Paradox Interactive experiences a 90% profit decline following the cancellation of Life By You

Paradox Interactive has experienced a significant profit decline of 90% after deciding to cancel the game Life By You.

The company revealed its financial performance for Q2 on Thursday, showing profits dropped to SEK 28.9 million ($2.6 million) from SEK 292.9 million ($27.1 million) compared to the same quarter last year.

Included in the operating results were SEK 208 million ($19.2 million) in write-downs related to the development costs of Life By You.

The overall revenue also decreased by 22%, reaching SEK 575.8 million ($53.3 million) in the second quarter.

"We end the second quarter of the year with mixed feelings," remarked Paradox Interactive CEO Fredrik Wester. "While our core business performed well, we faced the tough decision of canceling Life By You because the game could not meet the expected standards."

"Several high-quality expansions for our core offerings have bolstered our top line and operational cash flow. Despite these positive contributions, the cancellation of Life By You has negatively impacted our profits, underscoring the need for continued improvement in our operations," Wester added.

"We've altered our approach to investments in high-risk projects since 2021, avoiding new ventures that combine high risk and high costs similar to Life By You," he explained.

Life By You was canceled last month because it didn't meet the expectations of Paradox or its community. The game was set to be the first release from Paradox Tectonic, an internal studio established in 2019 and headed by former Electronic Arts exec Rod Humble.

The cancellation led to the closure of Paradox Tectonic, affecting 24 staff members.