Following the closure of Paradox Tectonic, its development studio located in Berkeley, California, and the cancellation of Life by You, Paradox Interactive has revealed in its Q2 2024 financial reports that the cost of pulling the plug was almost $20 million.
Paradox is housed in Sweden, so all financial reports are issued in its local currency, Swedish Krona. Operating profit amounted to MSEK 28.9 (MSEK 292.9), a decrease by 90 %. Write-downs of MSEK 208.0 (MSEK 0.0) are included in the operating profit.
Age of Wonders 4, Crusader Kings 3, Hearts of Iron 4, Stellaris, and Victoria 3 contributed to this quarter’s revenue, due to the release of new downloadable content (DLC), which bolstered financial performance somewhat. However, the cancellation of Life by You marks a significant setback for Paradox Interactive’s upcoming game pipeline.
CEO Fredrik Wester commented that this was a painful decision but it serves as a strong motivation to further improve the company’s operations:
“We end the second quarter of the year with mixed feelings. On the one hand, our core business has performed very well, but on the other hand, we made the difficult decision to cancel the release of Life by You, as the game would not be able to meet our expectations.
Looking at the quarter’s results, we’ve released several strong expansions with good quality to our core games, which has a positive impact on the top line and provides a good cash flow from operating activities. The bottom line is sadly weighed down by the write-down of Life by You. It is painful but gives us a strong motivation to further improve our operations.”
Paradox has Prison Architect 2 and Vampire: The Masquerade - Bloodlines 2 upcoming, and there have been hints at something new for the Europa Universalis franchise, but other than that nothing else has been confirmed for release between 2024 - 2025. In the previous financial reports, it was noted that nearly 10 projects are currently in development.
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