contentSlug

type

ContentSlug_ContentQuery

slug

ContentPageContentQuery

content

trendingContent

query ContentSlug_ContentQuery(
  $contentSlug: String!
  $type: [ContentType!]
) {
  ...ContentPageContentQuery_13QmVO
}

fragment CompanyDetails_Content on Content {
  __isContent: __typename
  companies {
    name
    description
    pageUrl
    id
  }
}

fragment ContentBasicInfo on Content {
  __isContent: __typename
  id
  type
  title
  lang
  companies {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  tags {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  ...PublishingDetails
  ...Reactions
}

fragment ContentMetadata on Content {
  __isContent: __typename
  type
  title
  lang
  pageUrl
  alternatePageUrls: translations {
    __typename
    pageUrl
    lang
  }
  imgUrl
  description
  ... on Video {
    liveTime
    videoUrl
  }
  ... on Webcast {
    liveTime
    videoUrl
  }
}

fragment ContentPageContentQuery_13QmVO on Query {
  content(slug: $contentSlug, type: $type) {
    __typename
    id
    type
    title
    isPremium
    lang
    htmlBody
    summary
    companies {
      forum {
        latestPosts {
          ...ForumPosts
        }
      }
      name
      id
      viewerIsFollowing
      pageUrl
      defaultInstrument {
        isin
        id
        marketOpen
        marketClose
        marketplace {
          region
        }
        returns {
          total
        }
      }
    }
    tags {
      viewerIsFollowing
      id
      name
      pageUrl
    }
    createdAt
    ... on Video {
      liveTime
    }
    ... on Webcast {
      liveTime
    }
    slug
    ... on CompanyReport {
      reportUrl
    }
    ... on ThirdPartyCompanyReport {
      reportUrl
    }
    ... on StockExchangeRelease {
      reportUrl
    }
    ...ContentBasicInfo
    ...ContentMetadata
    ...PriceAndRecommendation_Content
    ...CompanyDetails_Content
    ...ReportLink_Content
    ...KeyFigures_Content
  }
  ...TrendingContent_1jQ2Cn
}

fragment ForumPosts on ForumPost {
  text
  likesCount
  url
  author
  postedAt
  authorImgUrl
}

fragment KeyFigures_Content on Content {
  __isContent: __typename
  companies {
    defaultInstrument {
      estimateData {
        modelType
        reportingCurrency
      }
      snapshot {
        transaction {
          date
          actualized {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
          }
          estimates {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
          }
        }
      }
      id
    }
    id
  }
}

fragment PriceAndRecommendation_Content on Content {
  __isContent: __typename
  createdAt
  companies {
    name
    pageUrl
    defaultInstrument {
      priceData {
        tradeCurrency
      }
      snapshot {
        priceData {
          date
          lastPrice
          tradeCurrency
        }
        transaction {
          date
          recommendation
          targetPrice
        }
        prevTransaction {
          recommendation
        }
      }
      id
    }
    id
  }
}

fragment PublishingDetails on Content {
  __isContent: __typename
  createdAt
  publishers {
    name
    imgUrl
  }
  authors {
    __typename
    id
    name
    slug
    imgUrl
    jobTitle
  }
  ... on Video {
    liveTime
  }
  ... on Webcast {
    liveTime
  }
}

fragment Reactions on Content {
  __isContent: __typename
  id
  reactionGroups {
    reactionType
    reactionsCount
    viewerReacted
  }
}

fragment ReportLink_Content on Content {
  __isContent: __typename
  type
  isPremium
  ... on CompanyReport {
    reportUrl
  }
  ... on ThirdPartyCompanyReport {
    reportUrl
  }
  ... on StockExchangeRelease {
    reportUrl
  }
}

fragment TrendingContent_1jQ2Cn on Query {
  trendingContent(type: ARTICLE) {
    __typename
    id
    title
    lang
    pageUrl
    createdAt
    type
    imgUrl
    companies {
      squareLogoUrl
      name
      id
    }
    authors {
      __typename
      imgUrl
      id
    }
    publishers {
      imgUrl
    }
  }
}


remedy-extensive-report-leveling-requires-more-patient-play

__typename

title

isPremium

lang

htmlBody

summary

companies

createdAt

publishers

authors

reactionGroups

pageUrl

translations

imgUrl

description

Analyst

Atte Riikola

Remedy Entertainment is a game developer. Its operations are primarily focused on the development of action games, with a particular focus on 3D technology. Examples of games that the company has developed include several different versions of Alan Wake, Max Payne, and Control. Remedy also develops its own game engine and tooling technology that powers many of its games. The company was founded in 1995 and is headquartered in Espoo, Finland.

In other news, Resonant’s wishlist estimate updated to Gamalytic Half a million wishlists surpassed on Steam. Plus consoles on top of that.  Currently ranks 84th in Steam wishlists (SteamDB). Roughly a million would put it in the TOP 20 and 1.3-1.5M in the TOP 10. I stick to my previous estimate that there are good chances for this to be a TOP 10 wishlisted game by launch.

