R

Remedy Entertainment Oyj
OMXH:REMEDY

Watchlist Manager
Remedy Entertainment Oyj
OMXH:REMEDY
Watchlist
Price: 13.12 EUR 0.31% Market Closed
Market Cap: 178.1m EUR
Have any thoughts about
Remedy Entertainment Oyj?
Write Note

Earnings Call Transcript

Earnings Call Transcript
2021-Q2

from 0
V
Veli-Pekka Puolakanaho

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 will go through Remedy's half year report for the first half of 2021. With me are Tero Virtala, Remedy's CEO; and Terhi Kauppi, Remedy's CFO. We will have a Q&A session after the presentation.Tero, the floor is yours.

T
Tero Virtala
Chairman of the Management Board & CEO

Thank you, Veli-Pekka. So good morning to everyone also on my behalf, I'm Tero Virtala, the CEO of Remedy. So let's now talk shortly on Remedy's key developments during the second quarter of 2021.Our revenue in the second quarter was EUR 9.4 million, a slight increase to the comparison period in 2020. Our operating margin was on a good level, EUR 2.3 million, being almost 25% of our revenue. In relation to the key development, key events, we signed a co-publishing and development agreement with our trusted partner, 505 Games, to expand the world of Control through a spin-off game, Condor. We also agreed on collaboration terms for a future, bigger-budget Control game.Then in relation to our overall developments that we have taken in the second quarter, as we are taking overall during this year, and important context are our long-term growth plans. The actions that we have taken also in the second quarter are taking us towards these objectives.So as a recap, by the end of 2025, we aim to create several successful games and at least 1 major hit game, a game that can reach the global top-selling charts. We will own at least 3 expanding game franchises, all of which will have long-term potential for the games that they are producing. We are continuously, in order to capture more value in the long term, building our capabilities so that we can select the right commercial model for each of our future games. For some of these games, it will mean working with the right publishing partners for that specific games. For some of our future games, the model will be more self-financing and self-publishing.At the heart of our operations and the key ingredient of the success in the video gaming industry are the talents; the development talents, the creative talents that we need. We have systematically been developing the organization, our leadership models, our personnel -- personnel development path in order to be the most attractive employer in the video gaming industry in Europe. And to reach these objectives, we are all the time paying attention that we are a profitable and growing business, in which we also manage our risks well.Then when we look at our current project portfolio, again, an important context when we look at the slides is to bear in mind that strengthening the multi-project capabilities, building new world-class development teams, expanding our game portfolio. These all have been key operational focuses for us for years. And the reason is that in AAA games business, building these capabilities, capabilities to develop multiple games, high-quality games simultaneously, to have a multiple, really high-class leadership teams for these projects, it's not easy. It takes a lot of time for any company in the world, be they the biggest companies in the industry or the more flexible in the developers.This takes a lot of time. And due to this, in -- when we have the multi-project model in operations, when we have more high-class core leadership teams, development teams with which we can utilize our creativity and develop those high-quality games, the stronger we are. These are really hard to copy competencies, and we see that they are some of the key ingredients that will give us valuable competitive advantages as we move further in our plans.And the good thing is that we have advanced well in continuously strengthening these multi-project competencies and development teams. A good perspective to this is that 5 years ago, at Remedy, we had 1 large team. And at that moment, we started to plan the second game that we could start developing simultaneously. Now at the moment, 5 years later, we have teams with which we are working on multiple very promising games in partnership with our trusted partners.We are still working on Control. We just announced a deal, how we are expanding the world of Control to Condor, a spin-off from Control. And we also announced that in the very early conception phase, there is a bigger new Control game. We are working on Crossfire story modes in collaboration with Smilegate. We are progressing with the 2 unannounced projects with Epic Games and our free-to-play co-op game Vanguard is progressing as well.And when we look at this slide, it's also good to note that while we are taking this projects further and have been taking the projects further now for years, we are at the moment approaching a phase where we are able to launch into markets also new games more often and more regularly than we have been doing in the past. And this is one of the key steps also in reaching the long-term objectives that we are aiming at.Few words on Control, the first of these franchises that we are working on. We already said at the end of 2020 that Control had reached over 2 million sold copies, which, of course, is a really good achievement in itself. The good thing is also that Control has continued to sell well, and we have systematically been expanding Control, both to new platforms that have been emerging from the next generation or new generation console platforms to different streaming services and also to other type of services that are now coming, subscription services, new store fronts for selling these games.And these developments, they are all the time bringing us learnings that we can utilize when the industry is going further every year. These type of deals quite typically bring us also additional business-to-business revenues, so in a way, fees from these partnership. And we are also reaching new audiences and building a stronger brand awareness for the future Control games to come. A good example how we have succeeded that at the moment, there are already over 10 million players that have tried and played Control. And the idea of building the audience is an important step in increasing the virality with the game, which is supporting the continuous sales of Control, but it's also building the audience for the future games to come.Then as said, Condor, we just announced at the end of June, a co-publishing