Paradox wants to “go back to what we’re good at” after being “overconfident”

Interview with CCO Henrik Fåhraeus and Deputy CEO Mattias Lilja

Paradox Interactive

Paradox Interactive is one of the most unique developers and publishers in the industry thanks to the niche it carved out for itself with its trademark grand strategy games – series like Crusader Kings, Stellaris, and Hearts of Iron. However, the company has been hitting a rough patch of road over the last year or so.

The release of Victoria 3 was worse than expected, the launch of Cities: Skylines 2 was rife with controversy, The Lamplighters League was a commercial flop, and its attempt at usurping The Sims with Life by You had to be aborted after costly investments. Earlier this year, Paradox CEO Frederik Wester said that the company needs “to do better” and later admitted to making some “wrong calls” in a moment of critical self-reflection.

“Despite great annoyance at our own mistakes, we have faith. Paradox's future is bright, but we need to roll up our sleeves and work hard to fully realize the potential,” Wester declared back in July 2024.

But how exactly does the company plan to achieve that? And, perhaps more importantly, how did it get into this troubling situation in the first place? Paradox invited members of the press for open talks with CCO Henrik Fåhraeus and Deputy CEO Mattias Lilja to answer these questions.

For Fåhraeus, who made it all the way from developer to game director and chief creative officer at Paradox, many of today’s issues have to do with the company’s growth over the last decade, which included a desire to expand its product range.

“I think we had a fairly reasonable strategy of growing into adjacent genres,” he explains. “We wanted to grow into RPGs, we wanted to grow into other platforms, we wanted to test if we could break into many different places at once. It made sense at the time. So what we learned in the last five, six, seven, or even eight years since we started that, is that we are good at some things and not as good at other things. Some of our recent releases are basically a result of that strategy.”

Public setbacks such as Life by You and The Lamplighters League are only the tip of the iceberg, as Fåhraeus confirms that “a lot of projects” were never announced and “cut much earlier in the development cycle.”

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

“Internally, as the company grows, there are also problems with leadership, bureaucracy, processes, and that has also hurt us a little bit,” he explains.

Deputy CEO Mattias Lilja agrees that internal growing pains have contributed to the presently visible issues, though he emphasizes that Paradox has already done some restructuring to divide its development studios, slimming down the bureaucracy at each of them. “It’s hopefully become better and easier for them [the creatives] to navigate”, he says. “They are still within the walls of Paradox and they have greater autonomy.”

“It was sort of a ‘go big or go home’ attitude.”

- Mattias Lilja

Though many of these problems took root way before the COVID-19 pandemic, both Fåhraeus and Lilja believe that the crisis exacerbated them. “I think all the companies have their version of the same story. We grew quickly, there was lots of playtime, and it was good business during COVID as a game company,” Lilja says. He adds that overall productivity dipped during those years and that Paradox – even though it’s not dependent on investments or borrowing money, unlike most other companies in the space – got “caught up in the spirit of the market.”

“It was sort of a ‘go big or go home’ attitude”, he explains. “I’m sorry and sad to say, but it probably affected us a bit, too.”

According to Fåhraeus, the pandemic negatively affected the creative culture at Paradox: “We hired a lot of people in those COVID years and what they learned in those years was basically sitting at home and not getting this knowledge sharing, this cultural atmosphere that you get at the office. That certainly didn’t help.”

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

While debt-free Paradox is in a better position than others now that the pandemic boom is well and truly over, Lilja notes that the same is not necessarily true for players. “We still get fans who feel squeezed”, he says. “They invest their money, they trust us with it. So if we don’t deliver, they’re extra annoyed, because they don’t have that much to spend.”

Therefore, both emphasize that it’s the company’s prime responsibility to once again ensure the quality of its releases and win back that precious trust. Repairing those relations is something “we have to work for,” Lilja declares. “I don’t think it’s going to come free.”

“We want to get back to what we’re really good at and make sure that it stays that way: that we are best in class in GSGs [Grand Strategy Games], best in class in large games, and that we talk to our players as much as we can, because I think we lost a little bit of that,” Fåhraeus says. “What we’re doing now is getting back to quality, to a relentless focus on what the players want, making sure to talk to them, not getting lost in hubris. It’s very important to always have this communication line open with our players.”

