Remedy Q2 and H1 2023 Financial Results Presentation

Key insights

6 takeaways

01
Remedy reported a Q2 2023 revenue of 8.9 million EUR, a 5.3% decrease, and an operating loss of 4.8 million EUR, representing an operating margin of -53.8%.See it on page 24
02
The company is prioritizing long-term growth over immediate profitability, leading management to reaffirm a 2023 outlook of year-over-year revenue decline and negative operating results.See it on page 24
03
Remedy is currently managing a multi-project portfolio that includes Alan Wake 2, Control 2, Condor, Vanguard, and the Max Payne 1 & 2 remake.See it on page 9
04
To support its expanded development pipeline, the company increased its headcount to 381 employees as of June 30, 2023.See it on page 18
05
The decline in Q2 profitability was driven by increased internal investment in game projects and lower development fees, which were not fully offset by royalty income.See it on page 13
06
The company is utilizing a mix of self-publishing, co-publishing, and partner-funded models to manage risk across its active development projects.See it on page 22

Summary

The Remedy Entertainment financial results for the second quarter and first half of 2023 reflect a strategic investment phase characterized by increased spending on a multi-project development portfolio. During the second quarter, revenue decreased by 5.3% to 8.9 million EUR, while operating profit fell to -4.8 million EUR, resulting in an operating margin of -53.8%. This decline in profitability is primarily attributed to higher internal investments in game projects and a reduction in development fees, which were not fully offset by royalty income.

The company is currently managing a diverse portfolio of projects, including Alan Wake 2, Control 2, Condor, Vanguard, and the Max Payne 1 & 2 remake. A significant milestone during the second quarter was the commencement of the marketing campaign for Alan Wake 2, which received positive industry reception and high engagement following its gameplay reveal. To support this expanded development pipeline, the company has grown its talent pool to 381 employees as of June 30, 2023, while continuing to utilize external development capabilities.

Despite the short-term financial impact of these investments, the company maintains a strong cash position to support its long-term objectives. The strategic focus remains on building a scalable, multi-project organization capable of developing and live-operating games with long-term hit potential. Management has reaffirmed its 2023 outlook, which anticipates a year-over-year revenue decline and a negative operating result as the company prioritizes long-term growth and value chain positioning over immediate profitability. The firm continues to balance risk and reward by utilizing a mix of self-publishing, co-publishing, and partner-funded models across its active projects.