Remedy Entertainment Business Review: January-September 2021

Key insights

7 takeaways

01
Remedy Entertainment reported a year-on-year revenue decline for the first nine months of 2021, falling 7.3% to 24.9 million euros compared to the same period in 2020.See it on page 1
02
Third-quarter 2021 operating profit dropped significantly to 0.3 million euros, representing a 3.9% margin compared to 34.7% in the same quarter of 2020.See it on page 2
03
The company raised 41.5 million euros through a share offering in February 2021 to fund its multi-project development model and international recruitment efforts.See it on page 1
04
Financial performance was impacted by declining royalties from the game Control and the conclusion of development fees associated with the Smilegate partnership.See it on page 2
05
Remedy expanded its portfolio by signing a co-publishing agreement with 505 Games for a multiplayer spin-off of the Control franchise.See it on page 1
06
Operational milestones for 2021 included the completion of Alan Wake Remastered and the transition of a major Epic Games Publishing project into full production.See it on page 2
07
Despite Q3 declines, the company maintains its full-year outlook for growth in both revenue and operating profit, expecting the majority of gains to materialize in the second half of 2021.See it on page 3

Summary

Remedy Entertainment’s business review for the first nine months of 2021 outlines a period of strategic transition characterized by a multi-project development model and significant investment in future game pipelines. The company maintains its full-year outlook, anticipating growth in both revenue and operating profit, with the majority of these gains expected to materialize in the second half of the year.

Financial performance for the third quarter of 2021 reflected a year-on-year decline, with revenue falling to 7.4 million euros from 9.9 million euros in the same period of 2020. Operating profit also decreased to 0.3 million euros, resulting in a 3.9% margin compared to 34.7% in the prior year. These fluctuations are attributed to the lifecycle stages of existing titles, specifically a decline in royalties from the game Control and reduced development fees from the Smilegate partnership as those projects neared completion. For the nine-month period ending September 30, 2021, total revenue reached 24.9 million euros, a 7.3% decrease from the previous year, while operating profit stood at 3.4 million euros.

Operational highlights include the successful announcement and completion of Alan Wake Remastered and the transition of a major Epic Games Publishing project into full production. The company also expanded its collaborative efforts, signing a co-publishing agreement with 505 Games for a multiplayer spin-off of the Control franchise. To support these initiatives, Remedy strengthened its financial position through a 41.5 million euro share offering in February and continued its international recruitment strategy, specifically targeting talent in Sweden. The company remains focused on organic growth through its diversified portfolio and expects its multi-project model to eventually stabilize revenue volatility.