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Hello, everyone, and thank you for joining Remedy Entertainment webinar. My name is Veli-Pekka Puolakanaho and I manage the Investor Relations at Remedy. Today, we'll go through Remedy's Q1 2022 business review. With me today are Tero Virtala, CEO; and Terhi Kauppi, CFO. We will have a Q&A session after the presentation.
Tero, the floor is yours.
Thank you, Veli-Pekka. So welcome, everyone, also on my behalf. Five years ago, in 2017, Remedy was listed to first North growth market. And back then, we've raised capital to fund our new growth-oriented strategy. Now during this 5 years' time, we have developed systematically and patiently overall. And as one big milestone of this longer-term development early this May, we transferred to official list of NASDAQ Helsinki. We see that this increases awareness and access to primary especially among international investors. Therefore, there are likely to be also new investors in this call and following the recording then afterwards. These investors, welcome all of you who are now here, and welcome those that are going to follow this afterwards. I know that many of you are not yet as familiar with Remedy as some of the older investors. So before we go into the first quarter review, let's first have a short recap on what Remedy is.
So shortly, we are a video gaming company from Finland founded 27 years ago in 1995. We are a creative force in the wider gaming industry with over 320 world-class game development professionals, a very international who're representing 32 different nationalities. Our main studio is based in the capital area of Finland in Espoo, and at the moment, we are establishing also a second studio in Stockholm, Sweden.
We focus on so-called high production value, AAA console and PC games, and develop the game so that they create long-lasting game franchises that can continuously expand to new games. And we are a multi-project studio with, at the moment, 3 games, live out there and several games in development.
We are mostly known for our high-quality PC and console games like Max Payne, Alan Wake, Quantum Break and Control. These games have won the hearts of millions of gamers and at the same time, many industry awards as well. All these games have pushed the boundaries of creativity at our industry. They have built out new competencies and game by game, they have helped us to develop a safe company.
Now all these games that we have developed and we are developing, they do share some common phrase. First of all, we always build our games on top of our key strengths and then typically add something on top of that, that gives a flavor to the game and also develops our competencies further. Typically, you will always see it premedicates immersive gaming worlds, interesting characters and to narrative part, memorable stories around these characters in these worlds and all this is combined to polished-action gameplay that we expand game by game.
And as we say at Remedy, when a Remedy game comes out, it is of high quality and it also stands out in the market. When the game launches, we typically say that our game needs to be such that it's so distinctive that the gamer who is interested in a Remedy game cannot find a similar game that would be coming out in the same wider launch window of 3 to 6 months' time.
Now in a way, shortly on the market where we are focusing in a way the global game market is a massive market. It's closing a USD 200 billion size overall globally. In a way last year, there were many geographies that are showing a small decline, but it's good to bear in mind that, that's mainly for the reason that the first COVID year in a way, showed such high growth numbers that last year, there was a small decline in some parts. But overall, when we look at the bigger picture, gaming industry is seen to grow many years to come.
Then another part when we look at the market, if we divide it by platforms. Mobile games are a bit over half of the global gaming market, PC and console games form the other half. And that's where we focus as a company. If we look at the PC and gaming market, even in more detail and we consider what type of gamers are playing our games, are they more casual gamers who are playing games every now and then just for fun? Are they core gamers that are spending a bit more time and money into the games and games can then be considered as one of their key hobbies? That's our focus.
Big screen games for core gamers. That -- those gamers we typically find in PlayStation, Xbox, PC platforms. And nowadays in a more and more the new streaming platforms. And many of these platforms are also becoming service platforms, providing subscription services and other type of services for the gamers.
And then in addition to the market wider viewpoints for the consumer market, consumer-focused gaming market, it's also good to bear in mind that as Remedy, we are affected by the gaming industry developments. The status of the industry overall and its development have been very positive to us during the past few years' time, and we see that continuing when we go into the future. So the underlying consumer market keeps on growing and changing and the industry's biggest players are actively driving this stage. Be it subscription services, longer-lasting games, streaming services, just as few examples.
And now in addition to this growing consumer demand, these big players need high-quality games and also triple games and competent development studios that can create these games. However, what is bit contradictory even is that while the overall market keeps on growing and demand for games and studios developing these games are growing. There seems to be fewer and fewer studios that are capable of developing the AAA games.
