Paradox Interactive has released its full financial report for the year 2023, covering the period from January to December.
In 2023, Paradox Interactive reported a significant revenue increase to MSEK 995.6, up 72% from the previous year’s MSEK 580.0, driven primarily by the success of titles like Cities: Skylines 2, Crusader Kings 3, Hearts of Iron IV, and Stellaris.
The Lamplighters League's commercial reception has been too weak
However, operating profit saw a decrease to MSEK 123.9, down 49% from MSEK 244.5, impacted by write-downs totaling MSEK 175.8. Profit after this write-down stood at MSEK 131.3, compared to MSEK 244.2 the prior year, with after-tax profits at MSEK 98.3, down from MSEK 194.2.
This write-down is mostly due to the release and development of The Lamplighters League, which is likely to have cost Paradox Interactive about 2 million USD in lost revenue. “Even though we see cautiously positive player numbers in subscription services, the commercial reception has been too weak, which is frankly a big disappointment.” said Fredrik Wester, CEO of Paradox Interactive back in October.
Following a lengthy collaboration, it was unfortunate news that Harebrained Schemes and Paradox Interactive decided to go their separate ways at the year’s end.
Key events in 2023 included the release of Cities: Skylines 2, The Lamplighters League, and Star Trek: Infinite. During the period, new downloadable content (DLC) was launched for several games, including “Arms Against Tyranny” for Hearts of Iron 4, “Legacy of Persia” for Crusader Kings 3, “King of Kings” for Europa Universalis 4, “Astral Planes” for Stellaris, “Empire & Ashes” for Age of Wonders 4, “Colossus of the South” for Victoria 3, and “Amelia the Queen” for Across the Obelisk. Stellaris Nexus and Space Trash Scavenger were released in Early Access.
“2023 has been a year during which we’ve reached many milestones. We set a new revenue record, in the full year and in the quarter, we have stably more than six million players and we end the year with a very strong financial position.” said Fredrik Wester in a statement to investors.
“At the same time, we’re unable to relax. EBIT is at a level we are not happy with after a large write-down, and the quarter’s game releases have not held the quality we want. There is certainly potential to reach even higher.” Wester concluded.
Discussing the launch of Cities Skylines 2 and its varied reception primarily due to performance concerns, Wester acknowledged the issues, stating:
“Cities: Skylines II is the big release of the quarter, and we are upset that we didn’t live up to players’ performance expectations and couldn’t release on all platforms at the same time. The game has still sold well, and by the end of the quarter, we had sold more than a million copies. At the same time, it is clear that we can and must do better. Since release, we’ve been working hard on improvements and are fully committed to continuing to improve and develop the game, because we strongly believe in its future and are doing everything we can to get there.”
“The plan is to support our games for as long as people play them, we will support them as long as it is financially viable for us. We have long-term plans for all our games. I can’t detail the roadmap for Cities Skylines 2, but performance is a top priority going forward, making it run smoother on most PC machines. Our focus is on performance, adding mod support, console releases, and DLC.”
At 12:00 PM CET Fredrik Wester, CEO, and Alexander Bricca, CFO, will host a livestream on Paradox’s YouTube channel to present the year-end report, and answer questions related to the report and the company’s financial performance. We will be reporting on this later today.
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