Remedy Entertainment Q3 2021 Business Review

Key insights

6 takeaways

01
Remedy Entertainment experienced a 25.4% year-on-year revenue decline in Q3 2021, dropping to 7.4 million EUR from 9.9 million EUR in the same period of 2020.See it on page 5
02
Operating profit fell sharply to 0.3 million EUR, resulting in a 3.9% operating margin, primarily due to decreased game royalties and reduced subcontracting fees from Smilegate.See it on page 17
03
The company is executing a multi-project strategy involving a mix of self-published titles, partner-funded projects, and subcontracting, supported by a workforce of 294 employees and a new operational hub in Sweden.See it on page 23
04
Key development milestones include the finalization of Alan Wake Remastered and the transition of a major unannounced project with Epic Games into full production.See it on page 5
05
Remedy expanded its portfolio through a co-publishing agreement with 505 Games for 'Condor,' a multiplayer spin-off of the Control franchise.See it on page 9
06
Development continues on the free-to-play, service-based title 'Vanguard' alongside ongoing work on the Crossfire franchise in partnership with Smilegate.See it on page 11

Summary

Remedy Entertainment’s Q3 2021 business review outlines the company’s strategic transition toward a multi-project development model while navigating a period of temporary financial contraction. The primary objective remains the creation of multiple successful, long-term game brands through a balanced portfolio of self-published titles, partner-funded projects, and subcontracting work. By the end of September 2021, the company employed 294 staff members and was actively expanding its operational footprint with a new hub in Sweden.

Financial results for the third quarter of 2021 showed a year-on-year revenue decline of 25.4%, totaling 7.4 million EUR, compared to 9.9 million EUR in the same period of the previous year. Operating profit also saw a significant reduction, falling to 0.3 million EUR from 3.4 million EUR, resulting in an operating margin of 3.9%. These declines were primarily attributed to lower game royalties and reduced subcontracting fees from Smilegate. Despite these quarterly figures, the company maintained a positive outlook for the full year, anticipating that revenue and operating profit growth would materialize in the second half of 2021.

The project portfolio is characterized by high-profile collaborations and internal development. Key activities during this period included the finalization of Alan Wake Remastered, the progression of a larger unannounced project with Epic Games into full production, and continued development on the Crossfire franchise in partnership with Smilegate. Additionally, the company entered a co-publishing agreement with 505 Games for Condor, a multiplayer spin-off of the Control franchise, and continued development on Vanguard, a free-to-play service-based title. These initiatives reflect a broader strategy to manage risk while scaling production capabilities across multiple platforms and commercial models.