In a way, we have seen now for a number of years that approximately the number of development studios that are capable of developing high production value, AAA games that can be sold at full prices, that has fluctuated between 150 and 170 developments 2 years, depending on what studios exactly are counted. And now what has been seen throughout the years that no matter if the big companies or new entrants have been trying to build new AAA studios, that is hard.
And most of all, it's slow. You will need at least 100 competent developers representing approximately 20 different disciplines from AI programming to back-end programming to game design to audio designers. And those, in a way, disciplines need to work in harmony as a team, in a way, mastering the different tools and technologies. And it has been seen that developing these type of studios takes years. Developing games with these type of studios take in a way multiple years more. And therefore, in a way, even though the underlying market grows building these studios has been pretty hard.
And now as a result of that when the studios have been in high demand, the consolidation has been continuous. It has been ongoing now for years. It will also continue in the future. And already at the moment, most of these 150 AAA studios are already owned by big game publishers and platform holders.
We are, at the moment, estimating that less than 40 independent studios remain independent studios who have a possibility of partnering with any big partner that they like. And for any studio, Remedy included, this naturally means a lot of business-to-business and partnership opportunities. And yes, we have been in a way taking advantage of that during the past years.
Now in a way, just to conclude what Remedy is, where we are aiming at, we have stated it already before that our long-term objectives are that by the end of year 2025, we have created several successful games and at least one of these games has become a major hit game. And with that, we mean there is going to be a game that leads us to cope out also in charge in its own category and can keep on succeeding after reaching that position.
We have unique creative skills and can create worlds, characters, stories that build the powerful brands, and we will own at least 3 expanding gaming fans all which will have long-term hit potential. We have, by the end of '25, strengthened our commercial capabilities so that we can freely select the right commercial model for each game that we have in our pipeline. For some games in the future, it will be self-financing, self-publishing. For some, it will be cofinancing, copublishing. For some, it's going to be a publishing model with our partner.
Then create on people, they will continue to be a key focus for us. We aim to be the most attractive gaming industry employer in Europe and are systematically taking actions that take us into that direction. And the aim is clear, we will reach these objectives while having a profitable and growing business and we manage the risks well. So that's, in a way, the background on Remedy.
Then in a way, let's have a look at our quarter 1. So our revenue was EUR 12.7 million, which when we consider the quarter 1 last year, it was a big growth, 55% year-on-year. Our operating profit was on a good level, EUR 2.8 million, representing approximately 22% operating profit margin.
Individual events that happened in the first quarter, first of all, CrossfireX by our partner, Smilegate, in collaboration with Microsoft launched for Xbox One Series S and X in February. We also released our plans to transfer to Nasdaq Helsinki's official list, as I mentioned, and that now eventually then happened early May. We also formalized our plans to expand to Sweden and establish now during the first quarter, a subsidiary in Sweden, are now pushing further the recruitments and in a way, taking the operations further. Overall, our game projects, they progressed well across the game project in our pipeline. And then we also made a new deal, Max Payne remake agreement that was signed with Rockstar Games in early April 2022.
Then in a way when we look at our current game portfolio, we have -- in fact, we have, at the moment, 4 games that are already out in the market. Control was launched already in 2019. It continues to sell, although in a declining trajectory, the game has been now out there already for over 2 years. Then also, we collaborated and have collaborated with our partner, Smilegate, now for years. And we have developed the Smilegate's new multiplayer entities. We have created completely new type of story-focused, single-player modes for that type of multiplayer games. And these single-player operations are now available in 2 different Crossfire Games, Crossfire HD that Smilegate has launched in the Chinese market already during 2021. And now in another game, CrossfireX that, as I said, was launched this February for Xbox platforms. Then also with our partner, Epic Games, in October 2021, we launched Alan Wake Remastered.
Then we also what we have in development are 5 bigger games. In Control brand, we are developing Condor, a co-op game in collaboration with 505 Games, and then we also have a bigger Control game, called -- named Heron in development. With Epic Games, we have Alan Wake 2 in full production mode, and that game is at the moment advancing and we are seeing progress in multiple fronts of that game. The game is coming out in 2023.
And then as I said, our newest -- then, sorry, before going into Max Payne, we also, of course, have Vanguard in development to game free-to-play multiplayer, co-op game player versus environment game in collaboration with Tencent on which we announced the deal late year 2021. That game is in proof-of-concept phase progressing, but nothing further to say on that game at the moment.
