A lot of myths in this thread. No, Europeans don't have 3 month breaks. For Sweden in general, full time employees are entitled to 25 paid vacation days. See for instance this article from Sweden's top trade union:
https://www.unionen.se/in-english/annual-vacation
Browsing through some of Paradox's job listings, it looks like they have a company policy of 30 days a year. Being a software company, they are probably pretty flexible in when that vacation can be taken, but most people will likely take the majority during the summer.
Additionally, the 25th and 26th of December plus the 1st, 5th (half a day) and 6th are national holidays.
The thing is, employees can choose when to take their vacation if they can reach an agreement with their supervisor. So some people might choose to take a week before Christmas Day, others might do a week after, etc. It's quite common to combine vacation days with national holidays to get a continuous vacation. It likely takes a few weeks before the team is back at full capacity, but it's not like there's a massive month-long holiday around Christmas.