Remedy’s possible business models include partner IP projects, own IP projects with a publishing partner, co-publishing projects and self-publishing.

In partner IP projects, Remedy’s partner funds the development of the game and Remedy develops it according to agreed specifications. Remedy receives development fees, typically with a margin, as the game development reaches the jointly agreed milestones. Remedy or the partner originates the game concept. In this model, the partner retains control of the intellectual property rights to the game and publishes, distributes, and markets the game. The project can include a royalty opportunity, typically after recouping development and marketing investments, for Remedy that is tied to the game’s success. Partner IP projects carry a lower financial risk for Remedy, but participation in the game’s success is also limited.

In own IP projects with a publishing partner, Remedy’s partner typically funds the game development, partially or in full. Remedy creates and retains the intellectual property rights of the game and is responsible for the development of the game. The partner publishes, distributes, and markets the game. As the game development progresses, Remedy receives development fees upon reaching the agreed milestones. Unlike in partner IP projects, these development fees are typically without margin, as they are intended to only cover Remedy’s development expenses to the level agreed with the publisher. Once the game is launched, these development expenses, the partner’s marketing costs, and other costs may be recouped against game sales. After the development, marketing, and other agreed costs are covered, Remedy starts receiving royalties from game sales. Own IP projects carry a higher financial risk but also a greater royalty potential for Remedy.

In co-publishing projects, Remedy and its partner co-fund the development of the game. Remedy carries the main responsibility for the development, while publishing, distributing, and marketing responsibilities are distributed between the two companies as per agreed terms. For Remedy, co-publishing projects carry a relatively high financial risk but also a greater royalty potential. In these projects Remedy is also more involved in the commercialization of the game. Typically, the royalty potential reflects the split in the project financing.

Self-publishing is a new publishing model for Remedy owned IPs. It has the highest financial risk but also the greatest revenue potential through game royalties. In self-publishing projects, Remedy fully funds the game development and marketing. As Remedy also acts as the game publisher, all royalties are directly realized as revenues after deducting sales related taxes and discounts. Platform fees, quality assurance, and localization are recognized as expenses.

Two commercial models for games

1. Premium fixed price games with additional payable downloadable content (DLC)
Games such as Control and Alan Wake 2, as well as some of the games in the development pipeline, such as Control 2, are in this category. These games are AAA titles, and they are either published and distributed by a publishing partner or, in a co-publishing model, co-published and distributed by Remedy and a publishing partner.

2. Service-based fixed price games with additional payable downloadable content
This can become an increasingly important commercial model for Remedy in the future. These are premium games that may have a lower initial price point but a long tail of revenue through updates, game expansions and potentially microtransactions. For these games, a key differentiator is the post-launch live operations phase meant to keep players engaged for years. This model will be used for example in FBC: Firebreak, a multiplayer spin-off game of Control.