Remedy Entertainment

We looked at the current valuation levels of listed gaming companies and their growth and profitability forecasts for the coming years. The companies are divided into three groups: 1) Mobile games companies, 2) Console and PC games companies, and 3) Multi-platform games companies, a group of gaming giants. We also briefly review interesting companies in the sector.

With the release of Alan Wake 2 on October 27, Remedy's investor story is gradually moving into a phase of profitable growth after years of strong investment. In our view, the valuation of the stock already prices Alan Wake 2 for good success, and the other projects in the pipeline are also expected to create value.

Alan Wake 2 has a new release date of Friday, October 27. The move is due to the busy October release window, which will see a number of big games.

In our view, Remedy's share valuation is already pricing in good success for Alan Wake 2, due for release on October 17, 2023, and other projects in the pipeline are also expected to create value. We are particularly confident in the success of the traditional AAA game projects under development, whereas the multiplayer projects Condor and especially Vanguard are the biggest question marks at this point.

Remedy will report its Q2 results on Friday at 9.00 am. This year, Remedy is still clearly in an investment phase as the company builds its strategy for the next growth leap with 5 major gaming projects under development. Thus, in light of the figures, the Q2 report will be weak and the progress of game projects in the pipeline will be the most relevant thing at this point. The release of Alan Wake 2 on October 17 will obviously be the key event of the year and also a key near-term driver for the stock.

We reviewed the valuation levels of the technology companies we monitor using earnings- and sales-based multiples for 2023 and 2024. The group of companies is very diverse and includes companies in different development stages and varying growth and profitability profiles.

We believe that Remedy's current market cap of about EUR 350 million already prices good success for Alan Wake 2 to be released on October 17, 2023, and the other projects in the production pipeline are also expected to generate value.

Remedy and Epic Games announced a brand new trailer for Alan Wake 2 at Wednesday's Playstation Showcase event and that the game will be released on Tuesday October 17, 2023. More information about the game can be found in Remedy's press release and on Alan Wake’s website, where the game is also available for pre-order. Based on a quick review, initial reactions to the trailer from players on social media seem largely positive.

Remedy's Q1 figures were weak as expected, with the company's 5 game projects in development this year mainly showing up as costs in the income statement. However, the company's investment story is about to enter an interesting phase with the release of Alan Wake 2 at the end of the year, which will also be a key short-term driver for the stock.

As expected, Remedy's Q1 results reported this morning were clearly in the red, with low development fees recorded in the early part of the year due to timing factors. The company is still clearly in the investment phase this year, with five game projects under development. The most important thing to hear at this point was that projects have been progressing since the beginning of the year and that the release of Alan Wake 2 later this year is getting very close.

We have made changes to our quarterly estimates ahead of Remedy's Q1 report on April 26 at 9.00 am. On an annual basis, our estimates are largely unchanged, and this year Remedy is still in a clear investment phase as the company builds its strategy for the next phase of growth with 5 major game projects under development.