they want and when. Some people may say they want content every week, but then they don’t have the money to buy new things every week. You need to have a certain amount of quality to deliver. It’s a complex equation. Being a game as a service means listening to your customers and delivering what you want.

Sometimes you fail. We’ve failed and delivered things our community didn’t want. Then you have a big battle over it. But the good thing is that you get better and better at it, up to a stage where you can reliably please your community. That’s what matters. You want people to stay and be happy with you.

GamesBeat: What are your thoughts on VR?

Marquez: We’re doing Star VR. Since day one I knew it would be difficult to install VR in the home. We all know why. It’s expensive. You need space. It’s difficult to set up. It’s for geeks. When I created Star VR as a piece of hardware at Starbreeze—first of all, I did it because we believe in content, and I knew we could develop at the same time. We always planned to go for the arcades. I envisioned the console model. Console games grew out of the arcades. People played Pac-Man in cafes for years before consoles ever became successful as something everyone had at home. I think VR will follow the same path.

What VR has beyond the arcades is that it can also be part of esports. We have a project called Storm, which for me is the ultimately goal of VR, the ultimate immersion. That’s what game providers do, create immersion. You can go to a center and play and get immersed completely, a full-body experience, playing something like Payday. But we also want to attach the normal Payday game to what you play at the arcade, so people can go back and forth between two experiences that are attached to the same world.

Above: Emmanuel Marquez believes that VR will be a big market in the long run.

Image Credit: Gamelab

GamesBeat: Are you worried about this gap we’re in with VR?

Marquez: People that are disappointed by VR right now are the same people who were enthusiastic two years ago. It’s hobbyists and researchers. There are a lot of other markets, as we all know, and we work with them too, all the verticals outside of games. We know it works. We’re monitoring IMAX VR centers and stuff like that. It’s successful.

My conclusion is that the audience isn’t necessarily gamers. It’s not the normal gaming audience. It’s anyone. It’s families out on a Sunday trying this out the same way they’d go and see a movie. It’s every age, so you need to provide an experience that works for everyone.

When you get in the John Wick experience, you’re holding a real gun. Or not real, but it’s an exact replica. You don’t need an explanation of the game mechanics. You get in, you pick up the gun, and you shoot. It’s like going to the fair, the same principle. You play, win, lose, have fun, and come back. You rack up a leaderboard score and your friends try to beat you. Then you have an experience that people play together. The immersion becomes very social. VR is fun to play, but it’s also fun to watch and share.

GamesBeat: How large do you think this eventually grows? Some people thought that IMAX would eventually take over every theater.

Marquez: It’s getting there. It’s just taking time. I would like it to be faster, but we have a lot of markets. In China it’s already there. The Middle East market is getting there. One factor you have to consider is that the whole mall market is dying. There’s a need to provide entertainment for people going to the mall, and a new reason to go to a mall that always has the same shops. Having an attraction like VR can be very interesting. Anyone can get inside. Everyone has fun.

What Starbreeze is creating is a real platform. It’s a turnkey solution. Because we work with IMAX, because we have Acer providing manufacturing and support, we’re capable of scaling fast. We don’t only provide content. We provide the platform, the game, the experience, all in one. Now we have an operator, too, because we just acquired a company called Interspace. They’re a deployment company. We’re one solution, with big guns behind us. We’re in a place where we can deliver and help people have a good experience. Then it’s just a matter of multiplying the success of each location, but it’s getting there. It will be successful if it’s well done.

GamesBeat: How many VR developers are you working with?

Marquez: Today we have 12 altogether. We’re always looking for more. But we want people who will dedicate their experience to the arcades. I don’t want a home VR experience, something ported from the home to arcades. It needs to be a real mini-theme park attraction, for one player or four players or 16 players. We need to be able to have experiences that scale up and more social.

Some people are putting a lot of effort into that. Ubisoft is pushing a lot of effort and content for location-based entertainment as well. Raving Rabbids is going that way, and Star Trek. What matters is the content. People will go for it if the content is available and it’s fun.

Above: Payday 2 brings friends together to steal stuff.

Image Credit: Overkill Software

GamesBeat: You mentioned VR and esports. What do you think is going to work there?

Marquez: We published a preview of Project Storm that you can look at on the web. That shows what we have envisioned. To simplify it, it’s a laser game in VR. You put on your headset, get your gun, and run around with your friends. Maybe you’re fighting people on the other side of the planet, or in the same room. I think esports in VR could be big. We can take this theme very far.

GamesBeat: It seems like VR is doing well in Japan.

Marquez: For sure. The Japanese were first to adopt, because the arcade culture is still strong there. That’s a place we want to be. The Mario arcade VR, this is so cool. I’m pissed I can’t do it with them. [laughs]

Disclosure: The organizers of Gamelab paid my way to Barcelona. Our coverage remains objective.