Remedy Entertainment, the developer who hired Sweet Baby Inc. to work on Alan Wake 2, admitted that the game has still not recouped its development costs nearly a year after launch.

A screenshot from Alan Wake 2 (2023), Remedy

In Remedy’s most recent Business Review document, the company shared, “At the end of the quarter, Alan Wake 2 had recouped most of its development and marketing expenses.”

Remedy Entertainment CEO Tero Virtala also shared, “Alan Wake 2 did not yet generate royalties.”

Of note, the company did not provide any sales data for the game either.

A screenshot from Alan Wake II (2023), Remedy Entertainment

The last time the company revealed sales data for the game was in their Business Review for January to March 2024 when it shared, “In February 2024, Remedy announced that Alan Wake 2 had sold 1.3 million units as of the beginning of February. Alan Wake 2 sales have continued with a high average price. At the end of the first quarter, the game had recouped a significant part of the development and marketing expenses.”

The company had previously reported that the game had sold 1 million copies by the end of December 2023. The game was released on October 27, 2023 to PlayStation 5, Xbox Series X|S, and the Epic Games Store for PC.

A screenshot from Alan Wake 2 (2023), Remedy

It’s unlikely that Alan Wake 2 will generate any royalties for Remedy until the game’s publisher Epic Games recovers its investment into the game. Game World Observer reported that Alan Wake 2 ““was fully funded by Epic Games, and Remedy will be entitled to 50% of net revenue after the Epic fully recoups its investment.”

Finnish analyst Atte Riikola estimated that the game cost €70 million with €50 million going to development with the other €20 million going to marketing.

A screenshot from Alan Wake II (2023), Remedy

If this is true the game should have been near break even with 1.3 million units sold at the beginning of February given the game is retailing at $49.99. If all the 1.3 million units sold were bought at the base price not even including deluxe upgrades that comes to $65 million. That’s about $10 million short of €70 million based on currency exchange. That means it only needed to sell around 200,000 more units to break even.

Given the game has not recouped its costs yet and it has not generated any royalties it means that sales for the game completely dried up after January. That’s even more damning when you realize Remedy released physical editions of the game alongside its The Lake House expansion at the end of October, which leads one to believe that the expansion and physical copies did not drive any significant sales at all.

A screenshot from Alan Wake II (2023), Remedy

What do you make of Remedy Entertainment admitting that it has not generated any royalties and still has not broke even on Alan Wake 2?