Here are the updated forecasts. While working on Excel, I noticed that the depreciations for the Control rights on the balance sheet were still assumed with the previous 2027 release schedule, so I had to fine-tune the forecasts for these as well. These relate to when Remedy bought back the publishing rights for Control from 505 Games. Of course, there’s no exact visibility into those depreciation schedules, so the assumptions are still partly incorrect

In Remedy’s case, EBIT and EPS figures are quite unhelpful in the coming years, as amortizations of capitalized development costs weigh them down. Amortizations are made very front-loaded in relation to the sales of their own game releases, so a large part has already been amortized in the first year, and almost all capitalized expenses within, say, 3 years. Partially, those capitalizations of development costs also supported Remedy’s results at one point in 2021-2022. And Remedy’s business model has also changed over the years, so one cannot really find any indication from the historical figures of how the figures will develop in the future. It can be stated that if Control Resonant and other upcoming self-published games sell well, Remedy’s cash register will ring on a completely different scale than what has happened in history.

Akee brought up an interesting point. I dug through some old figures from the peak years of the hype. Indeed, looking at these numbers, I’m a bit surprised that Remedy isn’t really achieving better results in 26-27 with quite good sales assumptions. What is the reason for falling so clearly behind the 2020-2021 figures?

It’s really good that you spotted that. I shouldn’t fool around with assumptions myself. Remedy’s forecast model is probably the most complex of my cases, as forecasting isn’t always straightforward. I might as well go through the other assumptions now, an update will follow

Sorry @Atte_Riikola, I didn’t mean to open a can of worms and cause extra work. I genuinely believe that you have done a commendable job with your analysis, for example, with a good scenario-based approach. Over time, I have learned a lot from your analyses and developed as an investor to the point where I can occasionally question things. Thank you for that ! I started asking about this out of genuine interest when the weak earnings development puzzled me, and I had to go back and consider if I had missed something in the analysis. I understand that more pessimistic assumptions would yield the same outcome as the current analysis, and I believe more pessimistic assumptions could be very well justified, for example, regarding revenue sharing or distribution costs, and certainly in other respects as well. However, the conclusion of the current analysis is such that even with excellent performance in the coming years, good sales success of games, and optimistic assumptions for revenue sharing and distribution costs, the company would not be able to make hardly any profit. At least for me, the question would arise: on what basis would the company then make a profit in the future? In the analysis, the company would not even reach the operating profit percentage of a mediocre IT consulting firm by 2030, even though the most important value drivers are already in place (self-publishing, multi-project). In that case, I believe the investment thesis of the analysis can be justifiably questioned. If cash flows are far off and earnings-based multiples are expensive in the coming years, I think it’s difficult to justify that the valuation/share would receive significant support from future releases. Especially when the company has been making heavy losses for years in a row with thin evidence. In the name of transparency, it may not come as a surprise to those reading the thread that I naturally have a conflict of interest here, as Remedy is significantly overweight in my portfolio, and my opinions should naturally be interpreted in that light. However, my intention is not to try to influence the analyst or the analysis, but to understand whether the error is in the analyst’s models or my own, as they were contradictory with the same assumptions.  In my opinion, these are somewhat open to interpretation depending on the language. Someone could, for example, ask about this in the next webcast, if they remember. Eng tiedote  Remedy will receive a greater revenue share from game sales after the initial investments have been recouped, proportional to the amounts invested.  Fin tiedote  After the recoupment of initial investments proportional to the amounts invested, Remedy will receive a greater share of game sales.

You sure are a precise guy, Akee! And I’ve been tangled up with my own Excels over the weekend. My calculations for Annapurna’s share are correct for 2026. Marketing costs of about 8 MEUR have also been deducted there, in addition to distribution costs, when calculating Annapurna’s share. And an assumed 50% share for Annapurna from net profits until the game’s production budget is covered. After this, from 2027 onwards, a 30% share for Annapurna has been assumed, but for that, the formula indeed now refers to gross revenue, from which only taxes have been deducted. On the other hand, we don’t currently know if that 30% assumption is correct, and of course, we also don’t know the game’s future sales figures, so there’s always uncertainty in these calculations. But if we keep the other assumptions unchanged, then it certainly has a clear upward effect on earnings forecasts from 2027 onwards. At this point, my assumption for the game’s release at the end of Q2 (practically June) is also still uncertain. When updating the forecasts, I debated whether to put June or August, but I thought kicking the can down the road would be easier later on, I’ve had years of experience with that  But the next time the forecasts are updated, I must remember to re-examine Annapurna’s share as well.

Remedy Entertainment

Remedy is now building the next growth leap of its strategy with the 5 major game projects under development. This will be reflected in rising costs between 2022 and 2023, but enable significant earnings growth particularly in 2025-2026, driven by increasing royalty income. 

<p>Remedy is now building the next growth leap of its strategy with the 5 major game projects under development. This will be reflected in rising costs between 2022 and 2023, but enable significant earnings growth particularly in 2025-2026, driven by increasing royalty income. In terms of long-term growth potential, we see the share's risk/return ratio as attractive, but with our lowered forecasts, this will take longer to materialize than previously expected. Thus, in the short term, the attractiveness of the stock has weakened compared to our previous estimates. </p> 

	2021	22e	23e
Revenue	44.7	48.1	46.6
growth-%	8.9 %	7.4 %	-3.0 %
EBIT (adj.)	11.4	6.7	0.6
EBIT-% (adj.)	25.5 %	13.9 %	1.4 %
EPS (adj.)	0.67	0.39	0.03
Dividend	0.17	0.17	0.17
Dividend %	0.4 %	1.1 %	1.1 %
P/E (adj.)	59.0	40.9	500.6
EV/EBITDA	33.0	18.8	49.6

Remedy (Extensive Report): Leveling up requires more patient play

Key Estimate Figures2022-06-02

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