In the last few years, Paradox Interactive's massively successful strategy portfolio of games like Victoria 3, Stellaris, and Crusader Kings III has been praised for its critical and commercial success made possible by veteran developers. Now, a return-to-office policy is threatening to drive employees away from the company.After the COVID-19 pandemic lockdowns of 2020-2021, video game developers began adapting to the needs of a workforce that had spent a year learning how to make games in a remote environment. Some, like Swedish company Paradox Interactive, implemented "hybrid" schedules that offered developers flexibility in exchange for spending up to 3 days a week in the studio.Many developers at Paradox found this framework ideal. It allowed them to balance the costs of childcare and commuting while still seeing peers in-person for necessary work. But in late 2024, Paradox leadership informed employees they would wind down the hybrid work schedule, mandating they be in the office four days a week starting in February 2025, and a full five days a week by September 2025.To get a sense of the overall reception following the policy’s rollout earlier this year, Game Developer spoke with five current and former developers from Paradox Interactive, who all requested anonymity for fear of retaliation. Those conversations, which took place over the last several months, suggest that the policy has proven to be unpopular within the company and has endured a "chaotic" rollout.Related:Deputy CEO Mattias Lilja confirmed the RTO plans in a response to a request for comment from Game Developer. He said the goal of the policy is to establish that working from the office "is now the expected default" and not "a matter of preference." Employees are expected to follow the in-office requirement "as a general rule," but flexibility will be offered to some workers due to "individual circumstances." Employees hired remotely from beyond Stockholm will not be required to move close to the office.Lilja stated that Paradox is prepared to alter the arrangement if Paradox sees "a clearly negative impact."Sources told Game Developer that "negative impact" is already here. According to a survey conducted by the worker's unions Unionen and SACO conducted after the call, over 50 percent of employees said they're considering looking for other jobs. And the sources we spoke with expressed say the talent-bleeding has already begun.Paradox leadership initially said there was no RTO policy in the worksRelated:Rumors of a return-to-office policy began circulating Paradox in November 2024.As these rumors churned, representatives from worker's unions Unionen and SACO asked management if any return-to-office policy was being planned. According to info shared by those unions with Paradox employees via an open Slack channel, company management reportedly denied a return-to-office policy was in the works.All that changed in December, when Paradox leadership internally announced that staff would be required to spend four days a week in the office starting in February 2025. Only then did the company enter consultation with the unions and the employee safety representatives required under its collective bargaining agreement and Swedish law.After the internal announcement, Paradox convened a town hall to address questions from Paradox staff, including those physically in the room and those who were attending the meeting remotely. In a recording of the call reviewed by Game Developer, he told employees that the decision "is not a vote," and that "we as a company need to find ways to work more productively."Remote viewers in the call used emojis to signal their views on the policy, submitting positive "thumbs up" reactions in response to questions criticizing it, and "angry" reactions when Lilja defended the policy.Related:During the Q&A, employees challenged the policy, pressuring leadership to explain its motivation for the decision. One employee in the call asked Lilja referenced multiple research studies that show hybrid working can have a positive impact on productivity. Lilja deflected the question, saying what worked for other companies doesn't automatically work for Paradox.Lilja and Paradox vice president of culture and engagement Paula Thelin attempted to solicit questions on other topics, but employees continued submitting questions challenging the RTO policy. The company offered to host a second town hall to further discuss the end of hybrid working. That second town hall never took place."We quickly realized there would be a high volume of questions around specific cases and personal circumstances," Lilja said in response to our query about the canceled second town hall. "Despite our original intention of having a second meeting with the full company, we elected to answer the broadest questions and share further information through managers instead. This follow-up has already been completed as of early this year."54 percent of surveyed Paradox employees said they are considering leaving the companyParadox leadership seemed just as unconvinced by data on hybrid working from inside the company as it was from outside researchers. Unionen and SACO submitted a presentation of their survey results to the company (which gathered about 300 responses across multiple sub-studios), but this didn't seem to change the mind of management.Game Developer obtained a copy of this presentation, which showed that a combined 54 percent of responding employees reported a return-to-office policy would make them consider leaving the company.34 percent of respondents said the policy would "likely" make them look for a new job, and 20 percent of responding employees stated they are "actively" looking for a new job. About 38 percent of respondents said the policy did not impact their commitment to the company, and only 2.5 percent said it "increased" their commitment to Paradox (the slides did not indicate what response the remaining 5.5 percent selected).But for all the statistics the union provided, sources said the company offered little hard data in return, instead referring back to profits margins not just for the overall company, but for individual games and downloadable expansions. In the town hall, Lilja said there was not a "simple checklist" of variables the company was using to measure productivity, but did state that the cost/product curve of the company was a key metric.Speaking to Game Developer, Lilja downplayed the emphasis on "productivity," first saying that "Direct interaction with one’s team leads to the best collaboration, which is absolutely essential to creating the complex, systems-driven games that Paradox is known for."When asked if employees were specifically told that the policy was meant to improve productivity at the studio, Lilja