And then as I was already saying, as our newest division to our portfolio Max Payne 1 and 2 remake with Rockstar. A bit more on that game. So the agreement, that was announced in April, states that we are developing Max Payne 1 and 2 remakes as a single entity, as a single title for PC, PlayStation 5 and Xbox Series S and X. We are developing these games, utilizing our Northlight game engine and also with this project then pushing further many of the elements that we have in Northlight. The development budget will be fully financed by Rockstar Game. We haven't stated the exact budget, but it is in line with the typical Remedy AAA game that we have set to be between EUR 30 million and EUR 60 million.
In addition to Rockstar being the development cost of the game, we also have a royalty opportunity after Rockstar Games have regrouped their development, marketing and selected other costs for distributing and publishing the game. The game is understandably in a very early conceptual phase.
Then one important aspect that we always have are our people. At the heart of any creative game developer, our world-class of talents, our people. As the gaming industry keeps on growing, the competition for talent has been increasing year-by-year already for a longer time, and we see that continuing to do so for years to come. We have succeeded well in this respect, both in attracting new talent, keeping existing talent and very important in developing our people in their responsibilities and roles.
And we have now continued the recruitments. We have been able to keep the bar high for new entrants. And at the moment, we are 324 people. As we have said, we are very systematic on how we onboard, how we support, how we develop and build high-performing game teams with these talents. And we keep on iterating and developing these ways all the time.
As the next step also in attracting new talent in the future and building our game teams further, we are establishing currently a second studio to Stockholm, Sweden. Like the capital area of Finland, Stockholm is one of the [ new area ] of game talent hubs. So we are landing ourselves on a second half to attract even more, in a way, talent. Operations in Stockholm, they are still in early phases, but we have already seen that they have started to progress well. We have had good success, for example, in recruiting talented senior developers that are really sought after talents in the industry.
And then we complement our internal development teams with external development partners, who bring us their special expertise and also allow us to scale up our productions when needed.
So that was my part on the Q1. And now Terhi, our CFO, will talk in more detail on financials.
Thank you, Tero. And good afternoon to everyone also on my behalf. So let's start actually by having a look at our IFRS conversion effects.
We announced the comparison numbers as a release. But since this is the first time we report new IFRS numbers to market, it's good to understand the main differences. And here we have a bridge to explain the effects by IFRS standard. And clearly, the highest net negative effect of EUR 2.5 million is due to IFRS 2 adoption for option programs. Because according to that standard, the value of program is booked as expense and this is not done in Finnish accounting standards.
Then IFRS 16, the leases is basically a reclassification. So there is no net effect. And then for intangibles, depreciation, there is a difference of a little less than EUR 1 million due to Control retroactive development cost capitalizations and in year 2021 depreciations of that capitalizations. And in addition to the IFRS conversion in quarter 1, we also established another company in Sweden, like Tero mentioned, and therefore, also started group reporting.
So about quarter 1 and revenue. So our revenue increased year-on-year by 55.9% to the level of EUR 12.7 million. And we had that growth due to increase in development fees. They increased by 89% to EUR 11.6 million. We had 4 positive factors affecting the growth of the development fees: first, we agreed about a new contract for Vanguard with Tencent, and in relation to that, we had a new source of development fees; secondly, we had a second new stream of development fees as we agreed with Rockstar Games about Max Payne Remake; thirdly, we did not yet have Condor project as development fee source in a comparison period; and the fourth reason is that revenue recognized from Epic projects were somewhat higher than in comparison period.
There was also one negative factor affecting the development fees and that was -- that we are not anymore receiving significant development fees from Smilegate. Then royalties, they were on a lower level than in comparison period, EUR 1 million versus EUR 2 million, so only half of the amount. And we did not receive royalties from Smilegate or from Epic for Alan Wake Remastered in quarter 1. And then when looking at the Control royalties, they were on a lower level than in comparison period due to the natural reasons of the games age.
Our royalties in this time line has been mostly from one game only, and there has been fluctuation over the quarters. From total sales, royalties have been from around the current level of 7% to 8% to well above 50%. The royalties depend on game sales and are affected by seasonality, marketing and discount campaigns, but also B2B deals have a significant role nowadays.
