Alan Wake developer Remedy Entertainment has explained the 2021 remaster has yet to turn a profit, but says the long-awaited sequel is now full playable from start to finish.

The Swedish studio broke the news in its fiscal report for the year ended December 31, 2022, where it revealed that revenue decreased by 31.2 percent year-on-year to €13.6 million ($14.1 million). It also reported an operating loss of -€600,000 (-$640,000) for the fiscal year.

The company said that downturn was the result of 2022 representing a "stronger investment phase," with Remedy currently developing five triple-A projects. Four of those projects are being co-financed by the studio and are based on Remedy-owned brands, while the other is fully funded by a publishing partner.

Remedy has explained that when those projects advance to their next phases of development in 2023, its own investments will also increase, meaning more losses are expected in the current fiscal year.

"In our outlook for 2023, we expect revenue to decline from the previous year and to have a negative operating result. As described above, we are co-financing most of the projects together with our partners and all these projects are based on Remedy-owned brands increasing the value of our company in the long run," wrote the studio.

"A greater number of co-financed projects results in a smaller amount of development fees. This also impacts our profitability in the short term, as a greater proportion of development costs are covered by us. However, such investment will increase the royalty potential for the upcoming years."

Growing pains

Remedy says that pivoting to a multi-project model has been "going well" overall, but that there have also been "growth pains" along the way. For instance, the studio said it realized last year that it would need more time to actualize its vision for its (codenamed) Vanguard project, which is currently in the proof-of-concept stage.

"In the fall 2022, we chose to keep the game in the proof-of-concept phase longer and postpone the significant expansion of the development team until 2023," it explained. "The Vanguard team has made progress and continues to work on core gameplay and meta game development as well as proving the application of Remedy-style narrative and world building. The development team has been strengthened by select key hires."

Providing updates on its other projects, the company said that live-service title Codename Condor is showing great potential and remains in the proof-of-concept stage, while Max Payne 1 & 2 Remake are also making good progress.

Alan Wake 2 is currently in full production and will soon have "all content in place." Remedy said the title is now playable from start to finish, but needs polishing. It also noted that Alan Wake Remastered—which launched in October 2021—hasn't generated royalties, but expects sales to increase close to the release of Alan Wake 2.

Control 2, meanwhile, has progressed into the proof-of-concept stage, with the dev team having created "detailed concepts on the game vision and all creative areas including the gameplay, narrative, and art."

Looking ahead, Remedy reiterated that while a greater number of co-financed projects impacts profitability in the short term (while also reducing development fees), it's new development model should also "increase the royalty potential for the upcoming years." As a result, Remedy claims its business is now "fortified" for future growth.