Square Enix has revealed that their recent live service title Marvel’s Avengers has failed to meet their sales targets.
The news comes from a translated version of Square Enix’s recent fiscal briefing, in which Square Enix president and representative director Yosuke Matsuda addressed the game’s disappointing sales.
“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” said Matsuda. “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.”
It is estimated that Square Enix’s HD Games sub-segment booked an operating loss of around ¥7 billion in Q2. An investor questioned whether other factors would have added to this loss, but Mastusda countered that the sub-segment would have been in the black were it not for Marvel’s Avengers. Additionally, he points to the game’s advertising campaign as being particularly expensive.
“Absent factors associated with “Marvel’s Avengers,” the sub-segment would have been in the black. 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.”
When asked about expectations for the game’s profitability in the next quarter, Matsuda replied simply that Square Enix’s “intention is first and foremost to work to expand sales in order to improve its profitability.”