Development fees are more stable in nature, and they are the basis of our revenue. And we expect them to grow also over time since our portfolio of project is expanding and also expanded in quarter 1. And as seen clearly in this slide, we have variation from quarter-to-quarter. And the past performance of the quarter does not mean that in the following year, the comparison quarter would perform in a similar way.
Then the profitability. For quarter 1, the EBIT was EUR 2.8 million and that is 21.8% of revenue. Whereas in comparison period, we had slightly negative EBIT level. And clearly, the increase in revenues drove the profitability improvement. But it's important to remember that similarly, the revenue fluctuation, there has been and will be EBIT fluctuation between quarters. And although the market project model should even out the fluctuation to some extent, this will still be the status. And we will continue our investments in game development and this affects profitability in coming quarters.
Running a multi-project model to generate top quality games requires the world-class talent, and we have invested to drive sustainable growth and we'll continue to do so. Still, our cost base is increasing on a steady and controlled manner as we have continued to expand our projects and started new initiatives. And this increase in resourcing is visible both in personnel expenses and in external development costs.
Our capitalizations EUR 2 million, we're at about the same level as in comparison quarter, and we expect them to remain at about the similar level over the coming quarters. And it's good to note that in official profit and loss formula in IFRS, it nets the capitalization effect with the expenses.
Our personnel expenses were EUR 6.3 million in quarter 1, also at about the same level as in comparison period. External development costs were EUR 3.6 million, an increase of 125% year-on-year. And it's especially important for us to be able to utilize external development capabilities in order to ensure scalability for our operating model because external development scales in a much more efficient way than personnel expenses. And we will be investing also in future heavily to resourcing, and we foresee both personnel expenses and external development costs to increase over the coming quarters.
Our operating cash flow in quarter 1 was record high, EUR 17.7 million. Timing of income in payments affects the operating cash flow on a quarterly basis. And during quarter 1, we received large payments from Epic for budget increase amendment and from Tencent for new Vanguard deal. These were both recorded as revenue already in quarter 4, but the cash inflow effect is visible only now in quarter 1. Also, our cash position overall was record high EUR 73.4 million. For eight consecutive years, the revenue has grown, and we have always been profitable.
Now the profitability level is somewhat impacted by IFRS conversion from year 2020 onwards. And overall, we see possibilities for our top line growth, but as the cost base is steadily increasing, our quarterly results do vary. And for example, our good quarter 1 now might not be similar to upcoming quarter 2 or other quarters. And this is also reflected in our guidance for 2022.
Our partner in terms overall affect our growth and profitability in a significant manner for years to come. And we are taking steps towards self-publishing in a risk-controlled manner by starting with co-publishing like with projects Condor and Vanguard. And like I mentioned in the beginning of -- actually in May, we announced a new subcontracting agreement with Rockstar Game for Max Payne agreement. And this is a logical addition to our portfolio since the partnering with Smilegate has been winding down.
And now back to Tero for outlook.
Thank you. So overall, I'm very happy how we have continued to develop in quarter 1. We are patiently building a long-term profitable growth company. Actions we have now taken in quarter 1, they support us in that part. And with this, our outlook for '22 stays the same as before. We expect our revenue to grow and operating profits to be on a lower level than in '21.
Then a few words that we already said in our full year review last time, we also need to consider the long-term business prospects. We now have several games in development. We have been able to now, during the past 5 years, built this position where we have a multi-project model in operation. We have multiple games in development and step by step, more games out in the market as well.
All of the games we have in development, they are done with the world-class partner and with an agreed long-term development plan and development fees. These development fees, they form as a growing and predictable revenue basis for many years to come. And then we are building the more scalable revenue stream on top of that the game priorities.
Now individual games royalties, naturally they do depend on many variables, but each high-quality game that we one day are able to launch has a potential to succeed. When we ensure the good quality, the success can drive significant revenue and profit growth for many years to come. And this now, of course, we have revenue -- royalty opportunities also with the games we have out there. And in addition to this, we have now multiple game projects in developments, and we will have major game launches between the years '23 and '25.
Our creative game capabilities, they have been long known in the industry. We have been investing even more in the days to have these capabilities, creatively technology-wise and production-wise. And now all the time, our ability to execute our games road map to make the games in quality better and better. They are stronger than ever.
