Paradox changed the way it invests into new games after Life by You and The Lamplighters League

Publisher wants to be more careful in the future

Paradox Interactive

It’s been a rough stretch of road for Paradox Interactive in the last year or so with big setbacks like the cancellation of Life by You, divestment of Harebrained Schemes, and very difficult launch of Cities: Skylines 2, but the company leadership has been actively evaluating all of these situations and took steps to prevent their repetition.

Aside from focusing on what the players want and stepping up testing, the company changed the way it approaches projects outside of its core niche as well as with third parties. 

One of the problems with Life by You was that it became too big too quickly, preventing the team from making changes after community feedback came in. To prevent this from happening again, similar projects outside of Paradox’s core strategy niche will start on a much smaller scale and under stricter oversight at Paradox Arc, Deputy CEO Mattias Lilja tells me at a press event.

“We should still take risks, but with much smaller teams to start with,” he explains. “We perhaps need to be a bit more patient. I don’t think that more money early will fix it. More likely it’ll make things worse.”

In addition to smaller investments and longer pre-production phases, the company is widening its peer review system and wants testers to get a look at projects earlier than before to provide valuable feedback at a point where big course corrections can still be made – again, the sour experience with Life by You seems to be a big catalyst and learning experience in this regard.

Mattias Lilja is the Deputy Chief Executive Officer at Paradox. / Paradox Interactive

Lilja emphasizes that even though these decisions have already been made, it will take a while before players will get to see the results of those systemic changes. “The long dev cycles mean that these games don’t come out now,” he says. “The issues that show up now were decisions made years ago.”

One of the challenges Paradox faces due to the niche nature of its games is a lack of data on certain aspects, which sometimes makes it difficult to plan out new releases and investments. 

“We looked at Victoria 3 and asked how much we should invest into it,” Lilja elaborates. “How many copies could it reasonably sell? The only data that we had was our own data, because there are not many games online on Steam that you could sort of harvest for a good statistical model. I don’t exactly remember what we came up with, but it was something really ridiculous like ‘We think it will sell between 100,000 and a million copies.’ Okay, good. Thank you. That’s the best we can do with the data we have.”

Recent experiences also somewhat dampened the company’s enthusiasm for working with unproven third-party studios. Though Paradox won’t stop working with third-party developers in general, Lilja explains that “it has to be really well established. It would probably also have to be closer to us when it comes to fan overlap for us to be willing to take those kinds of larger risks.”

A good example for this would be Triumph Studios, which delivered a smash hit success in the form of Age of Wonders 4 and its DLCs last year and which just announced Expansion Pass 2.

“Finding the right size of the investment for the risk we take is the trick.”

- Mattias Lilja

“We don’t have any problem with third-party,” Lilja emphasizes. “We have a problem with big third-party investments and that’s what we’re going to stay away from quite a lot.”

Although Paradox wants to be more careful about its investments and focus on its core niche, the company will not stop its attempt to break into “adjacent genres” like turn-based strategy.

Lilja names Millennia as an example for such an experiment that may not have paid off, but wasn’t a massive loss either. “It’s a nice little game,” he says. “It didn’t really take off, but it didn't cost us the bank. We can try and fail and be fine. We like the team who did it, it’s a nice game, not commercially viable – but that’s the gaming industry. If it had been much bigger and more expensive, it would not be something we’d be interested in doing again. Finding the right size of the investment for the risk we take is the trick.”

On the other side of the coin stands something like The Lamplighters League, a turn-based tactics game from Harebrained Schemes. It was not a commercial success and led to the developer and Paradox going separate ways shortly after release. Lilja says that the game “was reasonably well reviewed, but it had very few players. It was clear to us almost immediately that this was not a game that we could invest into. We wouldn’t have a fan base that we could cater to for a long time.”

He says that the turn-based tactical genre also seemed to be oversaturated: “In some genres there’s a first, second, and third place, maybe even a fourth or fifth place.” That was not so for turn-based tactical games.

Since Harebrained Schemes specialized in games of this type, it “felt unrealistic” to force them to pivot. “We talked to them on how to handle the situation. We don’t want to make more of these games and we can’t really continue with this game. So they took over and took their own path.”

“The game wasn’t necessarily bad, but the market wasn’t there and we didn’t see a way to come out of that,” Lilja explains.

Expanding the audience of the company’s core games is still a goal, but Lilja makes it clear that it can only happen without compromising on their complexity – it’s the on-boarding in which there is the most space for improvement. It’s similar for console development: Paradox only considers a console version when there’s a natural way for a game to be played with the controller. There is little overlap between the teams in most cases, so the PC version doesn’t suffer too much from the development of a console version either.

In general, Paradox wants to keep focusing on developing its core games and then expand them over many years after their launch – and it currently doesn’t envision a major change to the way it does that, namely by releasing a lot of DLC.

