Marvel’s Avengers still needs to recoup development costs

Marvel’s Avengers game has yet to earn back its development costs. 

The latest news comes from a Square Enix financial results Q&A, where president Yosuke Matsuda discussed the operating loss of the game since its global launch in April, up until September. 

“The HD Games sub-segment posted an operating loss as initial sales of “Marvel’s Avengers” were lower than we had expected and unable to completely offset the amortization of the game’s development costs. In the second half of the fiscal year (“2H”), we hope to make up for slow initial sales by offering ample additional content to grow our sales,” Matsuda said. 

We reported recently that Square Enix posted a loss of $48 million following the release of Marvel’s Avengers. The game reportedly cost close to $170m - $190m to make, and according to the new financial results, the HD Game sub-segment booked an estimated operating loss of around 7 billion Yen ($67 million) in the second quarter of 2020. 

Matsuda also responded to a question about there being any factors contributing to the massive loss, he said, “In addition to the amortization of that game’s development costs, another significant factor associated with the title was the fact that we undertook a major advertising campaign at the time of its launch to make up for delays in our marketing efforts resulting from the COVID-19 pandemic. There is a certain amount of development costs still to be amortized in 3Q, but we want to recoup it by growing our sales going forward.” 

There was also talk about expanding sales to improve profitability, as well as using new IP to grow Square Enix’s customer base, with Matsuda touching on how new IP is essential to the growth of the publisher.

Crystal Dynamics recently confirmed that Marvel’s Avengers will not be coming to PS5, Xbox Series X, and Xbox Series S until 2021.

For more, check out our Marvel’s Avengers DLC guide to see who will be joining the roster in the future.