Paradox Interactive went into 2010 as a fairly niche company focusing their efforts on Grand Strategy games that captivated all but the most experiences armchair generals. Fast-forward to 2017, however, and you'll see a publicly traded powerhouse that's buying up every strategy studio it can find. And it's working.
With their quarterly earnings livestream live right now, Paradox Interactive CEO Fred Wester will build upon and explain in his own words just how the company has managed to grow profits 14% over the same time last year.
For those who'd rather do some reading, the written report is already live. Many titles are said to have contributed to their success this quarter - like the console release of Cities: Skylines and Hearts of Iron IV, but it's the stellar performance of Eugen Systems' Steel Division: Normandy 44 and Stellaris Utopia that are getting most of the credit.
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In the 'Words from CEO' section of the report, Fred Wester shuts down the idea that a game's first week sales dictate whether it lives or dies. Instead, the Paradox philosophy has them "count on longer sales periods where our long-tail generates a large part of the revenue". Fitting this idea was Steel Division: Normandy 44. "The pre-order campaign surpassed our expectations significantly and the game has taken a clear position in our portfolio, where we believe it will have a longer period of long-tail sales." It's almost as if management didn't take into account the strong reputation and loyal playerbase Eugen Systems had generated through games like R.U.S.E in the past.
"We have also continued to develop our DLC-model," explained Wester, "with expansions leading to increased user scores and a steady number of growing active players. Stellaris: Utopia, our best selling expansion to date, is an excellent example of this. During the quarter we have also released the expansions “Death or Dishonor” for Hearts of Iron IV, “Mandate of Heaven” for Europa Universalis IV and “Mass Transit” for Cities: Skylines. All of which have contributed to increased activity in their respective franchises.".
Another big part of these gains happened to be sales. Though the company hit a controversial point with its decision to ramp up game prices shortly after PDXCON, the company seemed to perform well in both the Steam Summer Sale and the Paradox Publisher Weekend event. It just goes to show that it takes a lot more than a single big release to print money. Paradox Interactive excel at keeping their entire playerbase happy across a wide-range of games, rather than focusing on just full-price releases.
