Swedish game publisher and developer Paradox Interactive is known for its major strategy game series such as Europa Universalis, Crusader Kings and Hearts of Iron. However, the company is currently struggling with its economic strategy. They are going through a somewhat turbulent period with several disappointments that have had a significant impact on the company’s finances.
PC Gamer reports that the company has seen a dramatic 90% drop in operating profit, according to its latest financial report released this week. From a profit of 293 million Swedish Krona in the second quarter of 2023, it has now dropped to just 37 million Krona in the same quarter of 2024. This is mainly due to the write-off of the canceled game Life by You and the related development costs, which cost Paradox around 208 million Krona.
Although Paradox still manages to make a profit, this is primarily due to established titles such as Crusader Kings 3, Victoria 3 and Hearts of Iron 4. “We end the second quarter of the year with mixed feelings,” says CEO Fredrik Wester, commenting on the annual results. “On the one hand, our core business has performed very well, but on the other hand, we have made the difficult decision to cancel the release of Life by You as the game would not be able to meet our expectations.”
Wester also expresses that the company has made mistakes on several of its risky projects in recent years. “It’s clear that we’ve made the wrong decisions on several projects, especially outside of our core, and that needs to change,” he adds. With a focus on strengthening its known core, it seems that Paradox will move away from risky projects and instead prioritize safer bets like Europa Universalis 5.