and development agreement with 505 Games on Condor. Condor is a multiplayer spin-off game in the world of Control. It's going to be a 4-player cooperative player versus environment game, and it's meant for console and PC platforms. Business-wise, the initial development budget agreed is going to be EUR 25 million. The initial referring that this is going to be a longer service-based game. So we are, first, of course, aiming at the launch phase. And after that, the idea is that service-based games will continue to develop.The development and marketing investments are going to be shared 50-50 and the net revenues are going to be shared in the equal amount, 50-50. We, which is clear, Remedy will retain all the IP ownership. And in addition to Condor, we also announced that the collaboration terms for a future, bigger-budget Control game have been agreed.An important thing is that to us, this has been clear all the time. But I think that for the external audience, this is also an additional proof of Remedy's capabilities to create franchises that are not just individual games, but they are bigger worlds that can expand to multiple, meaningful, high-quality games. At the same time, the deal with our partner 505 gives us the possibility to take a bigger role in the publishing and commercial operations than we have had in the past and in this manner, also takes us further as a company.For Crossfire, this is an exciting year. We have collaborated for a long time with Smilegate to develop story modes for Smilegate's big Crossfire multiplayer universe. This year, 2 story modes that Remedy has developed are expected to launch. First of all, there is the Crossfire, the original game that has been developed by Smilegate with Tencent for PC. The main focus of the game has been in China. And Crossfire HD continues the Crossfire experience. The multiplayer part has already been available from the early summer time 2021 in the Chinese market. And now the expectation is that the story mode will expand the game developed by Remedy and will launch in 2021.Smilegate has also been collaborating with Microsoft for CrossfireX, a game -- a Crossfire game for Xbox platforms and the expectation is that this game will be released in '21 and will include the story mode created by Remedy. So an exciting year overall. We have now collaborated with Smilegate for 5 years. And at the moment, our full focus is ensuring successful launches of these games and our story modes.In relation to the 2 unannounced games with Epic Games publishing, the projects are proceeding. Basically, the business terms are as they have been, of course, nothing has changed with those. The bigger game in the second quarter of '21 has now advanced into full production mode and the smaller game continues in the full production mode as it was previously.In relation to Vanguard, Vanguard being the long-lasting, service-based, cooperative, multiplayer game that we have been developing with a small team very iteratively now for a couple of years, that has been progressing well. We are, in a way, being cautious how we advance. It has been a new type of game for us. It has brought us a lot of learnings. We are now utilizing some of these learnings also in Condor. But Vanguard is showing promise, but it's still in an early phase -- development phase, being a free-to-play multiplayer game, service-based game, a lot of new elements. The development is progressing, and we are now in a phase where we have been able to do selected internal and external playtesting, and we are continuing with those developments.Then outside of our projects, what we have been doing all the time are to develop our development -- to take further our development competencies, multi-project competencies and have a lot of focus on the creative balance we have. We now have almost 300 internal Remedy talents. And in addition to recruiting these people to Finland, we, in early '21, started piloting and evaluating new ways to attract and recruit talent that will be placed permanently outside of Finland.This has been a piloting phase to ensure that we are able to attract exactly the right type of talent, we are able to onboard them into our development teams in a way that the team effectiveness is not hurt, and the early results have been good. And therefore, we are now continuing with these developments. And being now already a 300-person studio internally, this is already quite a remarkable size for an independent AAA developer. We see this development of also putting more effort into recruiting people that will be based outside of Finland as an important additional step in making sure that Remedy continues to attract the best talent also for our future needs.In addition to that, we have also continued to develop our skills and partnerships with the external developers. As we said already at the end of 2020 -- in 2020, we had over 300 external talents working for our game projects, and we have been taking this further all the time. In addition to these, we are continuously developing all the time, our production capabilities, the Northlight technology, our people teams, how we work in these teams.And the developments we have done at this moment, they have been good. We are happy with these developments. And again, they are steps that further strengthens in what makes Remedy so special and what makes Remedy to stand out in the video gaming industry. We are a category-defining creative super developer. We have the unique abilities to create world-class gaming brands and franchises with the world stories, characters, the type of gameplay that we make. And out of this franchise, we have shown that we can develop distinctive benchmark-setting games.Operationally, business-wise, people-wise, we are a professional multi-project developer. And now commercially with our capabilities, we are developing and have been developing to a direction that we are able to select for each game, what is the best model to commercialize that game. Is it via self-publishing or with some games partnering with the publishers? And we are a highly attractive home to world-class talent. We have seen that during the past years and now we are taking the next steps to make sure that when we continue to grow, this also remains a fact. And at the same time, when we do all this, we are a profitable growth company that also manages its risks well.So this is -- these have been the main events. These have been the main events during the second quarter of the year. And at this moment, let's talk a bit more on the financials. And I'll hand -- I'll give this over to our CFO, Terhi Kauppi.

