Gaming companies | The last gambling house on the Helsinki Stock Exchange

Espoo In Niittykummu, three analysts from different banks are sitting in a row on the sofa in the lounge of the game company Remedy. We are shown for the first time when the company’s Alan Wake 2 game, which will be released in October, is actually played.

It’s handsome. And scary! The Genre of the game is survival horror.

It is about Remedy’s biggest game project ever and an exceptional entertainment production in Finnish terms. Around 130 employees have worked in Remedy’s own team during the largest phase of the project, and in addition, external partners have had almost the same number of people working. It is by far the biggest game team for a Finnish game project.

We see in the game how an FBI agent Saga Anderson investigates mysterious ritual murders along the paths of the Cauldron Lake forest area. The lights and shadows flicker in the leaves of the trees and the lapping of the water. Water starts sprinkling and the atmosphere thickens.

When zombie-like monsters rise from the water, the melee gets tough. There is fog and panting, bloody corpses. Sometimes there are nightmarish glimpses in which we dive into the mindscapes of Robert Nightingale, the mysteriously resurrected FBI agent pursued by Anderson. The horror story begins to materialize around the main characters.

Remedy is a technically and visually strong game studio, and here we are now taking full advantage of the company’s self-developed Northlight game engine and its toolkit. This amount of detail on the screen means a huge amount of data, which is expensive to implement realistically.

Saga Anderson and the title character are intertwined in the story-driven game Alan Wake stories, and they can be played side by side so that the game experience is slightly different each time.

This has been long overdue. It has already been 13 years since the first Alan Wake.

Remedy has not told the exact budget of the game, but now we are somewhere above 60 million euros.

The publisher of the game is Epic Games, which means that according to the contract, Epic has financed the development costs and committed to significant marketing investments. The sales revenue of the game will be split in half once the expenses have been covered.

Remedy was listed on the Helsinki Stock Exchange’s growth company list six years ago, in May 2017. Since then, it has been building future growth by developing several big games at the same time.

The first of them was a single-player campaign for the Crossfire game series published with Korean Smilegate, which was released in February 2022. Crossfire, which was subcontracted by Remedy, received exceptionally harsh reviews in international magazines. For example, Polygon called it “Remedy’s worst blunder” and a mediocre shooter.

The game flopped, and the companies closed the game this spring.

For Remedy, however, it was mainly a subcontracting project that brought in cash flow, the Inderes analyst who follows the company Atte Riikola evaluate. It balanced Remedy’s risks at a stage when the company was just starting its own big projects.

However, Alan Wake is Remedy’s own game, based on the company’s own story, and there are now high expectations for it. Managing director Tero Virtalan according to the game is of great importance to the company for three reasons.

The most important goal is, of course, the financial success of the game. Alan Wake is still a well-known brand that the company believes has a ready-made fan base. Virtala also mentions about 15 million players of the Control game that came out in 2019.

As the new game reinforces the Alan Wake brand, it allows the story to continue.

“There are hardly any independent AAA-level game developers like us in the world anymore. Every time we release a game, the doors to further partnerships are more and more open. This increases interest in the following projects,” says Virtala.

Thence let’s get to the central question. Independent game studios like Remedy are really starting to become rare, as the wave of mergers and acquisitions has disrupted the industry in recent years.

Will Remedy remain independent?

At the beginning of last year, there were three domestic gambling houses on the Helsinki stock exchange, which were listed around the same time in 2017.

In March 2022, the streaming giant Netflix made a purchase offer for Next Games, and it was delisted from the stock market through the acquisition. Now the same is happening to Rovio, for which the Japanese company Sega made a purchase offer in April.

With that, Remedy will remain the only game company on the Helsinki Stock Exchange. Does it have more than a symbolic meaning for Remedy?

Tero Virtala empii.

“The mobile game market has been so different, they [Rovio ja Next Games] fins haven’t really been benchmarks for us. Of course, it has been nice that there have been others on the stock exchange in Finland,” says Virtala.

While mobile game companies live at a faster pace of the quarterly economy, Remedy’s game projects are long-term projects of years and investments of up to 30–60 million euros.

In Finland, Remedy’s only comparison, the console game developer Housemarque, founded at the same time, i.e. in 1995, ended up in the stable of its long-term partner Sony in June 2021.

In the sale of Rovio to the Japanese company Sega, the main owners, or the Hedie family, played a key role.

Remedy’s largest shareholder, chairman of the board and chief technology officer Markus Mäki is that man. Mäki, one of the founders of the company, still owns approximately 24 percent of the company. The value of his ownership at Remedy’s Friday rate would be around 82 million euros.

Mäki strictly protects his privacy, and even now refuses to be interviewed. He still kindly comes to say hello when the interview with Tero Virtala is over. The CEO therefore has to handle the talking.

When massive consolidation has been going on in the industry for years, according to Virtala, it is clear that “there has been interest in Remedy”.

“We are now at the point that has been built for years and we are starting to get games onto the market. The coming years will show how far we will end up on the growth path. The big days of success are just ahead,” says Virtala.

The company changed its strategy to be more growth-oriented in 2016. Soon after, the company was listed on the stock exchange. Now Remedy has five different game teams, its own technology and big partners as publishers.

So will Remedy continue to be independent?

“I’m not going to speculate on such a thing. If the company is listed on the stock exchange…”, says Virtala, but does not complete the sentence.

“Our strategy is built on the fact that we are an independent company with good conditions for success and long-term growth.”

In May 2022, Remedy moved from the growth company list First North to the main list of the Helsinki Stock Exchange.

Remedy of the following analysts, Inderes’ Atte Riikola estimated in his most recent report that the company’s figures for the beginning of the year were weaker than expected. This year, the five game projects under development are mostly seen as costs.

A large part of the company’s income, on the other hand, has been the development fees paid by partners in game development projects, which were hardly met at the beginning of the year. Even this year, turnover will decrease and Remedy anticipates a loss.

Last year, Remedy’s turnover was 43.6 million euros and it made an operating loss of about half a million euros. It had an average of 307 employees during the financial year.

Now the eyes of investors and analysts are already on October and the release of Alan Wake 2. With that, the company’s story is moving into a more interesting phase.

“Next year, with Alan Wake, we will move into the phase of profitable growth. The years 2024–2027 will tell how successful these games in the pipeline will be,” Riikola estimates.

The investor is therefore still required to “play the long game patiently”, he states.

Riikola was left with a “good feeling” by the game demo of Alan Wake. A high-quality game similar to Remedy is coming, which seems to have the starting points in order.