Square Enix lost a huge amount of money on Marvel’s Avengers

Years in development at some of Square Enix’s biggest Western studios, Marvel’s Avengers has been a huge flop for the company. In an earnings call, president and CEO Yosuke Matsuda admitted that Square Enix had to write down 11 billion yen in losses associated with Marvel’s Avengers, both in terms of development and marketing.

That’s around $105 million or £80 million.

It’s fair to say that’s a pretty huge blow to the company’s finances. In fact, Matsuda-san goes on to say in the Q&A portion of the call that their sub-segment of ‘HD Games’ (which includes traditional console titles like Final Fantasy VII Remake) would have been profitable without Avengers’ flop.

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.

Marvel’s Avengers was originally planned for release back in May of this year, but was delayed back in January. When it eventually launched in September, it failed to set the critical or commercial worlds alight – here’s our Marvel’s Avengers review – no doubt leading to a little soul searching within the company.

Personally, I think a part of the reason is simply a lack of understanding over what Marvel’s Avengers actually is, and a little confusion when you get into the game in how it’s all put together. The game was revealed with the bombastic ‘A-Day’ events that set the game’s story in motion, but this whole sequence is purely a tutorial for the game’s basic controls. We were left asking what kind of game it wanted to be for almost a year after the E3 2019 gameplay reveal.

Not only that, but it focusses so heavily on the core Avengers characters , when the lead character through much of the story is actually Kamala Khan, AKA Ms. Marvel. While a Games as a Service title with many narrative drops, a lot of the game is focused around solo play as opposed to co-op multiplayer like Destiny and The Division. Oh, and then there was the fuss caused by Spider-Man being made a PlayStation exclusive character.

While the original delay to September cannot be attributed to the challenges of 2020, the subsequent delays can be. The first narrative episode featuring Hawkeye protege Kate Bishop was pushed back and will now launch in early December, and you have the delay of the PlayStation 5 and Xbox Series X|S enhanced versions of the game to 2021.

It is still a fun action brawler, there is a solid comic book story that it tells, and there’s definitely been a lot of thought put into making sure there’s regular content coming to the game, but it just never managed to capture the imagination of punters. The hope for Square Enix is that, as with Destiny and The Division, the game can turn a corner and get more people to invest in its ongoing story and gameplay.

Source: Square Enix via Twisted Voxel

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  1. For me personally, the games as a service model just ruined any interest I would have had in this game… If it was a self-contained single-player experience like Spider-Man on PS4, I would have probably bought it. As it is, I just don’t care…

    • IMO I thought the single player was brilliant. What declined my attention was the repetitive post SP missions and the grind. I gave it a decent amount of time but just couldn’t continue as it became boring rather quickly. Im not an online player so didn’t delve into this but its probably more of the same. The lack of post launch content also had an Impact on this game.
      Hopefully they can salvage it with new content but if sales have been that poor and minimal people playing it I would be surprised if they pulled the plug.

      • If the SP is brilliant, that’s fine, and maybe I will even get it for that at a discount… However, I would never shake the feeling that I only use a small part of what I bought… That’s like buying a Call of Duty only for the story… Maybe some do that, but it’s not for me. At least not until heavily discounted…

  2. I also was uninterested upon learning it was a live service game. No thanks. I wouldn’t be surprised if many live services lose money because, unless you are as popular as Destiny or Fortnite, you just can’t make back the huge development costs.

    • Well, not many franchises are as popular as the avengers, or more precisely the MCU, so I get why they thought it could work. The problem I see with most of those games as a service is that most people interested in that system are probably already invested in one or two other games and as an average person there just isn’t enough time for more than that if you have to log in daily and do a few missions, especially if you also have to coordinate and maintain a crew – if you find one that plays all your games with you, if not you have to coordinate multiple crews, and then at the latest, it turns into work…

      • I agree, I do wish now I had waited for a sale. I normally wouldn’t go for live services games but because it was an Avengers game is the reason I brought it.

  3. I bought it during Black Friday for £25, which is easily worth it for the single player story which I have been really enjoying.

  4. The promotion was terrible, one ten minute section of gameplay but that was it, SE just didn’t explain the game properly and relied on the name to do the work.

  5. I’m a long time comics fan, and the thing for me was how Square Enix has interpreted the Avengers – the minute I tried the beta and saw little numbers pop up above a robot’s head when smashing them as the Hulk, I knew it wasn’t for me.

    I think superhero games are at their best when they empower the players (like Batman Arkham or Spider-Man) – by trying to be Destiny or Diablo the game suddenly removes all of that power from the characters and undermines the premise, for me at least.

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