T
Terhi Kauppi
Chief Financial Officer

Thank you, Tero. Yes. Good morning, everyone, and let's look a little more into our financials.We had a slight increase in revenues, both in quarter 2 and in the first half of 2021. And that was the result of us receiving more royalties than in this comparison periods. Our EBIT was EUR 2.3 million, and that's 24.5% of revenue in quarter 2, versus EUR 2.1 million and 22.9% in the comparison period. So we could actually increase our EBIT by 10% in quarter 2 and operate on a good margin level. For the whole of first 6 months of this year, the EBIT was EUR 3.2 million, and the margin was 18% of the revenue.Operating cash flow was negative by EUR 1 million in quarter 2 and positive by EUR 3 million for the first 6 months. So in the beginning of full year, we could generate EUR 1.8 million of operating cash flow than in the comparison period. But we need to remind ourselves that the timing of the payments from our publishing partners do affect the operating cash flow significantly from period to period.So we have progressed in a sustainable way and gotten to a profitable growth track. We have been able to grow our revenues in about 10 years to 10x more, and with a sustained profitability level. 2020 was a record year for us. And now going forward this year, we actually are in about the same level of revenue when we were last year at this time. And our aim is to change or at least to even out this historical pattern of profitability linked to game launches. And we can do that by operating efficiently in this multi-project model.Our net sales were increasing a bit during the first half. And as I said, one of the reasons was that -- the kind of main reason is that Control continues to sell well, and we continue to receive a good amount of royalties from that. We do also receive development fees from our partners. We are receiving them from Epic, 2 games projects going on -- forward well. And also now, we received development fees from 505 since we agreed the new project, Condor, in the end of June.Subcontracting work has been more on a kind of lower burn side since, like I mentioned, we are waiting for the launches during this year in that scheme. And we have been able to increase our staff. During the quarter 2, we could actually increase our head count from 281 persons to 293 persons, so by 4% in only 3 months. That, of course, affects then the personnel expenses cost base. But the largest difference in the cost base within staff expenses comes from our bonus accrual method change.So in our current mode, we are calculating the full year bonus amount and we are accruing now based on the time elapsed, half of that in the first half of this year. It had about a EUR 1 million effect on our EBIT. And we are not releasing any adjusted numbers. But we would have continued with the old model, our EBIT would have actually increased by 30% in the first half.External development fees, what we pay to our subcontractors were in about same level as in the comparison period. But in proportion, we saw some increase in other operating expenses. And that's because the COVID situation affected the comparison period even more than it does now the operations level.So we invest in the future, and that shows in the fact that we have 74% more CapEx than in the comparison period. And the majority of the CapEx is from the product development capitalizations. And the fact that we have been now working more with our owned IP projects means that we have more capitalization eligible project work. So it shows also here.So talking about the new deals and then partner terms. So we need to be very clever to have smart partnering structures on portfolio level. And in one side, when balancing risk and reward is then the self-publishing model, where we could get the full reward, but also the risk is higher. Then kind of on the other hand is the subcontracting work, where both the reward is more limited, but so is the risk, and it's still a good business.And in between these 2, we have currently projects with 505 Games and Epic Games, where we own the IP and then we share both the development, the investment with the publisher, and then we share also the revenue and returns. So overall, the partnering terms affect our growth and profitability in a significant manner for years to come.So overall, we are in the strong position for the future. And as I'm speaking, I'm also clicking through the different game and revenue and partnering models we would have. It's clear that we have potential for growth and EBIT. And this picture is kind of one illustration of future scenario for Remedy, a realistic one. And if one of these games becomes a big hit, that we, of course, aim at, then this picture would look even prettier.So there is a lot of potential. And I'm especially happy that we are now having an excellent cash position to invest in these factors that really enable us to grow and also then boost the profitability further.Thank you for my part. And now back to you, Tero.

