Remedy saw slight revenue growth in third quarter as Alan Wake Remastered underperformed

The remastered edition of Remedy Entertainment's Alan Wake has failed to generate royalties for the studio, according to the company's latest financial report. During that investor report highlighting January-September 2022, the developer wrote that both it and Crossfire X "did not generate royalties" during the listed period.

Remedy explaioned that its assumptions for game royalties tend to be "conservative" but that "individual game royalties depend on many variables, which are not all under our control."

As a whole, Remedy generated €7.9 million (or $7.92 million) in revenue for July-September 2022, up 7 percent from that period during the previous year. That rise is largely attributed to the development costs of Alan Wake II and Remedy's remakes of the first two Max Payne titles with Rockstar Games.

However increased development costs for Alan Wake 2 and Codename Condor impacted profitability, with operating profit decreasing from last year's €200,000 loss to a €3 million loss for the reported period.

Looking forward, Remedy notes that it is" evolving from the current development fee-focused business towards a higher margin, more scalable consumer business." Those fees form a revenue basis described as "strong, growing, and predictable," and are expected to carry the developer until its projects release between 2023 and 2025.

Several of Remedy's incoming titles are being co-published or co-financed with another publisher, such as 505 Games (Control) or Epic Games. Though Remedy is bearing a large share of the development costs, the company argues that the strategy will lead to "increasing consumer revenue and royalty opportunities in the long term."

Sharing development fees, continued Remedy, will provide a solid revenue basis until its titles actually release and provides the potential to bring in more revenue. 

"Step by step, our games are transforming into longer-lasting experiences that typically continue to sell for many years."