Alan Wake 2’s Rocky Road to Profit: A Deep Dive into Remedy’s Strategy

Alan Wake 2 by Remedy Entertainment was one of the most highly anticipated sequels in quite some time, but while it shouldn’t surprise that critical response has not changed much with its engrossing storyline and smooth gameplay, financial performance has proven to be more than a few surprises. Despite enjoying a range of critical success such as an 88% score from PC Gamer and the title ‘Best Story 2023’, it still hasn’t managed to turn a profit six months into its post-launch life. This has left many wondering what the future of the franchise is and what the company is hoping to do.

In the Business Review for January-March 2024, CEO of Remedy Tero Virtala revealed that Alan Wake 2 had sold 1.3 million copies by the beginning of February. The game has so far covered ‘a significant part of the marketing and development expenses’, without reaching break even. The high average selling price of the game and its continuance in sales notwithstanding, the company has taken an operating loss of €2.1 million in the first quarter of 2024.

It’s not all doom and gloom, however. Remedy often enjoys successes that burn slowly, as evidenced by Alan Wake Remastered, which similarly did not provide royalty income in its first quarter yet continued to add to the company’s growing royalties year-on-year. That would suggest this could be the pattern for Alan Wake 2.

That optimism is in no way unfounded, however, as Remedy has recently reacquired the rights to another successful franchise in Control, enabling the company to ‘freely decide on the future’ of both that and Alan Wake. In fact, this opens possibilities for self-publishing and partner publishing-a long-term result that could also generate much higher profits with greater financial independence.

Remedy is not resting on its laurels.

It has several projects in the pipeline, like Condor, a multiplayer spin-off of Control, which has just entered full production. Close to the end of its proof-of-concept phase, Control 2 hits maximum stride, and Max Payne remakes ramp up production soon. Still in concept, codenamed Kestrel, the free-to-play multiplayer project would set a very diverse and ambitious road ahead for the company.

Regardless of the current financial hiccup, Remedy remains optimistic that its revenue and operating profit will improve throughout 2024. The studio intends to provide more context once the business model and possible deals for Control 2 and Condor fall in place.

There’s a catch for PC gamers who prefer Steam over other platforms.

When asked about a potential Steam release for Alan Wake 2, Virtala stated that it’s a ‘speculation that we cannot at the moment do’. For now, the game remains an Epic Games Store exclusive, which may have contributed to its slower-than-expected sales, as some players are holding out for a Steam release.

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The community too shared their voices about the matter. Some argued that a lack of physical release and missing from Steam made the huge difference in financial success. Others feel future DLC will lift those numbers, while many just say how much they love the game, and are sad to see it hasn’t sold to where the game merited.

Well, for Alan Wake 2, in its path to profitability, it is not that clear-cut and depends on each and every single strategic decision taken, also on market conditions, and even on the players’ preferences. But over the years, Remedy Entertainment has stood against adversity with remarkable resilience and agility, having a strong portfolio of projects and a clear vision toward the future.

The first step into the brighter future is Remedy Entertainment embarking on a crossroads, known as Alan Wake 2. While the game may underperform financially, the vision for the future by the company seems undeterred and ambitious. Going forward, self-publishing and partner publishing will be the norm, as Remedy prepares to take matters into their hands and make full use of the intellectual property at their disposal.

The acquisition of the rights to Control marks a pivotal moment for Remedy.

It represents something more than the reclaiming of a very successful franchise, but it’s representative, too, of the new freedom which allows Control and Alan Wake to forge their own destinies now. It is a strategic maneuver, in many ways-the motivation is not entirely creative control; there is financial independence, too. It might mean that, by venturing into the domains of self-publishing and partner publishing, Remedy is just opening itself to the possibility of a future in which it can finally reap the benefits of its creative efforts directly and without any interference or profit-sharing with third-party publishers.

The world of gaming has always been at a spot of fluctuation, and digitization in game distribution has thus far proved to be a two-edged sword. On one hand, it lowered the barriers to entry for developers since they can reach audiences without the need for physical distribution. On the other hand, it has caused market saturation and the challenge of standing out in a crowded digital storefront. This decision is further supported by Remedy’s choice of launching Alan Wake 2 as an Epic Games Store exclusive. While this deal likely came with some financial incentives, it also limited the immediate reach for the game, particularly to the huge user base on Steam.

Gamer opinion regarding the lack of a Steam release is mixed. Some gamers have sworn absolute allegiance to Steam and perhaps even view its ecosystem as a sort of default for PC gaming. Admittedly, the decision to hold Alan Wake 2 back from Steam-for now-has had an impact on sales. All the same, one needs to remember that exclusivity deals are usually time-limited. Although Remedy has not confirmed a Steam release, this possibility is still open in the future. In case Alan Wake 2 ever makes it onto Steam, sales may increase all that much, joining ranks with many other titles to have simply done the same.

Remedy is also exploring other avenues to bolster its financial standing.

All these diversified pipelines are a good indicator of growth and innovation within the company. Condor, the multiplayer spin-off of Control, entered full production as it marked Remedy’s first move into developing multiplayer games. Control 2 reached the end of its proof-of-concept stage, promising a return to that universe with some fresh ideas. With the Max Payne remakes, production will soon ramp up and take the series on a nostalgic ride for older fans, taking it to a new generation. Then, of course, there’s the free-to-play multiplayer project codenamed Kestrel, which, although still in its conceptual stages, does show that Remedy does know how to move with the times.

The financial performance of Alan Wake 2 is not a solitary performance; rather, it mirrors broader challenges the industry faces. For most developers, high development costs, marketing expenses, and the need to rise above the saturated market are hurdles to overcome. Remedy’s experience with Alan Wake Remastered serves as a reminder that profitability can be a slow burn rather than an immediate blaze. Patience and strategic planning form the imperative here, and Remedy seems to have those in aplenty.

Looking ahead, Remedy does so confident that its revenue and operating profit will improve during the course of 2024. The company is not without grounds for such optimism. But with a solid pipeline of future projects and a crystallized vision for its franchises, Remedy will likely ride the initial financial disappointments of Alan Wake 2. A gamming community seems to also have spoken their voice of support, with messages ranging from “This is a game that I love so much” to “Hoping there will be more content eventually”. The Alan Wake 2 story is far from over. It’s a story not of the game itself but of the struggle of the company on its way through the various difficulties built up by the modern gaming industry. The commitment of Remedy to its craft, its adaptability, and strategic foresight are going to be the guiding stars that shall see it through the murk in the fields of game creation and publishing. While the company presses forward, it does so cognizant that not all successes are immediate but always attainable through determination and innovation.