Paradox is taking a write-down on The Lamplighters League

Just one week after its release, Paradox Interactive has revised its sales forecast for The Lamplighters League. In a public statement, Paradox Interactive revealed they would be writing down capitalized development cost on the turn-based RPG. The publisher announced it plans to write down MSEK 171, or roughly $15.7 million USD.

Per Investopedia, a write-down is an accounting action that reduces the value of an asset to offset a loss or expense. The write-down is based on a revised sales forecast established after the game’s release.

The statement goes on to reveal the capitalized development costs of The Lamplighters League to be MSEK 320, which equates to about $30 million USD. The newly revised sales forecast puts the fourth quarter profit impact estimates for the game at MSEK -248, which is just shy of $23 million USD.

“The Lamplighters League is a fun game with many strengths. Even though we see cautiously positive player numbers in subscription services, the commercial reception has been too weak, which is frankly a big disappointment. Game projects are by their nature always risky, but at the end of the day we haven’t performed at the level we should. It is painful but makes us more eager to roll up our sleeves and do better.”

-Fredrik Wester, CEO of Paradox Interactive

Essentially, Paradox is saying The Lamplighters League is off to a slower start, so it’s writing down expenses as a loss it doesn’t expect to immediately recoup. Paradox Interactive is a publicly traded company. As such, they are obliged to disclose this information pursuant to the EU Market Abuse Regulation (EU nr 596/2014).

As a reminder here, The Lamplighters League just released a week ago on October 3. Hopefully, this is just Paradox Interactive mitigating its own economic risk, and not a sign of things to come in a recently hectic industry.