“The DLC model is the one we know and fans like it,” Lilja states. “There is always a discussion about content versus price or quantity versus price, but generally people want us to release more. We are going to innovate, but maybe not in a radical fashion. We are looking at what type of content, how it’s presented, and its size. What size do fans want? Right now it looks like larger content drops are more appreciated.”

“If it’s something we want to keep building on in future DLC, it needs to be free.”

- Henrik Fåhraeus

For Paradox CCO Henrik Fåhraeus one of the biggest challenges the company’s ways of doing DLC is balancing the amount of paid content in comparison to what the free updates that come with each expansion deliver. “We have a lot of guidelines for this,” he says.

“If it’s something we want to keep building on in future DLC, it needs to be free,” he explains. “If we mess with any kind of core mechanics, usually it has to be free. UI improvements should be free, though there is some disagreement here among our game directors. The paid features should be kind of modular, not connected to everything else. I think one good example would be, say, we give you an inventory system. It’s free, but there aren’t that many items that are free and then we’re filling it with paid swords and armor and stuff like that. So that’s one way of doing it, which is working quite well.”

Henrik Fåhraeus is the Chief Creative Officer at Paradox. / Paradox Interactive

Figuring this out was a long and sometimes painful learning process, though. “Especially in the CK2 and EU4 time frame, we made a lot of mistakes and learned a lot, so I think we’ve gotten much better at it,” Fåhraeus says.

“The opposite problem is it’s not really related, but if we patch something that isn’t received well in the base game and release that along with a paid expansion, people will review-bomb the DLC regardless of whether that content is actually tied to it. So that’s a pitfall – it’s something we really want to avoid,” he elaborates on another consequence of the current system.

Paradox’s experiments with subscription services didn’t kick off a revolution, but Lilja says that there is an audience for consuming its games in this way, so it seems like it will stick around.

Speaking of bringing new fans into an ecosystem, I ask Lilja about the value of IP – after all, there is the shining example of Total War: Warhammer to draw upon. Creative Assembly managed to make big waves by combining its strategy series with Games Workshop’s setting.

“I would not rate IP as the most important part of a video game.”

- Mattias Lilja

He says that people “should have a high bar” for spending money and that’s one of the things that make it harder to establish new IP – people pivot to known brands, as it means “taking less risk with their game time and budget. They go to games that they feel more sure about, which might be an IP they know, a sequel, or even and old game that’s been heavily modded rather than buying a brand-new one. We are affected by that at the moment, but maybe not as much – at least in the core games – as some other people.”

At the same time, de doesn’t place too much value on IPs, naming Stellaris as an example. Paradox put out some Stellaris-themed games and worked with Star Trek as a large third-party IP – in both cases, the results weren’t something to sing epics about. “Was it our execution, or did the IP not transfer that well? Probably a mix of both in that case,” Lilja says. To him, the importance of IP is much stronger in the movie business compared to video games. “I would not rate IP as the most important part of a video game.”

Fåhraeus largely agrees with him. He says that there have been some discussions about this topic internally in the past, but so far there simply hasn’t been a compelling offer. “I would definitely not rule it out,” he states. “It all comes down to the contract and the business case for something like that. It’s an open path.”

“The problem with IPs is that with some of them you don’t want to get restricted too much by the lore,” he points out. “Something like The Lord of the Rings, while I love it, would be difficult. There are some IPs more difficult to work with than others.”

Both Lilja and Fåhraeus would love to take a crack at developing a game set in George R. R. Martin’s “A Song of Ice and Fire” universe, which was a major inspiration for Crusader Kings.

“I think we’re still quite willing to explore new IPs,” Fåhraeus says. “For me, it’s always about gameplay. Gameplay is the hard thing, IP is kind of a dressing, right? So getting the gameplay mechanics fun, getting the core feel rewarding. If you want to keep playing, that’s the key – IP is a little second level.”

In Fåhraeus’ view, if a strong prototype for a game exists, it could easily be ported to some sort of fitting IP: “I’m quite open to exploring new IP. I’m not too afraid of that.”

In general, the settings for Paradox’s games are mostly down to the individual game directors, which is connected to what Lilja reported about the lack of data Paradox suffers from – a lot of the greenlighting and settings comes down to gut-feeling. “If they don’t feel passionate about the idea, we shouldn’t do it,” Fåhraeus confirms. “I don’t believe in mercenary development. And that’s also something we learned on the publishing side over the last few years. It’s pretty hard to give someone a concept and say, ‘Hey, you are mercenaries now, make this.’ It has to come from them.”

“I’d rather have someone come to me and present these two or three ideas so I can go ‘Alright, this is going to be hard to realize, this is very niche and will probably not cater to many players, but this has promise.’ I think that’s key,” he concludes.