Remedy blames revenue drop on €7.2m cost to reboot Project Vanguard

Alan Wake and Control developer Remedy Entertainment has seen its revenue drop by 22.2 percent for the year.

In the studio’s recently published financial results, Remedy said its revenue fell to €33.9m, posting an operating loss of €28.6m. This is even with the launch of Alan Wake 2 in October, which is yet to recuperate its development and marketing costs.

Remedy CEO Tero Virtala said this decline was due to “increased investments” in the studio’s games, as well as the “impairment charge related to Codename Vanguard”. This was the studio’s free-to-play co-op multiplayer game, which it rebooted and renamed Codename Kestrel in November last year.

“The requirements for a successful new free-to-play game have clearly increased during the past years. Despite the promising progress during the first half of the year, we decided with Tencent that the potential was not there. Kestrel returned to a concept stage,” Virtala said.

“As a result, we wrote off all the capitalised Vanguard development costs, impacting the profitability of the fourth quarter and full year 2023 by -€7.2m.”

As for its other franchises, the studio exec stated players should expect a “more regular cadence of sequels” for both Alan Wake and Control. It expects Control 2, the Max Payne remakes and project Condor – Remedy’s co-operative multiplayer game set in the Control universe – to “advance to the next stages of development” in the first half of this year.

“With the refined multi-project model in place, increased focus on Remedy core strengths and the dedication of almost 400 Remedians, we are thrilled with a great lineup of upcoming game launches,” Virtala said.

The company now expects its revenue to increase from the previous year and operating profit to improve, with Virtala calling 2023 “a challenging yet remarkable year” for Remedy.

“We continue the year 2024 with great enthusiasm, more focus, and plenty of determination, and we expect this to be an exciting year of growth for Remedy,” the CEO said.

Earlier this year, Remedy announced it had acquired the full rights to its Control series from publisher 505 Games for €17m. During today’s report, Virtala said this was a “significant positive step” for Remedy and its business going forward.

Meanwhile, the studio has two paid DLC expansions on the way for Alan Wake 2. The first expansion – Night Springs – will allow you to play as “several familiar characters from the world of Alan Wake” as you “experience the unexplainable in multiple self-contained episodes of Night Springs” (which is, of course, this universe’s in-game TV show based on The Twilight Zone).

That will be followed by a second expansion, known as The Lake House. This expansion will see players exploring a “mysterious facility situated on the shores of Cauldron Lake set up by an independent government organisation to conduct secret research… until something goes wrong”.