Paradox Interactive has seen a significant drop in profits, with a staggering 90% decrease from $27.1 million to $2.6 million year over year. This decline is mainly due to the cancellation of the life simulator game Life By You, which resulted in a write-down of $19.3 million.
Despite this setback, CEO Fredrik Wester mentioned that the core business of Paradox Interactive has been performing well. The company has released strong expansions for its core games, which have positively impacted the top line and generated good cash flow from operating activities. However, the cancellation of Life By You has had a significant negative impact on the bottom line.
Wester expressed mixed feelings about the current state of the company, acknowledging the challenges they face but also highlighting the motivation to improve operations moving forward. The decision to cancel Life By You was a difficult one, but it has provided valuable lessons for the company.
In addition to the cancellation of Life By You, Paradox Interactive has been working on addressing issues with the launch of Cities: Skylines 2. The game has faced various problems since its release, leading to delays in the console version.
The drastic drop in profits at Paradox Interactive raises concerns about the company’s financial performance and strategic decisions. It is essential for the company to learn from this experience and focus on strengthening its core business while also addressing issues with game launches to regain player trust and loyalty.
As for the future of Paradox Interactive, it will be interesting to see how the company bounces back from this setback and implements strategies to improve its financial performance and reputation in the gaming industry.