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, and 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". 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-sourcelicense. 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. 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, that Patti described to Kotaku as "the supposed timeline for the next project and where I am in my life now". The rift led to Jensen submitting a resignation letter to Patti from his position as creative director, though intending to stay on as a company executive. The letter had been misinterpreted by Patti as a full resignation from the company, and he subsequently removed Jensen's name from the Central Business Register for Playdead. This led to confrontation between the two and their representative lawyers that required intervention of the Danish Business Authority to resolve. This ultimately led to Patti taking a deal to sell his shares for 50 million Danish krones for his shares. Patti was disappointed on the way his involvement with Playdead ended, but said that "Arnt has been a really good friend and business partner for many years". Patti went on to found a new UK-based studio, Jumpship, along with film animator Chris Olsen, by June 2017. 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 while giving full creative control to Playdead, and will split profits 50/50 after Epic recoups its investment on release.
