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14th August 2019
Remedy Publishes Bi-Annual Financial Report For H1 2019

Yesterday, Remedy published their bi-annual financial review covering the first six months of 2019.

For the past three years, the studio's financial information has been reported publically twice a year, following Remedy's move from being a privately owned business to being a publically owned one in May 2017. Coinciding with the report, a press conference was held (in English) at the Remedy offices with Tero Virtala (CEO), Terhi Kauppi (CFO), and Lauri Haavisto (Senior Manager, Investor & Talent Relations) which was live-streamed from the studio. You can watch it via the RemedyIR Twitch channel.


Today we're going to run through some of the announcements and changes which took place at the studio in the first half (H1) of 2019. This is our third year talking about this subject; for summaries of changes over past years check out our April 2017 roundup, our February 2018 roundup, our August 2018 roundup, and our February 2019 roundup! We also wrote a wrapup of Virtala's talk on the Reboot Develop Stage on Remedy's transformation.

First up, the studio! 

This year, Remedy will be switching from phase one of the studio's transformation to phase two; a process which has been three years in the making. The restructuring began in 2016, a year which the financial report describes the as the year of growth for the studio. The following two years focused on building talent and teams as well as investing in the studio. The next phase of the studio-wide strategy is due to take place between 2019-2022 with the goal of focusing on creating "longer-lasting games in engaging worlds", retaining ownership of the IPs, and delivering new releases (either games or expansions) annually.

Revealed in Virtala's Reboot Develop talk, Remedy also wants to investigate the potential of self-publishing, allowing them to the choice to publish independently or collaborate with publishers.

As part of the restructuring, the studio increased from 200 employees from the end of H2 2018 to 220 developers by the end of H1 2019, seeing a 10% increase in talent. New names were also added to the Executive Team, they include Mikaela Öberg-Mattila (HR Director), Johannes Paloheimo (CCO), and Christopher Schmitz (COO). During autumn 2018, the studio also took part in an Employee Engagement survey to discover areas of improvement for developers, and at the end of June 2019 measured 8.5/10 for motivation.

In the first half of 2019, Northlight team have been hard at work developing workflows for creating high-quality creatures as well as digital doubles (the process of taking an actor and faithfully bringing them to the game), automating game release and patching workflows to support multiple platforms, as well as across the board improvements

The studio has also stated improvements to their QA and User Research departments, as well as established internal game testing facilities within the studio which has helped generate player feedback for Control ahead of its launch. In addition, "heavy investments" have been made into projects going on at the studio, particularly for the Vanguard team and the team focused on the "third unannounced project". 

Over the first six months of 2019, Remedy received revenues from publishing partners; Smilegate and 505Games, for their work on the CROSSFIRE series and Control (respectively). There was also a one-time royalty of €2,5 million from previously released titles. (While not specifically mentioned in the financial report, this could be the re-acquiring of publishing rights for Alan Wake from Microsoft, as a one-time payment was made during the transaction.)

The first half of 2019 saw a reported revenue of 13 799 (9224) thousand euros, a change of 49,6% and an operating EBIT profit of 1 461 (-388), 10,6% of revenue.

Next up, the games! 

With its launch under two weeks away, Control was discussed quite heavily in the H1 financial report. At the start of the year, the studio announced the release date of August 27th for XBOX One, PlayStation 4, and PC, with the latter releasing as a timed exclusive for the Epic Store; an agreement made by publisher 505Games. Another agreement made by 505Games was with Sony for greater visibility on their platform, as a result (although not stated in the report) PlayStation fans will receive more pre-order content and coverage by the publisher.

At Microsoft's E3 Press Conference, the publisher announced a new partnership with studio Smilegate, a collaboration which brings their upcoming title, CROSSFIRE X, to the XBOX One in 2020. The game is also due to feature a single-player campaign developed by Remedy, although certain phrasing in the report implies it may be the same campaign as featured in CROSSFIRE HD; "the console version will also include our single-player campaign". The report additionally states that "the company will continue working on Smilegate-owned CROSSFIRE and on three-game brands that are owned and significantly financed by Remedy." (The three-game brands being presumably Control, the unannounced third title, and the Vanguard team 's project.)

As for the Vanguard project and the third unannounced title, they are both in the early phase and currently focusing on the game design of the respective adventures. In the report, Remedy goes on to say that "we are not in a hurry to sign business partnerships for our new games", especially as they are currently in a secure financial position.

Quick Breakdown


Remedy

  • Remedy will be moving onto the second phase of their studio-wide transformation.
  • Phase two of the studio focuses on creating longer-lasting games in engaging worlds.
  • Remedy wants to retain the IP of titles they develop going forward.
  • The plan is to release games or expansions annually.
  • The number of developers increased from 200 (H2 2018) to 220 (H1 2019).
  • New faces added to the Executive Team include Mikaela Öberg-Mattila (HR Director), Johannes Paloheimo (CCO), and Christopher Schmitz (COO).
  • Employees measured their enthusiasm and motivation in a workplace survey at the end of June 2019, with the company scoring 8.5/10. (Up by 0.2 from 2018).
  • The first half of 2019 saw a reported revenue of 13 799 (9224) thousand euros, a change of 49,6%.
  • The studio made an EBIT profit of 1 461 (-388), 10,6% of revenue.

Development

  • The Northlight team has been focusing on across the board improvements, as well as improving workflows for digital doubles, creating creatures and more!
  • The studio has been improving its QA and User Research departments.
  • Remedy has received development fees from Smilegate and 505Games.

Games & Projects

  • Remedy has re-acquired the publishing rights to Alan Wake from Microsoft.
  • The studio received a one-time royalty of €2,5 million from previously released titles.
  • 505Games negotiated the time exclusivity agreement for the PC launch of Control with Epic.
  • 505Games also negotiated with Sony for greater visibility on their platform.
  • Microsoft announced a new partnership with Smilegate which sees CROSSFIRE X launch on XBOX One in 2020. Remedy is developing the single-player campaign.
  • Remedy continues to work on CROSSFIRE projects in an ongoing collaboration with Smilegate.
  • The Vanguard Project and the "third unannounced title" are both in the early stages of development with the focus on game design.
  • Remedy has stated, "we are not in a hurry to sign business partnerships for our new games".

1 comments:

Great summary! It's an exciting time for Remedy and it's fans. Thank you!

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-- CONSOLE & PC GAMES --

CROSSFIRE Series

Quantum Break Series

Alan Wake Series

Max Payne Series

-- MOBILE GAMES --

-- LIVE ACTION SERIES --

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