Remedy Half-Year Report 2018

Key insights

6 takeaways

01
Remedy Entertainment reported an 11.1% year-on-year revenue increase to €9.2 million for the first half of 2018, despite shifting from a €617,000 profit in 2017 to an operating loss of €388,000.See it on page 1
02
The operating loss was driven by a strategic decision to expense all product development costs immediately rather than activating them, alongside investments in office expansion and team scaling.See it on page 2
03
Development progress included the CrossFire 2 single-player campaign reaching the polishing stage and the title Control entering full production following its E3 announcement.See it on page 2
04
The company expanded its workforce to an average of 158 employees, receiving over 1,300 job applications during the period.See it on page 1
05
Technological development focused on the proprietary Northlight engine, including the integration of NVIDIA’s ray tracing technology.See it on page 3
06
The company is transitioning toward managing larger, multi-platform projects while prioritizing the long-term ownership of its intellectual properties.See it on page 3

Summary

Remedy Entertainment experienced a period of strategic growth and investment during the first half of 2018, characterized by an 11.1% year-on-year revenue increase to €9.2 million. Despite this top-line growth, the company reported an operating loss of €388,000, a significant shift from the €617,000 profit recorded in the same period of 2017. This financial outcome stems from a deliberate strategy to prioritize long-term intellectual property development and infrastructure expansion, including the scaling of game development teams, the relocation to a larger, custom-renovated office in Espoo, and the decision not to activate product development costs, which forces all investment to be recognized immediately against earnings.

The company’s operational focus remained on three distinct game projects. The single-player campaign for CrossFire 2 reached the polishing stage, while the title Control entered full production and garnered substantial industry acclaim following its announcement at the E3 trade show in Los Angeles. A third, unnamed project remained in the early planning and partnership negotiation phase. Furthermore, the company advanced its proprietary Northlight game engine, notably securing early access to NVIDIA’s ray tracing technology to enhance future graphical fidelity.

Human capital development remained a core priority, with the average headcount rising to 158 employees. The company successfully attracted over 1,300 job applications during the period, bolstered by the positive media reception of its upcoming titles. To ensure long-term retention and alignment with shareholder interests, the board implemented a new option program for key personnel. These efforts, supported by a solid balance sheet and a clear focus on strengthening the company’s position within the game development value chain, reflect a transition toward managing larger, multi-platform projects while maintaining ownership of key intellectual properties.