LogIn"The bottom line is sadly weighed down by the write-down of Life by You."
The Swedish publisher Paradox Interactive has reported a 90% drop in operating profit for the second quarter of the fiscal year, largely due to the cancellation of Life by You and the subsequent shutdown of developer Tectonic.
According to the Interim Report for the first half of 2024, operating profit fell to SEK 28.9 million ($2.67 million), a significant decrease from 293 million Swedish krona ($27 million) in Q2 of 2023. The cancellation and write-off of development costs for Life by You resulted in a loss of 208 million krona ($19.2 million).
Paradox Interactive's CEO, Fredrik Wester, expressed his sentiment about the quarter's results. He commented:
“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."
Life by You
He mentioned that in 2021, significant changes were made to Paradox Interactive's investment in "riskier projects" and since then, the company hasn't started any project that has "the same combination of high risk and high costs as Life by You." That could be a hint that we might not see similar projects from Paradox in the near future, as the company seems to be refocusing its efforts towards safer ventures.
Meanwhile, the CEO acknowledges the help of their "core games", such as Age of Wonders 4, Crusader Kings III, Hearts of Iron IV, Stellaris, and Victoria 3 who contributed the majority of revenues in the quarter and helped the company maintain a "good cash flow".
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