T
Tero Virtala
Chairman of the Management Board & CEO

Yes. So just on the outlook for the rest of the year or the full year 2021. The outlook remains unchanged. So as we have said, we are continuing according to our long-term growth plans with an aim that we can launch at least one game or game expansion every year. We are now expecting the launches of Crossfire HD story mode and CrossfireX to happen later this year. And overall, 2021 is looking to be a good year as we have said previously. We are expecting our revenue and EBIT to grow during this year. Majority of the full year growth is expected to happen now in the second half of the year.So that's it on the key developments, key financials. And Veli-Pekka, I think it's time for Q&A.

V
Veli-Pekka Puolakanaho

Thank you, Tero and Terhi. [Operator Instructions] We are now ready for questions, and I can see that we've already gotten some. There are a few questions in the chat. Maybe we could start off by those. There's a question about our expectations for Control for the second half of the year. Do we expect Control to grow revenue year-on-year? Maybe Tero or Terhi, can you comment on that?

T
Tero Virtala
Chairman of the Management Board & CEO

Yes. So -- well, first of all, neither us or our partner, 505 Games, have announced anything on any potential future expansion. So we currently have the main game Control and the 2 sellable DLCs expansions for the game. Nothing more has been announced.Then we still need to remember that in many terms, Control is not the service-based game. It's more like the traditional product. We are happy as a first step that we could take with Control. It's now much more versatile game. It has the site missions. There are much more reasons for people to replay the game in a way, discover again, the areas of the game, get back to the game. And in that sense, it was an important development for us as a company when we are taking our next games further. But at the same time, it's more like a product.So when we originally made Control, we didn't expect Control to sell for a long time. Now what we have learned during the past couple of years is that when the industry is growing, when there are new platforms, the highest quality games, also as products keep on selling for a long time, and Control is a good example of that. Control sold well in 2020, in a very long time after its original launch. Now Control has continued to sell well during this year. And we are expecting this to be a good year for Control.However, when it's not a service-based game, we don't have this type of expectations like we could have for some service-based game that year-on-year they would continue to grow for a long time. So overall, we are, I would say, having very good expectations for the Control sales this year, but not in a way over height that some of the service-based games would have.

V
Veli-Pekka Puolakanaho

Thank you, Tero. There's a question for Terhi. How much revenue do you have from Asia today? If I've understood -- if I remember correctly, we haven't disclosed our geographical distribution.