So that's why already last time, we said that we entered the next phase of our long-term growth plan and now it's about execution. That we are able to execute this plan in high-quality, in a way, manageable costs and in good schedule. And that's the board where we are, and we will continue also in the forthcoming quarters. It's about execution. Thank you.
Thank you, Tero and Terhi. It's now time for Q&A. [Operator Instructions] I can see that we've had some questions to the chat already. What are your thoughts on CrossfireX's launch and the critical reception?
Well, so in a way, we can't comment exactly on the Crossfire HD or CrossfireX. They are Smilegate games, Smilegate is the publisher. And as has been said before, they are dominantly multiplayer service-based games. We have developed a new type of single-player operations that form part of this wider package that Smilegate is offering for the players. We started making in a way the first operation already 6 years ago. So they were long in development. It was in Smilegate's hands to decide when they launch these operations. And eventually, they happened first on the Chinese version for the Chinese market. And the Crossfire HD overall, based on the information we have received, has received a good reception on the Chinese market. And now we need to bear in mind that, that was also the first target of this case.
Now Crossfire has attracted a lot of interest also in the Western markets for a long time, and Smilegate decided to partner with Smilegate and thank also our single-player operations as part of that package and bring it to the Western audience. In a way, the CrossfireX has received quite mixed reviews. What are the underlying, in a way, reasons for the bigger package? I'm not in a way going deeper into that, that's up to Smilegate to communicate and analyze more.
Thank you. The next question. Can you share -- can you say anything about Alan Wake Remastered sales performance? And how much cost there is still to recoup?
Yes. So first of all, we are not disclosing the recoupable amount. That's between us and Epic deal. Overall, we could say that it's been pretty much in line with our expectations, but surely we, of course, wish for the higher the better sales, that's for sure.
You mentioned about the B2B deals. Can we expect more B2B deals or B2B deals in general for Alan Wake Remastered?
Well, the B2B deals like, overall, the marketing campaigns, overall, the deals with other third parties are in the hands of our publisher. And that's the situation with Control. Some of that's in the hands of 505 mainly. And the same is with the Remastered. So we cannot really say anything more about that.
Good. Then about a question on Max Payne 1 or 2 remake. Why did you end up starting a new work-for-hire project instead of a new own IP project?
Well, there are a number of reasons for that. The big important perspective is that we have been building the multi-project model and we see as one key part of our long-term future success. And when we have been building this model, which, in fact, has been very hard model to build traditionally for creatively-led gaming studios. We have been succeeding on that step by step, but one of the key learnings during the years has been that one key part of building this successful multi-project model has been the ability to build more and more autonomous and independently-led project deals.
And one step in that is to be able to build a really strong and good leadership team led by the executive producer, who is almost like the business leader, CEO of his or her project, a leadership team around that version with Technical Director, Art Director, Creative Director, Business Director, Development Director. And now in a way, one very positive result with the Crossfire projects that we have been doing, in addition to developing our technology further gaining new expertise creatively on first-person games, in a way, military shooters, these type of things driving our technology development was also that we were able to develop a strong and good leadership team.
Now after 6 years, when we were able to get these games out there, we had an opportunity to consider what do we do next. And when we now had this core leadership team, we knew that, that's one of our strengths and we wanted to see the right type of project for them. So it was clear that we wanted to have a next project.
And now why it was, in a way, work for hire? I think there are 3 in a way key drivers. The first one is the passion of the team. And that's always in our type of industry that, in a way, when we have a strong team, they will develop a good game. But when we can have a strong team who is really passionate about what they can do, then they can develop excellent games. And now it's Max Payne. It's like homecoming and it's like there was no question that the enthusiasm, the passion was there. So that was one thing.
Then the second thing is that throughout the years, yes, we have been learning also that where is Remedy strong, what type of games fit best for us, where do we can -- where can we find synergies. So we saw that with this type of game, there are so many in a way built and story-focused elements and the action gameplay. We know that we can master that. So we knew that our existing competencies fit well with that game. But then at the same time, having this type of game actually supports the development of our other games as well because we can in a way with multiple games with certain similarities, we can invest even more into our technology and tools that build and serve not just in a way Max Payne, but other games as well.
