Remedy’s current business models include partner IP projects, own IP projects with a publishing partner, and co-publishing projects. In the future, Remedy also has the possibility to self-publish games.
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, 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 for Remedy that is tied to the game’s success. Partner IP projects carry low 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 funds the game development, partially or in full. Remedy creates and retains 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. Once the game is launched and depending on contract terms, these development fees, 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 greater royalty potential, as Remedy is more involved in the commercialization of the game. Typically, the royalty potential reflects the split in the project financing.
Self-publishing is a potential future publishing model for Remedy. It would have the highest financial risk but also the greatest revenue potential through game royalties. In self-publishing projects, Remedy would fully fund the game development and marketing. As Remedy would also act as the game publisher, all royalties would be directly realized as revenues after deducting fees related to e.g. store fees, value added taxes, quality assurance, and localization. At the end of 2022, Remedy did not yet have self-publishing projects in development.
Three commercial models for games
1. Premium fixed price games with additional payable downloadable content
This is the model used in the majority of Remedy’s existing games. Games such as Control, as well as some of the games in pipeline, such as Alan Wake 2 and Control 2, are in this category.
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 have a lower initial price point but a long tail of revenue through game expansions and other ways of keeping players engaged for years. This model will be used e.g., in codename Condor, a multiplayer spin-off game of the award-winning Control.
3. Service-based free-to-play games with live operations
This type of games have a heavy emphasis on the postlaunch live operations phase. These games are long-lasting experiences where monetization is typically based on microtransactions, or subscriptions and players are kept engaged by the release of new expansions and updates on a regular basis.