Things don’t look good for Square Enix. Following the blockbuster news earlier this week that the Japanese publisher is transferring a suite of 50+ IPs to Embracer Group, it was revealed that it will keep three of its non-Japanese IPs for the foreseeable time; Just Cause , Life is Strange and The Pioneers.
While we don’t have a detailed look at how the first two IPs on this list have fared against publishers, it’s safe to say – as legacy brands – that they’ve been very popular; has carved out a niche for itself, and Just Cause has had a place in the gaming community since its first game in 2006.
Outriders are another story, though. Last year we heard that developer People Can Fly was not receiving royalties from Outriders and that there were some issues with the game’s profitability.
Today, a new financial report from People Can Fly confirms that the game will not be profitable in 2021, the year of its release. Despite launching in April, the filing states that Square Enix’s revenue has yet to exceed the game’s development, marketing and distribution costs.
The filing states that, as of now, People Can Fly has not received royalties from the sale of Outriders because the game is not profitable enough for Square Enix to begin developing this part of the deal.
“As of December 31, 2021, the group received no royalties from the publisher, which means that the net proceeds from the sale of Outriders as at the reporting date were not sufficient to recover the costs and costs incurred by the publisher for development, distribution and promotion. Fee Title.”
To make matters worse, People Can Fly seems to expect sales to remain low enough that Square Enix will never reach the threshold for paying royalties.
There can be no assurance that the net proceeds from the sale of Outriders in future periods will be sufficient for the publisher to recover the costs incurred and pay royalties to the group.
Given that we recently heard that Square Enix lost around $200 million on Marvel’s Avengers and Guardians of the Galaxy games, it’s interesting to read this financial report…and considering that Square Enix lost Sri Lanka retains the Outriders IP. Possibly just because the publisher still has a contract with People Can Fly, Square is currently unable to sell on the IP – it remains to be seen whether the company will try another game in the series, or pursue further DLC plans.
It’s going to be an interesting future for Square Enix. We’ve already looked at why the company sold Tomb Raider, a franchise with 88 million total sales, for such a cheap price. We’ve thought about what Kain and Gex’s legacy might look like under new ownership (owned by a company, maybe even – shocking horror! – acknowledging their existence).
Outriders released April 1 for PC, PS4, PS5, Stadia, Xbox One and Xbox Series X/S. Its Worldslayer expansion pack – with a new campaign, new subclasses and new endgames – will launch on June 30th.