Paradox Interactive have posted results for the first quarter of 2019, and although the company saw a drop in revenue and operating profit, but CEO Ebba Ljungerud attributes it to growth and record-high investments deemed necessary.
So, Q1 2019 revenues dropped by 11 per cent, while operating profit dipped by as much as 55 per cent, with Paradox attributing most of the revenue to Hearts of Iron IV, Cities: Skylines, Stellaris, Europa Universalis IV and Crusader Kings II.
Ljungerud wrote that the quarter has seen a specific focus on long-term growth and expansion in several core departments. "During the quarter, we invested more in both game development and marketing than we did in any previous quarter", she said.
Vampire: The Masquerade - Bloodlines 3 also saw Paradox achieve a first of sorts, as it featured the company's largest marketing campaign, along with investments in development and publishing capacities.
Paradox also increased its workforce by 47 per cent, which is definitely a welcome break from the sort of news we hear lately, and they're up from 287 to 423 employees, all since the first quarter of 2018.
"These investments in development, marketing and organisation need to be done well in advance of the games being released and thus before we get a return on these investments", Ljungerud added.
She also reminded that Paradox's margins will be lower in the development phase, "an effect that will be very noticeable when [they] simultaneously have a quarter with fewer major game releases."
As for individual performance, Hearts of Iron IV expansion Man the Guns broke the franchise's sales records, and Paradox are delighted that their games continue to garner interest and generate revenue for a long time after launch.
"Long-life games and a business model that gives us continuous revenue during the game's lifetime are central to our strategy", Ljungerud said.
Paradox also opened a new development studio Paradox Tectonic, which is located in Berkeley, California, and is led by Rod Humble, who ran The Sims at EA and went on to become CEO of Second Life developer Linden Labs.