Paradox Q1 profits up 270% - despite only one new game release

Paradox Interactive has released its financial results for Q1 2018, and they make for some impressive reading.

Revenues for the three months ended March 31st were reported as SEK 267 million ($30.5 million) - more than double the SEK 121.3 million ($13.9 million) achieved in the same period last year.

Operating profit saw even better gains, up a massive 270 per cent year-on-year from SEK 38 million ($4.35 million) to SEK 140.5 million ($16.1 million) - almost four times the profit achieved last year.

Interestingly, Paradox only released one new game during the quarter: sci-fi management title Surviving Mars. While the publisher recognised this as a key driver, it also attributes this growth to the ongoing success of Stellaris, Cities: Skylines, Hearts of Iron IV and Europa Universalis IV.

All four titles received new expansions during the quarter, which has helped to drive new sales. Paradox also notes that the first four days of the quarter were part of the Steam Winter Sales, traditionally a good revenue spike for many PC publishers.

Outgoing CEO Fredrik Wester was particularly pleased with the results, observing that a game's success extends well beyond its initial release - as Paradox's catalogue titles have shown in Q1 2018.

"Conversions in the form of a game purchase is not the end destination - it's rather the beginning of our shared journey ahead," he said. "This means that every new game release can be viewed as a foundation on which we continue to build together with our community.

"For example, we can see for several of our games that profitability and the number of players rise steadily over time (in some cases, over the course of several years). This means that the launch period remains important for Paradox, but nowhere near as critical as it was merely a few years ago. Of course, we still aim to attract an active player base that will return to the games on a regular basis."

Picking out examples, he observed that Hearts of Iron IV expansion Waking The Tiger "sold very well... even though many loyal players already have the expansion pass", while the release of Rule Britannia for Europa Universalis IV helped break the record for number of monthly active players.

Wester concluded: "This will be the last CEO statement from me alone. As outgoing CEO, I will write the next statement together with Ebba [Ljungerud], the CEO-elect. Moving ahead, I look forward to stepping into my new role as executive chairman and letting you get acquainted with our new CEO. I will, however, remain in my position until the end of July, and there is much we want to accomplish both before and after that date."