T
Terhi Kauppi
Chief Financial Officer

Yes, that's correct. So we are not giving out that kind of detail. And overall, for us, what we receive the revenues from is through publishers. And so that is the kind of the main level of visibility what we have overall. But surely, at some point, we might be able to give you more details around that, but that's not the time yet unfortunately.

T
Tero Virtala
Chairman of the Management Board & CEO

Yes. And I could then continue also with that, that without going into details, what we have said already years ago that traditionally, our main focus has been in the Western markets, Europe and North America. But as we are now progressing as a company, of course, we understand, in a way, the giant size of the Asian gaming market and when we go further, especially with the service-based games, we think that Asia most likely, in the long-term future, will also provide more opportunities for us.

V
Veli-Pekka Puolakanaho

Then there's a question on talent. Do you have enough talent to work with all the titles in the pipeline? Or do we need to hire more people?

T
Tero Virtala
Chairman of the Management Board & CEO

Well, the good thing is that we are now starting to see the economies of scale. When we look at our longer-term development percentage-wise, we had to hire more people in the earlier years of our past 5-year development, in a way, 2017, '18, '19, in proportion to the previous years, in a way, the growth was even more. So the good thing is that we are now starting to see certain economies of scale that when we have centralized teams, the technology teams, we are step-by-step able to serve more ongoing projects with these centralized teams and don't need to hire every single position in the new projects that we are having.Having said that, in a way, this is a talent-driven industry in many ways. So yes, in order to fulfill the aims -- the long-term aims that we have, objectives for our future growth, we do need to continue hiring all the time. If I remember correctly, we -- even at the moment, we have approximately 25 open positions for the new talents for our future projects. But fortunately, we have been able to succeed well with these initiatives during the past years. And I'm not worried that we would not be able to continue to do that. We are putting a lot of effort into that. But still, in proportion to our size, it's not, in a way, a major increase that we need to have.In order to complement the needs of our projects, as I said earlier, we are also having a lot of focus in the external development capabilities so that we could be especially focused on the creative parts of the games that we are making and the most critical areas that really make those games stand out, and then we can utilize high-quality development partners to give us even more muscle to, in a way, do the heavy lifting with some of our projects on the, in a way, important areas, but maybe still more doable also by external partners than our talents.And then another good point to remember is that even though we have, in a way -- we have multiple projects in the move. The idea is that we aim to have those projects in different development phases. Some of our projects like Condor, the new, in a way, game in the world of Control, it's in the very early phases, and we can progress with these projects with fairly small development teams. Vanguard has progressed for a bit longer time. It has now approximately 30 developers. And then we have some other projects like the bigger projects that we are now doing with Epic Games that is now in the full production mode. And then we start talking about big amount of also internal developers that we are having.So we would not be able to have 4 or 5 projects in full production mode at the moment. But when we smartly design and phase these projects, we are able to, in a way, take them further, and at the same time, in a way, hire -- build new development teams, build new core leadership teams, hire new developers and use more of the external development partners in order to increase our future capabilities.

V
Veli-Pekka Puolakanaho

We've had actually a couple of questions regarding the number of people required to projects. There's 1 question on -- specifically on Condor, that how many people do we expect to be working on that game? Can we tell a little bit about how the staffing in general goes for these projects?

T
Tero Virtala
Chairman of the Management Board & CEO

Well, we can't talk on exact numbers on our current projects, how many people we have. We can't talk exactly on the amount of developers we have planned for an individual game that we have in development. What we can, in general, say that Control still gives quite a good ballpark figure or comparison point to our projects. Control was a new type of game for us and took us further as a company. It ended up being a very high-quality game, a new franchise, in a way, award-winning game that became game of the year in 2019 globally.And it took us altogether 3 years to develop, approximately EUR 30 million. And Control was still very much a single-player game. And in its highest peak times, the internal development team size was approximately 100 people. So that, in a way, for this type of single player, a bit more story-focused game, would still have a really meaningful and strong action game play part, it gives a good comparison point.Now when we go further as a company with some of our future games, most likely the budgets, in a way, may slightly increase when we, in a way, know what we are exactly doing and our capabilities then to manage these projects are growing. Then we have a different group of projects which are the more service-focused multiplayer games, where we can evaluate that what's going to be the so-called initial development budget, the development budget that we need to make the minimum viable product that's still very high-quality game, but the game that we can launch.And after that continues to live phase, which is going to be continuous development, hopefully, for a long, long time because the longer we develop, the longer it means that these games have succeeded and justified the development. Condor, as an example, we have said that the initial development budget with 505 Games is EUR 25 million.

