Paradox Q3 2021 Report and Livestream

[LeJerque]

Greetings, all! Consider yourselves invited to read, watch, and otherwise experience our company's public report for Q3 2021. Paradox will present its financial report to the world next week on Tuesday, November 16, 2021. The report will appear that morning on our website at https://www.paradoxinteractive.com/, followed by a live presentation at 12:00 Noon, Stockholm time.

This presentation will be hosted by CEO Fredrik Wester and CFO Alexander Bricca, who will go through the report in detail, provide context and commentary, and take questions regarding the report and its results. This livestream will appear on our YouTube channel, at https://youtube.com/paradoxinteractive.

Please note that our livestream location has changed as of this quarter and the stream will not be hosted where it appeared previously. As part of this change, live chat will not appear during the stream -- any questions you wish to ask must be submitted either here on the forum, or via our Investor Relations email address at ir@paradoxinteractive.com. Questions can be submitted at any time before and during the stream, but as always, time for Q&A will be limited, so please submit your questions as soon as possible.

See you there!

 

[JD's Aktienwelt]

Thanks to Fredrik and Alexander in advance for taking the questions.

1. Could Fred please give us a big picture about his vision for paradox for the coming years? How ambitious are your growth plans for the company? (Not necessarily in financial numbers as we know you don't provide forecasts)

2. Paradox has grown the headcount of their teams by a significant amount, but we don't see this in product quantity or quality yet, quite the contrary DLC numbers dropped, no new games in 2021 etc. What are the driving forces behind this drop in efficiency and what are your plans to get to a more efficient level again?

3. What I really loved about paradox, from an investors view, was that the company had a strong portfolio of profitable Franchises (CK, EU, HoI) but also had the courage to reach for the stars ("moonshots") Magica, Cities, Stellaris are such examples. Is this still in your DNA? Will you still go for Moonshots? (Knowing that 9 of 10 will be cancelled in production, but "one" of these could be the next hit to lift paradox once again)

 

[HisCoolness]

Dear Paradox,
dear Mr Wester,

I second JD's questions.

As an investor it would be of the utmost importance to me to get an idea of the big picture.

Give me something I can believe in.

Regarding the Paradox' market capitalization and its, as I understood it, policy of "investing into future projects / aquisitions" inestead of "wasting" money on dividends the recent months have been a huge blow to my expectations. Games were cancelled, given reasonable bad ratings and "issues" seemed to have had a big negative effect on your corporate staff and identity.

How do I assess your current situations from an outsider point of view:
At the moment I consider three games as your "flagships" which are, in my opinion, Crusader Kings 3, Stellaris and Cities Skylines. The rest of your games, again in my humble opinion, are well past their prime times (EU4, HOI4) and/or simply do not fulfill the expectations with regard to game quality or copies sold (maybe yet...but a turnaround in quality after release is often too late earnings wise - I'm looking at you, Imperator Rome 2 which is now good but has lost / not earned a lot of money due to bad reviews at release). And I am afraid that Victoria 3 might suffer from a very narrow player niche so I do not have that high sales expectations compared to CK3 (which was probably the last game where you "delivered" according to the highest expectations). Moreover your DLC policy seems to fail to deliver as well as it seems to upset a growing part of your player base since contents are more often than not apparently received as too expensive and/or too buggy (EU4 as prime example). While "too expensive" is less of a problem for a "good" dlc as people will probably most often be willing to spend another 20 or even 30 $ / EUR for a prolonged and better game experience. Spending that money for a "buggy" dlc does a lot of harm to the buyer's experience though. Therefore dlc quality matters more than pricetag and dlc should be thouroghtly beta-tested before release or at lease marked as "early access", in my humble opinion. For example I am curious if the bad reviews of Surviving the Aftermath and its extensive beta-testing phase will result in decent metacritic ratings despite the mediocre early access player reviews. I so much hope so.

So long story short: I'd like to read/hear more about new franchises and/or aquisitions. I need something as a vision for 2023/24 to justify the investment in your turnaround plans or, even better, something to make me believe that those setbacks in 2020/2021 were of minor importance in the long run (till 2025).

For example I think that maybe it'd be a good thing to combine your experience with developing / publishing rpg games like Pillars of Eternity (which was a huge success, at the very least with regard to game quality) with the White Wolf / Vampire franchise. I think the core material offers a lot and taking the first person approach of VtM Bloodlines 2 should not be the only option. Or maybe it's an idea to expand on the publishing path of Steel Division 2 by investing into Eugen Systems and their rather unique IRISZOOM engine. It could be upgraded and maybe used in a variety of new games settings and open opportunities in the e-sport sector. Speaking of game engines: Is a new Clausewitz-engine in development right now? And what about your boardgame(s) plans? While there should not be a lot of money to be earned in that sector (relatively spoken), I consider it a decent way to expand the paradox world to another player base. Players who like the boardgames could then turn to the digital versions and vice versa. Unfortunately, in my humble opinion again, this approach is apparently stalled by development and/or game quality issues. And last but not least: I have tried Stellaris: Galaxy Command (mobile) recently and I honestly wonder if someone of you Paradoxians would ever consider playing that game themselves? Stellaris is such a promising trademark and publishing such a game under its name does, in my humble opinion, a lot of damage to the franchise. Mobile is the future and Paradox should try to find a niche in there for themselves but at the moment I would rather like you to abstain from that mobile market than investing into game concepts "like everyone else does" and harming your franchises with bad game quality products.

So: Please, Mr Wester, give us an idea of your Paradoxvision. Let us dream together!

I love you, Paradox Interactive.

 

[lukaslunt]

Hi. Like many, my only question is: What about Imperator Rome? The game has been on hold for 6 months and since then no one has come to the forum to answer us. We are abandoned by paradox.
We must speak please.

 

[AnssiA]

Few questions:

1) What is the company strategy regarding external studios in the future? More acquisitions? Embracer-style compounder acquirer? Less, focus on current studios/keep growing Paradox Development Studio? What about selling assets?

2) Publishing business. Do you see publishing play a larger or smaller part than today in the PDX future? What makes external studios choose Paradox as their partner?

3) Mobile games. Yay/Nay? Considering many PDX titles are fairly simple in graphics to begin with and largely rely on people making choices, mobile could work with many PDX's own IPs, for example Crusader Kings.

4) Cities: Skylines has probably been PDX's best-selling published title. How likely is it that PDX also gets to publish next games by Colossal Order?

5) Most of Paradox Development Studio's games are very complex, and their releases are often bug-ridden. Why not switch to some sort of early access model, where players could buy the DLCs/games earlier (like a month before release date) and help find out bugs and other issues with the game. EU4 tried this with few free beta patches, perhaps this should also be extended to other games?

6) Alternatively, perhaps DLC's could be released in parts. ("Buy now, you can play feature A now, feature B in few months."). CK3's Royal Court DLC have been in development for a long, long time with a lot of features, that don't necessarily overlap very much. Perhaps some features could have been released already to keep players playing the game.

7) Shareholder returns - with the share price at its 3-year low, would you consider starting share buybacks?

8) Any plans to encourage players to become shareholders in the company?

9) The dev diary model of Paradox interacting with the community is great and it should never be scrapped for any game.

 

[evaakimova96]

Hello!
Will Paradox Interactive create a life simulator game, such as The Sims?