Remedy Entertainment is in the midst of a major strategic shift. The Finnish creator of iconic franchises like Max Payne, Alan Wake, and Control was once reliant on publishing partnerships with bigger players, but now it wants to establish itself as a top European self-publisher.

After reporting Q3 earnings earlier this month, Remedy provided greater clarity into exactly how it plans to do that. It posted €17.9M in revenue (128.6% year-over-year growth) and €2.4M in operating profits (compared to a loss of €5.5M in the same period last year), largely driven by higher development fees and a one-time payment from Annapurna Pictures (more on that later).

Given the volatility of results around release time, this is all the more impressive for a company like Remedy with no recurring live service revenues to speak of. The company’s last major release, Alan Wake 2, debuted in Q4 2023 and its latest expansion, The Lake House, was not a factor in the latest earnings. Heading into the historically strong holiday season, Remedy seems poised to finish 2024 with one of its highest revenue totals ever.

For the past several years, Remedy has been very open about its transition toward self-publishing — the company has a whole webpage dedicated to its five-point corporate strategy.

Remedy previously worked alongside companies such as Epic (Alan Wake 2, Alan Wake Remastered), Rockstar (Max Payne series), Microsoft (Quantum Break, Alan Wake), and 505 Games (Control) to bring its titles to market. Recently, though, it has initiated a number of strategic moves to exercise greater independence and ownership over its products.

Remedy Makes Moves

Remedy has (literally and figuratively) taken back Control. In February of this year, Remedy announced it had acquired the full rights to the Control franchise from 505 Games for €17M, inclusive of “publishing, distribution, marketing and other rights” for Control, Control 2, FBC: Firebreak (more on this below), and all future Control products.

In the past, Remedy’s choice to work with companies like 505 Games allowed it to de-risk the development of new IP while still maintaining ownership of the property in the long run. It also enabled the company to outsource certain publisher functions it may not have been prepared to operate in-house, such as marketing or distribution. Now, with Control entrenched as a successful franchise, and the demand for subsequent entries is well established, the company likely feels more confident in taking on a greater risk in exchange for a greater share of the financial upside.

At the time of the deal with 505 Games, CEO Tero Virtala stated that “[h]aving complete ownership over the Control franchise gives us the freedom to decide the best path forward.” This freedom of choice would later result in the aforementioned arrangement with Annapurna Pictures — a deal that secured 50% of the financing for the upcoming Control 2 while also licensing out Control and Alan Wake for Annapurna to utilize in TV, film, and “selected audiovisual” mediums. The two firms will also divvy up the revenues according to their respective areas of focus, with Remedy earning a greater share of gaming revenues and Annapurna entitled to a larger portion of any transmedia revenues.

It’s worth noting that Annapurna Pictures’ gaming division, Annapurna Interactive, was recently caught in a firestorm of negative press when its team resigned en masse. However, early reporting suggests neither Control 2 nor the broader agreement will be impacted, and we have already seen in the Q3 financial reporting that Annapurna has come through with a major chunk of financing.

Remedy also secured additional financial backing in September from long-time partner and investor Tencent, with a €15M convertible loan agreement. Tencent, which first acquired a 3.8% stake in Remedy in 2021 and increased that stake to 14% earlier this year, now has the option to further grow its share to nearly 20% at a conversion price of €27.2 per share (starting from the third anniversary of the deal). According to Virtala, this additional financing “will support [Remedy] in developing and fully realising [sic] the potential of the games [it has] in development.”

First You Get the Money, Then You Get the Power

Taken together, these recent deals provide Remedy with both the financial backing and the legal control over its franchises to capture greater upside moving forward. However, an underdiscussed move in the context of securing its independence has been the establishment of an overarching narrative and world for its IPs: what Remedy has previously referred to as the "Remedy Connected Universe" (a topic we covered in detail in November of last year).

