Things aren’t looking good for Square Enix. Following the bombshell reports earlier this week that the Japanese publisher was outsourcing a suite of over 50 IP to Embracer Group, it was revealed that it would be keeping three of its non-Japanese IPs for the foreseeable future; Just Cause, Life Is Strange and Outriders.
While we don’t have detailed breakdowns on how the first two IPs on this list fared for the publisher, it’s safe to say that they’re fairly popular as legacy brands; Life is Strange has carved a niche for itself since the first game launched in 2015, and Just Cause has always found a place in gaming communities since its first game in 2006.
Outriders, however, is a different story. We heard last year that developer People Can Fly wasn’t receiving royalties from Outriders and that there were some issues with the game’s profitability.
Today, a new financial report from People Can Fly confirmed that the game didn’t turn a profit in 2021 – its launch year. Despite launching in April, the documents indicate that Square Enix is yet to generate revenue in excess of the title’s development, marketing and distribution costs.
The document states that to date, People Can Fly has not received any royalties from Outriders sales because the game was not profitable enough for Square Enix to begin this part of the development agreement.
“The Group has not received any royalties from the publisher for the period ended December 31, 2021, meaning that the net proceeds from the sale of Outriders as of the reporting date were insufficient to cover the costs and expenses incurred by the publisher for the development, The title came from sales and advertising.”
Worse still, People Can Fly expects sales to remain so low that Square Enix will never reach a threshold where royalties will be required.
There can be no guarantee that the net proceeds from the sale of Outriders will be sufficient in future periods to allow the publisher to meet its expenses and pay royalties to the group.
Given that we’ve recently heard reports that Square Enix lost about $200 million on the Marvel’s Avengers and Guardians of the Galaxy games, it’s interesting to read this financial report… and to consider that Square Enix retains Outriders intellectual property. It just might be that Square can’t sell the IP right now because the publisher is still contractually tied to People Can Fly – whether the company will try another game in the series or pursue further DLC plans remains to be seen.
It’s going to be an interesting future for Square Enix. We’ve already explored why the company would sell Tomb Raider, a series with 88 million lifetime sales, so cheaply. And we’ve been thinking about what Legacy of Kain and Gex might look like under new ownership (owned by a company that might even – shock horror! – acknowledge its existence).
Outriders was released on April 1st for PC, PS4, PS5, Stadia, Xbox One and Xbox Series X/S. The Worldslayer expansion—with a new campaign, new subclasses, and a new endgame—launches on June 30th.
https://www.vg247.com/outriders-no-profit-2021-square-enix Outriders, one of Square Enix’s last remaining western IPs, hasn’t turned a profit in 2021