And then the third part was the business part. But yes, we have in a way considered a portfolio wise that on how many projects do we want and how many projects can we invest ourselves, how will we manage the risk profile, as Terhi just told. So we have all the time thought that if there is a write type of work-for-hire project, it does fit into our business portfolio and project portfolio and then Max Payne kind of like hit the mark in the passion of the developers, in a way the synergies it can bring. It was quite clear. And then it is -- I'll just repeat, it is Max Payne. We have never seen such an enthusiasm from the audience when we are announcing Remedy to work on something new. So when there is a royalty upside on the game as well, we see that as long as we can develop a high-quality game, which we can, there is a good business opportunity on top of the work-for-hire opportunity via royalties.
Good. Then there is a question on -- is there a meaningful revenue impact now when AMC bought the rights to Alan Wake TV series?
Yes. So clearly, at this stage, sort of monetary-wise would that have been really significant, we have of course, also announced it in a more significant way, so as an official release. So we did not do that. But overall, of course, in terms of the IP and expanding the media coverage and opportunities around that and so forth, we clear -- we see that there is a lot of value for us. But it's a bigger package we are talking about here and not individually only that deal.
Thank you. Then there's a question on, how should we read into your decision not to release a trader or a demo on Alan Wake 2 in the summer 2022 as originally planned? Is the project running behind schedule?
The project is, as we have said, is coming in '23, and that's what we are focused on and that's when the game is coming out. So no changes in that. It was a consideration together with our publisher Epic. The most important thing is that one day, when Alan Wake 2 is going to launch, it has to be a unique, standout, very high quality game. And the role of the demos, they are still important when the timing is right. But overall, what has been happening in the gaming industry is definitely that consumers nowadays have so much more in a way alternatives where they are spending their time and money, in a way, the supply of good games to longer-lasting games, in a way, different medias and entertainments that are competing for the time, all that has increased.
And overall, what has been seen is that the marketing in a way campaigns for big games. They have been getting in a way shorter and shorter. And the other thing is also that with the use of in a way digital medias, the role of the traditional in way trailers and demos, is in a way, maybe changing its forum a bit. And now originally in a way, there were ideas also that what type of big gaming industry events there would be this summer, there have been changes in those overall in the industry and in a way making a remarkable demo or video that really kind of like makes sense and has a big effect. It's not a small work. In a way, yes, our team in a way, is over 100 people, and some people might say that it's a big team. But in AAA development, it's not.
We are trying to be efficient in a way using in a way, investing in right things on the right time. And the decision with Epic was that it's just best to continue on the current trajectory where the development is and not to deviate the development team into doing something that most likely in a way would not serve the high-quality efficient development of the game at the moment.
Thank you. Then there's a couple of questions on Vanguard. Can you share a bit more details about the progress?
Well, it's in the proof-of-concept phase. We have, in a way, the team continues to develop the game. We are increasing the team size gradually. We tried new hires and divisions from the existing Remedians. The team is very focused. Now in a way, we know exactly what game we are building. We have a playable build that's being developed all the time. But now according to our past learnings from a number of projects from the past 10 years' time, we are extra cautious that the team's focus on nailing down the core pillars of the game, the core gameplay in a way the most important parts of the meta game of the game so that they are locked. Before we start adding content in a way creating new NMEs, expanding the world because unless those key elements are fully locked, then in a way, we need to change everything later in the game if these core elements, in a way, we continue to iterate and change remarkably, in a way, as we would progress.
And in management, we are rather pushing the teams to spend a bit more time than they necessarily would like to in these earlier phases. And I think Vanguard is an excellent example of a team that's doing exactly the right things on their development. So the focus is the game is progressing all the time in a number of fronts. And the biggest focus is now, in a way, iterating and iterating and making the core elements so solid and clear what they are. And when they are, in a way, finally locked then we start expanding the team and start expanding the game in other areas.
Thank you. Then there's one additional question on Alan Wake Remastered. What are your thoughts on the strength of the IP? And have they changed because the game has not yet recouped?
The sales have developed according to the estimates that we have had. In a way, of course, we would always, in a way, love to see the game sales in a way going through their own and moving faster. But the game sales are progressing. The game hasn't yet been pretty good. And in a way, let me say, could you read that, that have your thoughts regarding the strength of IP?
Yes.
