Starbreeze backs out of StarVR JV funding plan

Starbreeze appears to be backing away from its virtual reality venture with Acer, StarVR, announcing a new capitalisation plan which will see Acer take over majority ownership of the company and relieve Starbreeze from its planned $7.5 million investment.

Initially a Starbreeze-led effort to revamp the classic arcade hall with high-end virtual reality stations, StarVR took on new life when Acer announced it was entering into a joint venture with the company to bring both the StarVR hardware and the location-based installations to life. Under the terms of the joint venture, both companies would put in up to $12.5 million each and take joint ownership of the resulting company - but Starbreeze, the originator of StarVR, has renegotiated the deal to back out of its remaining $7.5 million commitment and make Acer the majority shareholder.

Under the renegotiated terms of the joint venture, Acer will double its investment from $5 million to $10 million while Starbreeze will remain steady at its original $5 million investment and cancel any plans to put an additional $7.5 million into the venture. This new funding split gives Acer a 66.6 percent recurring share of the company to Starbreeze's 33.3 percent recurring, a figure which could drop should Acer inject additional capital into the venture to bring it closer to the originally-tabled $25 million goal.

Starbreeze, though, claims that its decision to cease all investment in the company is not a sign of cold feet over the potential return of commercial-grade VR technology. 'Starbreeze remains fully dedicated to the field of VR where we see great potential in the development of location-based VR that gives users access to premium VR experiences,' claims Starbreeze chief executive Bo Andersson Klint of his company's shift in stance. 'We have pushed design and technical innovation to fruition in our StarVR collaboration with Acer. Starbreeze will continue to push innovation in the headset and focus on its core business – content. Our games and related premium VR experiences will primarily use the StarVR headset for location-based VR centers and we are eager to continue contributing to the success of StarVR.'

'VR is one of Acer's key focus areas, as we continue to make huge strides across hardware, software and content development to unlock its potential,' adds Acer chair and chief executive Jason Chen. 'The increase of Acer's stake in StarVR underlines our commitment to the industry, and we look forward to continuing to deliver best-in-class VR experiences through our successful partnership with Starbreeze and ongoing technological innovation.'

Starbreeze, meanwhile, remains the sole holder of multiple intellectual properties relating to StarVR, making its participation key in the venture's success whether it provides capital funding or not.