Remedy Entertainment Q3 2024 Business Review

Key insights

6 takeaways

01
Remedy Entertainment reported a 128.6% revenue increase to EUR 17.9 million for Q3 2024, achieving a positive operating profit of EUR 2.4 million.See it on page 20
02
The studio is pivoting to a self-publishing model, having consolidated full intellectual property rights for the Alan Wake and Control franchises.See it on page 8
03
A new partnership with Annapurna Pictures will co-finance the development of Control 2, while also facilitating film and television adaptations of the studio's IP.See it on page 10
04
Tencent provided a EUR 15 million convertible loan to strengthen the studio's development capabilities and support the commercialization of self-published titles.See it on page 11
05
Key projects currently in development or production readiness include the Max Payne 1&2 remake, Control 2, and FBC: Firebreak.See it on page 5
06
While the company maintains its 2024 outlook for revenue growth, it projects that full-year EBIT will remain negative due to the transition away from reliance on development fees.See it on page 27

Summary

The Remedy Entertainment Q3 2024 Business Review outlines a period of significant financial growth and strategic transition for the studio. The company reported a 128.6% increase in revenue to EUR 17.9 million, alongside a shift to positive operating profit of EUR 2.4 million and operating cash flow of EUR 6.6 million. This performance was largely driven by development fees associated with ongoing projects, including the Max Payne 1&2 remake and Control 2.

A central theme of the review is the company’s strategic pivot toward self-publishing and the consolidation of its intellectual property rights. By acquiring full rights to the Alan Wake and Control franchises, the studio aims to capture greater long-term financial upside. This transition is supported by a new partnership with Annapurna Pictures to co-finance Control 2, allowing the studio to focus on game development while leveraging Annapurna’s expertise for film and television adaptations. Additionally, a EUR 15 million convertible loan from Tencent has been secured to bolster development capabilities and support the commercialization of upcoming self-published titles.

The project portfolio remains robust, with FBC: Firebreak and Control 2 in production or production readiness. While the shift to self-publishing models is expected to reduce short-term development fee revenue, the company maintains its 2024 outlook, projecting overall revenue growth and improved operating profit, though it anticipates that EBIT will remain negative for the full year. The studio continues to focus on expanding its existing franchises through new expansions, such as The Lake House for Alan Wake 2, and upcoming releases across major gaming platforms.