Paradox has announced a precipitous 90% quarter-on-quarter drop in its operating profits following the cancellation of Sims-style life simulation Life by You earlier this year.
In a summary of the studio’s latest interim financial report, Paradox says its operating profit has fallen from 292.9 million Swedish kronor last quarter to 28.9 million this quarter, with Life by You-related “write-downs” of 208 million kronor being “included in the operating profit”.
Overall revenue has fallen by 22% since the first quarter of the year, which isn’t quite such a disastrous percentage, but is still probably not what Paradox was hoping for.
CEO Fredrik Wester says the studio has “mixed feelings” about its second quarter. On the one hand, Wester says Paradox’s “core business” has performed well, but he says the cancellation of Life by You was “difficult”.
In a more detailed report accompanying the quarterly summary, Wester says Life by You‘s cancellation gives his studio a “strong motivation to further improve our operations”.
He’s unexpectedly candid about Paradox’s decision-making, admitting that his studio has “made the wrong calls in several projects” and that improvements are needed across production, quality, and risk assessment.
He also says that Paradox won’t be starting projects with the “same combination of high risk and high costs” as Life by You incurred, so it looks like you won’t be seeing any projects similar to the former potential Sims rival anytime soon.
Wester also says that Paradox is “happy that Cities: Skylines 2 has picked up momentum”, pointing to recent updates that have brought “sweeping changes to systems and many additions that players have enjoyed”.
Cities: Skylines 2 is still sitting at a “Mixed” rating on Steam, with users still complaining about bugs, frequent crashes, and a poorly-optimized engine, among other things. Additionally, the game’s console versions were recently delayed once again, with their release dates now uncertain.
It’s worth checking out Paradox’s full financial report if you want to get even more into the stats and numbers. You can see the summary here, and you can download the full report in PDF form at the bottom of that very page.
