FBC Firebreak's failure leads to €16 million loss for Remedy amid software write-down

Remedy's latest experiment FBC Firebreak is a failure, and the company has responded with a tax write down on the unsuccessful project.

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FBC Firebreak has done so poorly that Remedy Entertainment now expects its annual earnings to be negative. The studio issued a notice to investors that confirmed Firebreak will be written down in a non-cash impairment. This essentially means that Remedy no longer thinks that the game is worth as much as they once had.

"Due to weak sales of FBC: Firebreak, Remedy lowers its long-term sales forecast for the game. Consequently, the company recognizes a non-cash impairment of EUR 14.9 million, representing a majority of the game's capitalized development costs and allocated purchased publishing and distribution rights. The impairment has no effect on Remedy's cash position."

"Remedy is recognizing a non-cash impairment of capitalized development costs and allocated purchased publishing and distribution rights related to FBC: Firebreak. While we balance future investments to the title, we continue developing and improving the game in line with our updated long-term sales forecast," says Remedy Entertainment's CEO Tero Virtala.

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Remedy now forecasts an operating loss for this fiscal year, but revenue will be up as the company continues pulling in earnings from previous game sales and receiving upfront payments for new partnered titles like the Max Payne 1 & 2 Remake. In August, Remedy management confirmed that a mysterious new game was in the works, and also set an ambitious target of achieving 100 million Euros in revenue by 2027.

"Remedy expects its revenue to increase from the previous year and operating profit (EBIT) to be negative and below the previous year."

Firebreak was the first self-published game from Remedy, and based on the filing above, it was an incredibly lean product with a minimal sub-20 million euro budget. It'll be interesting to see how Remedy learns from Firebreak's failure in the future.