Paradox pushes profits back as it focuses on “record high” investments

Paradox pushes profits back as it focuses on “record high” investments

Revenue and profits are down in Paradox's Q1 financial results, but the strategy publisher isn’t too fussed.

In its first quarterly results for 2019, Paradox Interactive saw profits fall 11 per cent to $24.8 million (238.3 million SEK), while profits fell a sharp 55 per cent to a mere $6.5 million (62.7 million SEK).

The Swedish publisher isn’t too shocked, though. Its catalogue of grand strategy titles is still pulling in revenue, but recent investment and expansion plans have pulled the company away from pure profit.

"During the quarter, we invested more in both games development and marketing than we did in any previous quarter," said company CEO Ebba Ljungerud. The executive also explained that Paradox is deep into its biggest marketing push to date.

"Among other things, we carried out our largest marketing campaign ever when we announced the game Vampire: the Masquerade - Bloodlines 2.

Shrinking margins is all part of the plan going forward for Ljungerud. Paradox is growing and it needs to make these expensive moves long before the titles it's investing in hits store shelves.

"We have also gradually invested in building an organization that will be able to develop and publish our growing game portfolio," said Ljungerud.

"These investments in development, marketing and organisation need to be done well in advance of the games being released and thus before we get a return on these investments.

"This means that our margins are lower when we are in a strong development phase, an effect that will be very noticeable when we simultaneously have a quarter with fewer major game releases."

Staff Writer

Natalie Clayton is an Edinburgh-based freelance writer and game developer. Besides PCGamesInsider and, she's written across the games media landscape and was named in the 2018 100 Rising Star list.