V
Veli-Pekka Puolakanaho

Good. Then some Condor-related questions. Can we give some indication of the monetization model of Control? Is it based on -- purely on in-app purchases or game subscription? Or is there an initial game purchase also involved?

T
Tero Virtala
Chairman of the Management Board & CEO

Condor is an early phase project and we haven't yet disclosed any information with our partner, 505 Games, on that.

V
Veli-Pekka Puolakanaho

Fair enough. On -- then on the larger Control project with 505, we have -- we announced in June about this preliminary deal as well. What is the typical time line before these collaboration terms being set and a more detailed project agreement? Is it few months or year or how long?

T
Tero Virtala
Chairman of the Management Board & CEO

Well, I don't think there is any typical time in the industry. It always depends case by case, in a way. We, of course, when we announced that collaboration terms have been set for a bigger budget future Control game, in a way, it's with a trusted partner, 505 Games, with whom we have collaborated with -- for a long time. So in that sense, in a way, both us and 505 Games, we're confident to disclose that this collaboration terms have now been set. When do we have, in a way, the more detailed agreement and more info to be shared, we cannot yet, in a way, talk in detail on that or start to speculate on the time line.

V
Veli-Pekka Puolakanaho

Good. Then earlier, we said that it's our ambition to launch 1 new game or an expansion per year. There's a question. Does the launch of Crossfire satisfy this, even though it's not our IP?

T
Tero Virtala
Chairman of the Management Board & CEO

Well, definitely. Definitely, Crossfire, we have been making big story modes, in a way, and really high-quality story modes for the Crossfire universe. We have been working on those for the past 5 years now when they are coming out. Definitely, they are, in a way, meaningful and remarkable, in a way, launches also for us.

V
Veli-Pekka Puolakanaho

Good. Then there's, in the Q&A section. Thank you, Tero and the team, for a very good quarter again. About the Vanguard development, what platforms does that cover? Free-to-play is a new thing for Remedy as far as -- as understood, and require substantial knowledge in business intelligence and analytics. Does Remedy already have those skills or are those within Vanguard's realm, so something that the team should take into?

T
Tero Virtala
Chairman of the Management Board & CEO

That's a really relevant question. And yes, definitely. When we are going to free-to-play, the mentality is partially different than it has traditionally been with the product-based businesses. So yes, we, in a way -- when we have been building the Vanguard team, it has been, I would say, quite a managed initiative where we have taken selected existing Remedy talents and experts in areas that we believe can give competitive advantage to Vanguard in relation to the world building, in a way, certain narrative elements, how we built this world, certain action gameplay mechanics that we see that can give the additional edge to the game.But there has also been a big push to find exactly the right people outside of Remedy that will bring us this, in a way, multiplayer expertise, service-based expertise, the live operations, understanding the iterative -- even more iterative game development approach than we have had traditionally, and game analytics has, of course, been one of these areas.So what we have been doing is to really open, we see it, in a way, external talents that can bring and have brought additional skills to Remedy. We have been systematically building those further, both internally and also selecting external partners with whom we are partnering in these areas.

V
Veli-Pekka Puolakanaho

Good. Then 1 -- at least 1 more question. Could you expand on what the European hiring pilot program entails? Are these hiring -- new hires working somewhere in Europe or are at our headquarter in Espoo? And do we need another European mainland studio?