By connecting its tentpole franchises through various supernatural events and Easter eggs, Remedy has developed a throughline of mystery and suspense across its titles, and has rewarded its fans for deeply engaging with the lore. It’s easy to dismiss this as yet another attempt at a Marvel-esque IP universe, but Remedy has been deliberate in its approach, explicitly detailing in its strategy documents how the company “leverages synergies across games and creates new ways to engage its players for longer periods. Each game and game world creates opportunities for expansions, sequels, and spin-offs.”

True to its word, Remedy’s recently announced FBC: Firebreak centers around the Federal Bureau of Control, which appears in both the Alan Wake and Control franchises. Firebreak, a co-op three-player first-person shooter, is Remedy’s first major foray into multiplayer, tasking players with defending the bureau from an onslaught of supernatural forces.

Set to debut in 2025, Remedy has described the game as “mid-priced,” which may reflect a conservative approach to this first step forward in self-publishing. It’s a completely understandable strategy, given the larger financial risk involved, the company’s relative unfamiliarity with multiplayer games, and the highly competitive shooter market.

FBC: Firebreak had an initial budget of €25M (according to Remedy’s 2023 annual report) and will look to immediately offset some of that through a day-one launch on Xbox PC Game Pass and Game Pass Ultimate, as well as the PlayStation Plus Game Catalog for extra and premium members. Not only will Remedy receive payments from Sony and Microsoft for doing so, but Firebreak should also benefit from a potentially large initial player base — always helpful for a multiplayer game. Further, Remedy hopes the game will expose new fans to the broader "RCU," potentially leading to some second-order catalog sales and/or wishlists for upcoming games.

Remedy may be right to take a conservative approach with FBC: Firebreak — and multiplayer titles more broadly. In May, the company actually canceled a separate multiplayer title it had been developing with Tencent after an unsuccessful attempt to switch the project over from its initial free-to-play design into a premium model. It would be all too easy for Remedy to stray too far from what it knows best at a critical point in the company’s growth trajectory and be forced to reset. Taking the slow and steady approach may prove to be prudent.

Of course, the bitter irony of the company’s quest for greater control is that so much of game development is beyond the control of any one creative team. For proof of this, one need look no further than Alan Wake 2, a game that by all accounts was incredibly well received but that has yet to turn a profit for Remedy despite being the company’s fastest-selling game ever.

Of course, part of why it hasn’t yet recouped costs is due to the publishing agreement with Epic Games, an obstacle that self-publishing should render irrelevant moving forward. The fact remains that survival horror is something of a niche genre — with a €50M budget, Alan Wake 2 was reportedly Finland’s “most expensive cultural product of all time,” though that may eventually be surpassed by Control 2 (which also boasted a €50M budget as of 2023). Alan Wake 2’s latest expansion, The Lake House, should help push the title into profitability.

Despite the popularity of the company’s franchises, Remedy is still fairly small relative to its European peers. The company certainly has all the tools of its larger competitors: great games, strong IPs, a bespoke in-house game engine, and growing self-publishing capabilities. As always, its future success will come down to execution. Whether Remedy can convert this momentum into meaningful growth remains to be seen.

Remedy has a lot to look forward to. Beyond FBC: Firebreak, there is the much-anticipated Control 2 (release date TBA), a combined Max Payne 1 and 2 remake (in collaboration with Rockstar Games), and perhaps other as-yet-unrevealed projects.

We already know about the previously canceled multiplayer title with Tencent; given Remedy’s move toward more multiplayer projects, its close relationship with the Chinese giant, and the company’s desire to expand into new markets, another future collaboration wouldn’t be terribly surprising. We can also expect future transmedia efforts from the Annapurna partnership, which should at minimum increase awareness of Remedy’s franchises and at maximum drive engagement, either from a boost in new players, reengagement of lapsed players, or both.

Remedy is clearly placing a big bet on itself and seems to be doing so in a careful, measured way: offsetting costs through financing and partnerships, doubling down on established franchises, and expanding its IP in interesting new ways. If nothing else, the world needs more successful independent game developers. Remedy is proving that with enough time, patience, and creative empowerment, small studios can eventually grow to become industry mainstays.

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