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17th August 2018
Bi-Annual Remedy Financial Report H1-2018 Summary
[Game Progression, Three Stage Strategy, Northlight]

This week, Remedy released their bi-annual financial report, with a live-streamed presentation in English accompanied by an in-depth forty seven page document in Finnish to comply with financing laws regarding IPOs.

During their hour long meeting held by Lauri Haavisto (Investor & Talent Relations), Tero Virtala (CEO), and Terhi Kauppi (CFO), a number of things was discussed ranging from how the studio has change over the first half of 2018, updated numbers for revenue and EBIT (Earnings Before Interest & Tax), and the progress made on titles in development.

For the studio, revenue was up at 9.2€ million (+11.1% over previously reported figures), and EBIT is down by -0.4€ million (-162.9% than previously reported figures). There were a number of reasons for additional expenditure throughout the first half of 2018, including two game projects (CROSSFIRE 2 and Control) being both in full production, the expansion of teams, investment into IPs (Control) and the recent move to a newly-renovated and custom studio built to the developer's current and future requirements.

There has been a number of further developments since the previous report in February 2018. The studio appointed Terhi Kauppi as the new Chief Financial Officer following Mika Reini's departure from the studio in late January. In March, Remedy announced their collaboration with NVIDIA on the Microsoft DirectX Raytracing (DXR) API. In May, the developers relocated following the completion of their new building at Olarinluoma, Espoo. And in June, Control, previously referred to by "P7", was announced at the Playstation E3 Media Briefing. The presentation also stated that the “Board decided on new option program targeted to key personnel” but didn't delve into further details on that aspect.

In the briefing, Remedy established a three tier strategy for success; 1) developing games that stand out and expand into franchises, 2) a multi-project studio model and 3) establishing a stronger position in the value chain. To maintain this, Tero talked about Remedy's strengths and goals; creating memorable characters and immersive stories, high quality action gameplay, new storytelling techniques and expansion to gameplay, and finally games that build a basis for a long-term franchise.

When it comes to current projects, both main projects have proceeded according to planned schedules, with CROSSFIRE 2 is in the polishing stage with the majority of development already complete, and Control announced at E3 2018 and with the predicted launch date of 2019. The third announced project, previously mentioned in Remedy's previous financial report back in February 2018, is still within early planning and negotiating with potential publishing partners.

Control, formerly known as "P7" or "Project Seven", was announced during the Playstation E3 Media Briefing. During the days that followed, there were 500 appointments with the international media, and the game received twenty five awards and nominations. Control's IP is owned by Remedy who is also responsible for part-financing and part-marketing for the title. The 505Games partnership deal was expanded on in the presentation with clarification given to the net revenue split; Remedy gets 45%, 505Games gets 55%. The game is still scheduled to be released in 2019.

Northlight is Remedy's in-house engine which supports all current and future projects, reducing the dependency on and licensing from external studios.  This section of the studio doesn't bring income into the company allows a custom engine for Remedy titles, greater independency for projects, and the potential for partnerships. The Northlight team is formed of approximately thirty five developers.

The studio is targeting hardcore gamers who game on console and PC, or "Big Screen Gamers". While their games have had a successful reception with Western markets, the partnership with Smilegate on CROSSFIRE 2, allows them to expand their audience (CROSSFIRE has 650 million registered players in 80 countries), and delve for the first time into first person and free to play markets.

Remedy now consists of 185 professionals, from twenty four different nationalities, working across three game projects and on a technology team. A number of those professionals are contractors with the total of Remedy employees at 164. 57% of the employees at the studio are Finnish, with 43% international developers who have relocated. On the topic of employment, in the first half of 2018, the studio received about 1300 job applications from candidates.


Quick Breakdown:

Remedy
 - The developers moved to a new custom office in Olarinluoma, Espoo.
 - There are 164 Remedy employees.
 - There are 185 professionals working at Remedy, including contractors.
 - Developers from twenty four nationalties make up the studio.
 - 57% of the studio is Finnish
 - 43% of the studio is made up of international developers who have relocated.
 - Revenue up at 9.2€ million (+11.1% over previously reported figures)
 - EBIT down by -0.4€ million (-162.9% than previously reported figures)
 - Fall in EBIT due to studio move, full production of two projects, team expansion
 - Remedy received 1300 job applications during H1-2018

Development
 - A multi-project studio was a major push for Remedy following Quantum Break.
 - CROSSFIRE 2 allows Remedy to expand their audience, experiment with first person and enter the free to play market.
 - Northlight reduces the need for licensing from studios and builds the way for potential partnerships.
 - Control began development in early 2016
 - CROSSFIRE 2 began development in late 2015


Games
 - CROSSFIRE 2 and Control are proceeding according to schedule.
 - CROSSFIRE 2 is in the polishing stage, majority of development is complete.
 - Control's marketing is underway following the announcement of the game at E3 2018.
 - Distribution, marketing, and communications for CROSSFIRE are all Smilegate's responsibility.
 - After it's reveal at E3 2018, there were 500 appointments with media outlets to talk about Control.
 - At E3 2018, Control received approximately twenty five awards and nominations.
 - Control is still set for a 2019 launch and released simulataneously

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