Okay. Okay. So have your thoughts regarding the strength of the IP change as the game? No, they have not. But we also need to bear in mind that Alan Wake originally came out 12 years ago. And we have been very successful in delivering the game, in a way, to millions and millions of gamers and it has been also delivered for free in certain campaigns throughout the years. So there is already a massive audience who already has the Alan Wake game.
It was also a question mark for us and Epic that when the game has been, in a way, delivered already to such a vast audience, how many of those would be interested in having Alan Wake Remastered? We believe that there is still, in a way, big audience out there. When will they pick up the game? Will it be in the discount campaigns? Will it be in some of the other campaigns that most likely will still follow as time passes? We don't yet know, but we definitely see that there are strengths on the IP that are kind of like still relevant today. And then it's also good to bear in mind that we have been developing the IP further.
The next game is going to be more like a survival for a game, in a way, in comparison what the old Alan Wake IP was. So in a way, there are new type of elements also how we are taking the Alan Wake IP further. And that's also partly based on, in a way, a lot of market research and creative intentions that our people have.
Thank you. Then there's a bit tempting question. When can we expect the partnership agreement from hereon?
No speculation on that. That will be, in a way, announced one day when the time is right.
Do you have any capability or capacity or willingness to take on further projects in the near term?
Well, we are now focused on the current road map and pipeline we have, especially when we consider the near-term, in a way. We now have a lot in our hands, in a way, we have built up the multi-project model. This is a challenging model for any development studio. With this road map as long as we are able to, in a way, deliver high-quality games in the forthcoming years, we have a lot of opportunities. And as said, now it's about execution, at least not just in the near term, but I would say in the near and medium term.
Good. Then for Terhi. Could you please quantify the development fee contribution of Max Payne Remake for Q1? Is it correct to assume that the Q1 development fee was higher than the run rate for coming quarters given that you likely received compensation for work already performed for the game in the past?
Yes. I think this sort of an analysis is correct in that sense that, yes, normally, when we start a project, we -- the aim is to have a small team working around the idea's concepts for quite a while. And then when we are ready and when we have something to show and when we are in a good position to negotiate, then we start to have the partner and agree about the terms and conditions. And quite often, yes, it is so that in the beginning, we consider the whole development phase for that project. And then quite often -- but I wouldn't say that this is exactly like that always. But quite often, yes, in the beginning, we might have a higher amount at first and then it's more like according to the future development of the project. And yes, we are not breaking down our revenue by partners of our product at this stage. So that's all I can say.
Then what is your view and position to M&A in a little bit longer time period, let's say, 3 to 5 years' time?
Well, 2 aspects. Veli, if I read the question-wise, of course, how this is going to develop in the industry and then what's our take on it? The industry consolidation will continue in a way it has actually expanded. I think it will continue it started on the development studios front, in a way, the bigger publishers, platform holders buying in a way the creative capabilities. That has now continued for a few years, most likely will continue also in the future.
Now it has moved to next level also that in a way, bigger ecosystem developers and platform owners are buying, in a way, bigger publishers for the sake of the brand portfolio development studios and also for the communities that they already have. So overall, I think both of these trends will continue for the forthcoming years.
Then our take, in a way, we see that we are a unique company in this industry. And still, this is soon a $200 billion industry. Our size is still that we -- in a way, we are talking that last year, we were still in a way less than EUR 50 million for whole revenue. With this type of, in a way, creative capability, the multi-project model, we have so many opportunities for long-term growth with organic model that, that has been our, in a way, main focus. And that's why we are now saying that the multi-project model, in a way, the structure has been built already earlier. We have been developing it. We have a strong growth type of games. Now it's about execution that we are able to launch high-quality games more and more regularly in the forthcoming years. So I think the approach has been absolutely the right that the main focus is on organic growth.
But it's also good to bear in mind that we have never said that M&As that Remedy one day, in a way, looking for smaller studios that would be out of the question. It's not our priority. We are not, in a way, actively seeking that. But in way, when we are doing more and more external development working with different partners, the right times also gazes when smaller studios are asking from us if we would like to collaborate. At least so far, that hasn't been our priority when we continue for 3 to 5 years' time as the industry is changing. We are not saying no. But in a way, still try to keep the eyes on the ball and do what we are currently doing the best.
Good. Thank you. Tero. Thank you, Terhi. And thank you all for questions. We will be back with the next earnings webinar on 12th August. Thank you so much, and have a great week.