Earlier this month in Japan, Square Enix held a briefing for investors. This week, the Tokyo-based game company finally released an official transcript of the meeting.
During the presentation, Square Enix president Yosuke Matsuda said, “The HD Games subsegment 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.”
Marvel’s Avengers was heavily promoted as a AAA release that was connected to the most popular superhero team in the world. Not only was Marvel’s Avengers meant to be a fully realized single/multiplayer title at launch, but it was going to receive regular content updates over time, in order to keep players interested long after the initial purchase. The truth has been a little more complicated, and it feels as if Marvel’s Avengers is on its last legs. The mixed reaction to the game at launch, followed by delays of its initial wave of content has raised concerns about its future.
According to Dave Gibson of Astris Advisory Japan KK on Twitter, Marvel’s Avengers performed way below Square Enix’s expectations. Marvel’s Avengers sold 60% of what was expected and the company implied that the game failed to make a profit based on its production/marketing costs.
Square Enix – reported Yen6.5bn loss for HD Games driven by Marvel Avengers, would not say how many sold but that volumes were 60% of plan. Implies game cost over $100m to make but only sold 3m or so. Ouch
— David Gibson (@gibbogame) November 6, 2020
According to Kotaku Matsuda shared, “Absent factors associated with Marvel’s Avengers the subsegment would have been in the black. In addition to the amortisation 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.Our intention is first and foremost to work to expand sales in order to improve its profitability.We engaged in ample preparations ahead of the launch, but it is true that there were aspects in which we were wanting. We intend to leverage the lessons we learned from this experience in future game development efforts.”
There is still a light at the end of the tunnel for Marvel’s Avengers, as the next-gen ports are arriving next year. By the time these versions launch, the game should hopefully have more characters and missions available
Such massive losses cut another dent into the profitability of the Avengers saga after Disney decided to remove all Marvel online slots (including the Avengers slot) from all licensed online slot sites. The ban became effective in March 2017, as a result of Disney’s anti-gambling stance.