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I got my hands on the annual report of Iron Gate, the Swedish development studio behind Valheim, the viking survival game that set Steam on fire last February, and sold 6.8 million units as of 31st March 2021, according to publisher Coffee Stain's parent company Embracer Group (source, slide 3).
Valheim is Iron Gate's first game since its establishment. At the start of Iron Gate's financial year, on 1st April 2020, the company had 3 employees. A year later, as of 31st March 2021, the company has grown to 4 employees.
The way revenue recognition works is as follows: someone buys the game at a store, for example Steam. Steam takes its share and then sends the rest to the publisher. The publisher then recognises all the money they receive as income, and pays the external developer a certain amount as agreed upon in their contract, based on milestones and whatnot. This transaction -- the publisher paying the development studio -- is considered an expense for the publisher and is considered revenue for the development studio. The numbers you'll see below are Iron Gate's revenue numbers. In other words: the money that the studio has received from Coffee Stain as their reward/compensation as a result of Valheim's success. It is not the total amount of money that players have spent on Valheim up to 31st March.
Total income: SEK 466 516 395 (~$54.2m)
Operating expenses: SEK 2 695 391
Total operating result: SEK 463 821 004 (~$53.9m)
Profit before tax: SEK 463 821 004 (~$53.9m)
Tax: SEK 99 164 242
Profit after tax: SEK 364 656 762 (~$42.4m)
Income grew 455 times YoY.
Tax expenses were almost ten times larger than last year's income
Valheim is Iron Gate's first game since its establishment. At the start of Iron Gate's financial year, on 1st April 2020, the company had 3 employees. A year later, as of 31st March 2021, the company has grown to 4 employees.
The way revenue recognition works is as follows: someone buys the game at a store, for example Steam. Steam takes its share and then sends the rest to the publisher. The publisher then recognises all the money they receive as income, and pays the external developer a certain amount as agreed upon in their contract, based on milestones and whatnot. This transaction -- the publisher paying the development studio -- is considered an expense for the publisher and is considered revenue for the development studio. The numbers you'll see below are Iron Gate's revenue numbers. In other words: the money that the studio has received from Coffee Stain as their reward/compensation as a result of Valheim's success. It is not the total amount of money that players have spent on Valheim up to 31st March.
Total income: SEK 466 516 395 (~$54.2m)
Operating expenses: SEK 2 695 391
Total operating result: SEK 463 821 004 (~$53.9m)
Profit before tax: SEK 463 821 004 (~$53.9m)
Tax: SEK 99 164 242
Profit after tax: SEK 364 656 762 (~$42.4m)
Income grew 455 times YoY.
Tax expenses were almost ten times larger than last year's income