“The players are just like us.”

- Henrik Fåhraeus

Fåhraeus points to Tinto Talks as an ideal example for transparency – it’s a series of blogs from the company’s Spanish studio, which is very open about its current work, enabling it to collect feedback early and frequently as well as to set expectations. He admits, however, that “some of our other developers are a little more reluctant to engage as much. It can be hard sometimes, but it’s definitely something we’re pushing for and trying to make it easier for them to do as well.”

He just wants developers to talk to players “and remember that they are us, essentially. That’s the attitude I want to foster. The players are just like us. We make the games we want to play and they want to play. So just talk to them, it shouldn’t be that hard. I want to go back to that, because we used to be very good at it.”

“It’s hard to expand on all the games and find new themes that are actually resonating with the players. If you talk to players, you pick a theme that actually resonates with them – something they want, not something maybe the creative leaders want to have,” Fåhraeus says. “I think sometimes we’ve made mistakes, but the thing that’s at the back of our minds is that we’re going to cover this game for ten years or something. So why rush out the most popular things early? They’re going to come. We take the long view, usually.”

The Roads to Power DLC was a signal success for Paradox. / Paradox Interactive

He thinks that Paradox perhaps failed to emphasize this aspect about its games more recently. “It’s been a few years since we talked about this openly for all products,” he says. “We want our games to live for a long time and we want to fix all the main problems and keep improving them as long as we can. I mentioned ten years, but there is really no end. As long as players want to play, we keep developing.”

“We misunderstand what exactly fans want from time to time,” Lilja adds, but he, too, believes that listening to feedback is the key to turning things around. He lauds the “really honest and fast feedback” the company is getting on its games and says that “when we start listening to what fans want, we actually get a great response.”

He points to Victoria 3’s post-launch development and the recent release of the Roads to Power DLC for Crusader Kings 3. It’s been reviewed well and there seems to be high engagement with the expansion. “We know that when we do the right thing, people are not hesitant to come to us, so I would say the trust is there, but it’s also on us to deliver on that rather than assume we can take it for granted,” Lilja says. “We have to work for it.”

Though controversial, Cities: Skylines 2 is another example for this. It launched with “issues that should not have been there,” but “fans were very vocal and gave us very clear directions on what was important to them and we started to work our way out of there.” In the latest financial report, Cities: Skylines 2 seemed to be on the upswing as a result of those efforts.

“We kind of underestimated the known issues.”

- Henrik Fåhraeus

Aside from being “open and transparent earlier than we have been,” Fåhraeus wants to get more open testing opportunities up and running for new games and major expansions. He says that this might be “the cure” to another issue that has been persistent throughout recent releases: an abundance of bugs and technical problems. 

“It’s frustrating,” Fåhraeus says. “Sometimes we’ve known at least some of the issues, but we’ve sort of underestimated the severity of how players would actually feel. We knew Cities [Skylines 2] to have some poor performance, but not quite how bad it will be perceived. Each of these cases is very different, really. There are a few commonalities, but one would be that we kind of underestimated the known issues and how they would be perceived.”

Similar to how there is not a single reason for the company’s recent fall from grace, there is no singular cure for its ills – and no one knows that better than Paradox itself. What impresses me about Fåhraeus and Lilja is not only their willingness to admit to errors in the first place, which is rare enough on its own in today’s corporate world, but to be very frank and objective about them.

Lilja openly admits that Paradox was being “overconfident” and that it had lost sight of what its players actually wanted. Steps have been – and are being – taken to address all of that, though of course it may take a while for these efforts to bear fruit due to today’s sizable development cycles. 

Ultimately, the judgment of how well these measures work is up to the player base. It’s the fans who will hold the company accountable via their wallets, as has worked so well recently with Creative Assembly, which faced similar challenges to Paradox and appears to have turned things around successfully. As an enthusiast for the company’s games, I hope for a similar turnaround.

Aside from changing its approach to communication and transparency, Paradox is set to change the way it works with third-party studios and goes about expanding its audience.