Remedy Entertainment Plc Inside Information February 28, 2024 at 7:00 p.m. EET
Inside Information: Remedy acquires full rights to the Control franchise from 505 Games
Today, Remedy Entertainment Plc (“Remedy”) and 505 Games S.p.A. (“505 Games”) announce a transaction upon which all publishing, distribution, marketing and other rights to Control, codename Condor, Control 2, and all future Control products will revert to Remedy.
The Control franchise is in the core of Remedy. Having acquired the full rights to Control, Condor and Control 2, Remedy is now in a position to make the right product and business decisions focusing on long-term franchise growth.
The key terms of the transaction are as follows:
- Termination of Agreements: Publishing agreements for Control, codename Condor, and Control 2 are immediately terminated by mutual agreement.
- Reversion of Rights: For Control 2 and codename Condor, all publishing, distribution, marketing, and other rights licensed to 505 Games revert to Remedy with immediate effect. 505 Games will continue as the publisher of Control through a transition period ending December 31, 2024, under the terms of the original Control publishing agreement. In addition, 505 Games continues to administrate existing B2B deals for Control until their agreed expiration dates. After the transition period and the expiry of these B2B deals, 505 Games will have no future royalty or other rights to Control.
- Purchase Price and Cash Flow Effect: The maximum purchase price for the transaction is approximately EUR 17 million, which equals the amount that 505 Games has paid for the development of codename Condor and Control 2 to date including a minor premium. Remedy is entitled to set off certain receivables from the purchase price and, therefore, the cash flow effect from the transaction will be clearly less than the purchase price. Remedy will pay the net purchase price in three cash instalments during the next twelve months.
The transaction has no immediate effect on the income statement, while we see attractive growth opportunities arising in the mid-to-long term.
This transaction will enable us to negotiate better deals for current and future Control games. We can now weigh up the options between self-publishing and a new publishing partner for Condor and Control 2. At the same time, we are in a better negotiating position than before as Control is an established brand and Alan Wake 2 has been successful. We are confident that these factors combined will enable us to get the right partner, deal structure and risk-reward profile that benefit Remedy and are the best fit for the Control franchise. We will evaluate and negotiate with potential future partners over the coming months.
Through this transaction we will also get to be more directly in charge of marketing, distribution and other business-to-business deals. This enables further financing and partnership opportunities which will help us to grow the Control 2 and Condor, as well as the whole Control franchise into an even greater success than before.
Remedy’s CEO Tero Virtala says: “Ever since we signed up with 505 Games in 2017 to develop and publish Control, we have enjoyed a good partnership in building Control into a successful game that has sold over 4 million units and generated shareable net revenue of approximately EUR 100 million to Remedy and 505 Games. As part of Remedy’s long-term strategy to have more ownership over our business and the IPs we have created, we have gotten back all rights for Control and the in-development Condor and Control 2. Having complete ownership over the Control franchise gives us the freedom to decide the best path forward. We will consider our options carefully, knowing that Control is considered an attractive franchise by many partners. Condor and Control 2 have both progressed well in recent months and we expect these projects to reach their next development stages during the first half of 2024. The development of Condor and Control 2 will continue normally when we consider the best publishing, distribution and financing model for these projects.”
Tero Virtala continues, “As we amicably part ways, I would like to take this opportunity to thank the 505 Games team for our partnership over the years and for helping to establish Control as a gaming franchise with a lot of future potential.”
Remedy rescheduled the Financial Statements Bulletin 2023 due to the negotiations related to this transaction. As announced on February 6, 2024, Remedy will publish its Financial Statements Bulletin 2023 on March 20, 2024.
REMEDY ENTERTAINMENT PLC
More information
Tero Virtala, CEO
Phone: +358 9 435 5040
Email: tero.virtala@remedygames.com
Veli-Pekka Puolakanaho, Head of Corporate Development and IR
Phone: +358 50 430 0936
Email: veli-pekka.puolakanaho@remedygames.com
Thomas Puha, Communications Director
Email: thomas.puha@remedygames.com
Remedy in brief
Remedy Entertainment Plc is a pioneering, globally renowned video game company founded in 1995 and headquartered in Finland with an office in Stockholm, Sweden. Known for its story-driven and visually stunning action games, Remedy has created multiple successful, critically acclaimed franchises such as Control, Alan Wake and Max Payne. Remedy also develops its own Northlight® game engine and tools technology that powers many of its games. www.remedygames.com