Arnt Jensen, a former
IO Interactive developer, drew sketches in 2004 that led him to conceptualize
Limbo. Having tried programming himself and secured government grants, he then sought for additional help through an art-based teaser for the game in 2006. This led to a meeting between Jensen and Dino Patti, and they realized the project was larger than the two of them, so they reached out to investors and with the money they founded the entity "Playdead ApS". (Founded by Underholdningsbranchen ApS and the investors ) Playdead eventually came to have eight employees during
Limbo development, with temporary increases of up to 16 through freelancers.
Limbo success led them to be able to reacquire the company back from investors, making Playdead completely independent. Within the same year as
Limbo release, Playdead began working on
Project 2, what would later become
Inside. The game was partially financed by the Danish Film Institute. Considered a
spiritual successor to
Limbo,
Inside has many of the same themes, including being a
2.5D platform game using a primarily monochrome palette. After using a custom
game engine for
Limbo, Playdead used
Unity to simplify development and a custom
temporal anti-aliasing filter which was released in March 2016 under an
open-source license. The game was officially announced at the
E3 2014 with planned release in 2015, was later pushed to mid-2016 for further refinement, but had a
demo at
PAX Prime in August 2015. Martin Stig Andersen created the soundtrack again after
Limbo, creating sound via
bone conduction with a human skull.
Inside was first released in June for Xbox One, and later on Microsoft Windows, and received more overwhelming praise than
Limbo. Playdead's third game, which has been teased as early as January 2017, will be a "fairly lonely sci-fi game somewhere in the universe", according to Jensen. This game will likely use a third-person perspective within a 3D world, as Jensen stated that the studio has "been tired of the limitations in 2D games". Image teasers of the game were released through Playdead job listings over several months in 2019. Playdead and
Epic Games announced in March 2020 that Epic Games will publish this title, providing full development costs and support of the
Unreal Engine, while giving full creative control to Playdead, and will split profits 50/50 after Epic recoups its investment on release.
Patti's departure Shortly after the release of
Inside, on 19 July 2016, Patti left the company, selling his shares to Jensen. Patti felt that he was leaving Playdead "in a state where it can definitely manage itself", and stated "Following almost 10 incredible years building Playdead from an idea to two dents in the games industry, I'm leaving to seek new challenges." Danish newspaper
Dagbladet Børsen reported that a rift had developed between Patti and Jensen around 2015, This ultimately led to Patti taking a deal to sell his shares for 50 million
Danish kroner (about ). Jumpship's first game
Somerville, released in 2022, has been compared favorably to Playdead's formula. Both Playdead and Patti affirmed that in March 2025 there had been complaints sent by Playdead to Patti related to "infringement and unauthorized use of Playdead's trademarks and copyrighted works in a commercial and marketing context", and threatening to sue Patti for (around ). Jensen stated in the complaint to Patti that he had published a description of
Limbo development on his LinkedIn profile in 2024 which included use of unauthorized copyright materials, and "By providing recipients with core insights to the process of developing Limbo, you are falsely giving the impression that you played a significant role, including a creative role, in the development of the game." Patti removed the post but said that Playdead continued to pressure him on this matter. == Games developed ==