THQ Nordic Q4 2017 Interim Report

THQ Nordic experienced substantial financial growth during the fourth quarter of 2017, characterized by a 99% increase in net sales and a 102% rise in EBIT compared to the same period in 2016. Annual net sales reached 507.5 million SEK, reflecting a 68% increase over the previous year. This performance was driven by a strong focus on owned intellectual property, which accounted for 82% of quarterly sales, and a significant surge in new releases, which contributed 74% of the quarter’s revenue. The gross profit margin reached 73% in the final quarter, supported by a balanced distribution between digital and physical sales channels.

The company maintained a robust investment strategy throughout 2017, prioritizing game development and royalty advances. Capitalized internal development costs rose to 33 million SEK in the fourth quarter, while completed development projects reached 133.9 million SEK. This investment activity supported a total pipeline of 36 projects as of December 31, 2017, consisting of 12 announced and 24 unannounced titles. Key strategic moves during the period included the acquisition of the Stockholm-based studio Experiment 101, which is developing the title Biomutant, and the expansion of the Titan Quest franchise through console porting initiatives.

Operational activity in the fourth quarter was marked by 11 product releases, nine of which utilized the company’s own intellectual property. These releases spanned various genres and platforms, including PC, Mac, and Linux, demonstrating a commitment to both asset care for existing titles and the development of new, high-potential projects. By leveraging a mix of back-catalogue monetization and aggressive investment in new development, the company solidified its market position and established a foundation for continued expansion into 2018.