The studios's notable games developed include The Chronicles of Riddick: Escape from Butcher Bay, Payday 2 and Brothers: A Tale of Two Sons.

Founded by members of the demogroup Triton, the company was merged with O3 Games in 2001 and the parent group was renamed to Starbreeze in late 2002.

In the early 2000s, cancellations of their projects due to conflicts with publishers and a failed acquisition led to a severe financial crisis, resulting in staff lay-offs during the development of Starbreeze's fourth game, The Chronicles of Riddick: Escape from Butcher Bay.

As a result, the company shifted part of its focus to developing smaller games, such as Brothers: A Tale of Two Sons.

Overkill's first title after the acquisition, Payday 2, helped Starbreeze make a record profit after suffering an accumulated loss of $14.4 million since its inception.

[7][8][9] After the merger, the company began working on Enclave, a medieval fantasy, multiplayer-only video game inspired by Team Fortress.

The sequel was said to feature a more elaborate story, 28 different maps, 10 playable characters, and an improved fighting system.

[3] Another game, Knights of the Temple: Infernal Crusade, was successfully released with help from publisher TDK Mediactive.

[3] Starbreeze attempted to acquire another studio, Rock Solid Games, but the agreement between the two fell apart and brought both companies financial problems.

But we just sort of closed the doors, we didn't talk about it, and we just stayed focused on finishing the game Another project being worked on by Starbreeze at that time was The Chronicles of Riddick: Escape from Butcher Bay.

The team took inspiration from films such as Escape from Alcatraz and video games such as GoldenEye 007 and the Tom Clancy's Splinter Cell series.

[6] After the release of Escape from Butcher Bay, Starbreeze again encountered financial difficulties after having not received a significant royalty payment from Vivendi.

[6] However, the game helped set Starbreeze's reputation as a studio capable of making good licensed titles.

It fared worse than the team expected critically, but its commercial performance was satisfactory, selling more than 1 million copies worldwide.

Vivendi was not convinced the game would succeed and adjusted the contract to a remake of Escape from Butcher Bay, The Chronicles of Riddick: Assault on Dark Athena.

During the game's development, seven senior members of the company, including Högdahl, left to form their own smaller studio.

[3] With a budget that was less than other typical AAA video games, Syndicate received average reviews and was a commercial failure.

[27] After the success of Brothers, Fares announced that he had established a new studio named Hazelight and is working on a project with Electronic Arts.

[40] In February 2016, Starbreeze announced that it would be publishing Dead by Daylight, an asymmetrical, multiplayer, survival horror game developed by Behaviour Interactive.

[41] On May that year, 505 Games announced that it had sold the Payday franchise and intellectual property to Starbreeze in exchange for US$30 million worth of stock.

[43] On December 16, 2016, the company acquired a 90.5% controlling stake in Indian-based Dhruva Interactive at a price worth $8.5 million[44] The core Starbreeze team also received investment from Korean publisher Smilegate to develop a new first-person cooperative game set within the Crossfire universe.

[45] The studio has engaged in two separate "publishing-only" investments to help publish Psychonauts 2 and System Shock 3 for $8 and $12 million, respectively.

[31] OTWD's release to personal computers in November 2018 received mixed reviews from critics and underperformed commercially, with only about 100,000 units sold.

[31][54] By February 2019, Skybound Entertainment pulled its licensing contract for OTWD for the game's failure to meet expected standards and quality requirements, officially halting further development of the Windows version and canceling the console ports.

[31] Sebastian Ahlskog, the company's former CFO, was convicted with insider trading charges in February 2020, and was fined approximately 700,000 kr.

[61] In the wake of this investigation, Starbreeze's financial situation became dire, and by May 2019 the studio's own estimates were that it lacked sufficient funds to continue operating for the next year.

On the assumption that the financial settlement is accepted, the company plans on focusing on release of Payday 3 by 2022-2023 which will be its primary revenue driver.

[74] In March 2020, Mats Juhl was appointed as Starbreeze's chief financial officer, replacing Claes Wenthzel.

Starbreeze's Board of Directors appointed Tobias Sjögren as acting CEO and initiated a search process.

[78] Following the release and underperformance of Payday 3, Starbreeze fired Sjögren and installed member of the board Juergen Goeldner as interim CEO.