said he "believes" that message was "communicated to employees." "Working in the office is intended to promote collaboration, which will in turn lead to more productivity, and downstream from that we will continue to see a sustainable and profitable company."He said the company is not changing the policy due to any recent downturns or short-term profit results, saying claims that the policy is being implemented due concerns over profit margins "seem reductive."Image via Paradox Interactive.The company was terse in its exchanges with the unions. According to a memo obtained by Game Developer containing the minutes of a required consultation meeting with Unionen and SACO, the unions presented the survey results as well as concerns from the safety representative about the physical work environment at Paradox headquarters. These concerns covered topics like ventilation, fire safety, temperature control, and noise level in the office.The groups also expressed concern that the safety assessment only began after the policy was announced, potentially indicating risks from the assessment weren't taken into account in the decision to implement an RTO policy. They ultimately recommended that Paradox reverse this policy and return to the 3-day hybrid policy that had been the norm since the COVID-19 pandemic.The company's official point of view, as expressed in the memo, boiled down to one sentence: "The company aims to implement this change to enhance team collaboration and culture, ultimately increasing overall performance." Under Swedish law, Paradox is not required to implement any recommendations made by the union.Will RTO bolster Paradox’s 'collaboration', 'culture', and 'performance'?Lilja told Game Developer that feedback to the policy "has been mixed," but that the company still believes it will "lead to positive changes for Paradox in the long run." He added that Paradox is "moving forward with planning," and has used "vital feedback from employees, Unionen, and SACO to ensure the policy is flexible where needed."It's difficult to find evidence implying productivity at Paradox suffered due to the hybrid work policy. Paradox's public financial results don't draw a direct line between hybrid working and change in operating profit. During the 6-year period from 2018-2024, its year-end reports stated that annual operating profit spiked 34 percent in 2020 and 189 percent in 2022 (at the time CEO Fredrik Wester attributed the gain partly due to the "weakness" of the Swedish krona), and grew a modest 10 percent in 2024.Over the course of those 6 years, the company saw big wins with the release of games like Crusader Kings III, Victoria 3, but also the underperformance of Cities Skylines II, the write-down-grade losses on Harebrained Schemes' The Lamplighters League, and the development reset on Vampire The Masquerade II: Bloodlines. Then in 2023, Paradox laid off most of Harebrained Schemes before selling the company back to its founders and shut down Paradox Tectonic less than a month after delaying the game's June 4, 2024 Early Access launch. The company reported that the latter closure deeply harmed its operating profit in its June 2024 interim financial report.All the employees we spoke with expressed frustration over the emphasis on productivity. Direct costs did steadily increase during this time period—but the canceled projects, underperforming games, and studio closures had a greater impact on the company's profits. Each year it saw declines in profits was accompanied either by public backlash to the quality of its releases (like Cities Skylines 2) or a studio closure. These events represent massive amounts of revenue the company had projected not being realized.With such dramatic events impacting Paradox's balance sheet, it's easy to see why employees might feel like individual productivity boosts won't do much to move the needle. "What incentive do we actually have to be more performant now?," one current employee said to Game Developer. "If we were to be more performant, that would only prove this naive and unfounded theory right.""If we're less performant...best case [we] would prove this theory wrong and in worst case might lose our job, in this economy. Great."Game developers grow frustrated with return-to-office mandates"We do things we think is best, we won't do otherwise," Lilja said during the back-and-forth with employees in the December 2024 town hall. "If you feel strongly against that, you need to look in the mirror and decide if this is the right place [for you]."These words echo those of other game industry employers like Activision Blizzard, Rockstar Games, and Ubisoft, which have also taken tough lines on mandating a return to in-person game development. But with companies laying off employees over the last three years at unprecedented rates, those who simply quit may struggle to find new employment.One source told Game Developer that departures may increase after the summer of 2025, when employees receive their profit-sharing payout and everyone comes back from their summer vacation.Meanwhile smaller studios like Bloober Team have continued to accommodate remote and hybrid work, demonstrating the viability of flexible employment even on years-long development projects.Multiple sources told us rumors are still swirling of key employees being offered exemptions to the return-to-office policy in order to prevent their departures. Liljas denied that this is taking place, saying "we don't view this in terms of 'key employees' so much as what lengths are required to fill certain positions." He added that this has "always been the case for Paradox."There's worry that if enough senior employees decide to leave anyway, the quality of Paradox releases could decline, impacting the productivity that Paradox leadership hoped to improve. Liljas said that it will take about 12-18 months to evaluate the effectiveness of the RTO policy. "It is easy to point to short term changes to one’s individual schedule as obviously negative, and I understand it requires a show of faith to trust that this will be seen as a positive change in the future—but steering Paradox in the long term is my job, and I want to earn our team’s trust to do just that."For now, the game development community can only watch as Paradox puts its theory to the test. If profit margins on upcoming games and expansions do increase—even if a number of key employees exit the company—than it bolsters the argument that forcing workers back into the office boosted productivity.But if its profit margins stagnate or decline and key senior employees and leaders decide to leave, Paradox—and the video game industry—may have to face the fact that forcing people into a building does not automatically improve the process of game development.