T
Tero Virtala
Chairman of the Management Board & CEO

Well, the background is that we are now 300 people. And when we look at the, in a way, AAA gaming developers in the world, of course, with some of these big publishers, you see studios of, in a way, thousands of people, But they are still not that many. When we start talking about the sizes of 300, 400, 500 people, AAA development studios, it's already a remarkable size. And the possibilities with this type of studios are quite big.Some of these studios in the world, they focus on 1 single huge game. Some few ones like Remedy have been able to build the multi-project model so that they would have multiple, well-working, high-quality teams and the possibility to work on multiple parallel games. And we are taking that model further.Now with 300 people, in order to manage these multiple game projects, one of the ideas has been that as a company management, we are able to give this project certain high-level objectives. We are able to set certain good benchmarks and guidelines. But in order for these projects to progress well, we need to make this co-leadership teams for these individual projects, even more autonomous and independent, give them more power and set them then certain, in a way, midterm goals that they are following and being able to support these goals that they have all the means to reach these subgoals.But now when we have been able to progress with these plans, many of these teams are really working as more autonomous and independent teams. It's no longer, therefore, even that important that all these teams in the long term would be exactly based in our 1 location in Espoo. For some of these teams, it's going to be. And now, in a way, we were preparing for that already before the COVID time that at some point, how could we utilize potential, in a way, skilled talent, even if they would not be based in Espoo.And even though our recruitment has worked well, it's understandable that the world-class creative talent that we are looking from all over the world, in a way, some of them have the possibility to move into Espoo and we have been succeeding with that. But of course, we are, every now and then, in a way, facing a situation that the potential, in a way, new recruit would really love to come here. But for some personal reasons or for family reasons, eventually, the move into Espoo will not happen.And now when we look at our next step, I would say, development as a studio when we currently are 300 people, we continue hiring people that we will bring to Finland and Espoo to our headquarters. But at the same time, when we have been now able to develop this more independently functioning, more autonomous teams, in a way, during the COVID times, we have been able to develop, of course, as any successful company, the remote working capabilities to a new level.It, in a way, was an opportunity for us now to start piloting and testing the opportunity of actually more openly, in a way, presenting the possibility of working fully remotely for some of the new recruits that we have had. We have been now testing that, taking the approach that we always take that, in a way, the most important thing are our people and the progress of high-quality game development projects, and we cannot jeopardize, in a way, the progress of these projects.Therefore, we took, in a way, I would say, very small steps in the early phases, hiring 5 people, hiring 10 people, in a way, taking some months to onboard these people, asking from their project leadership teams that what's their evaluation, how well are the projects now progressing when they have a bit more people working, in a way, outside of Finland. And the experiences and developments we have done, they have been good.So that's also, in a way, the reason that we are now willing to say it aloud that we have been piloting that. It has been working well and now we continue in the next step with that. The main focus at the moment has been to find world-class talent that is based in Europe and wants to stay in Europe, and that's again to ensure the effectiveness at this point of effective development of the game projects due to the time differences that -- in which our project teams are working.We haven't yet disclosed in more detail in what countries, in what cities our main focus so far has been. But then when the time is right, we are very likely to, in a way, announce a bit more. We are, in a way, reserving that info also partly for the sake that we know that as Remedy when we first time come out with the information that we are actually hiring more people in this city, it will be good news in the gaming industry. And that's a possibility then at that moment for us to reach even more potential candidates in these cities and these countries. So we want to maximize the visibility at that moment and then be able to fulfill even more open positions that we have -- than we -- that we have.

V
Veli-Pekka Puolakanaho

Thank you, Tero. One more question from the chat. So with the news from China regarding games, can you say anything? How it's affecting Remedy?

T
Tero Virtala
Chairman of the Management Board & CEO

No. We have really strong and experienced partners, in a way, Smilegate. Smilegate working with Tencent, in a way. They are more than, in a way, experienced and deep in that market to make sure that Crossfire has this potential. And, in a way, it's not up to us to start commenting on those, and we are confident that our partners know exactly what they are doing and how they are doing it.

V
Veli-Pekka Puolakanaho

Good. Thank you, Tero. Thank you, Terhi. I think we have now gone through all the questions. So -- and thank you also all for the call and the questions. We will be back with the next earnings webinar on November 12. That's all for now. Thank you.

All Transcripts

Back to Top