Even as Square Enix and People Can Fly gear up for the release of Outriders Worldslayer in June, a huge new expansion to the online co-op shooter, the developer isn’t sure if the game will ever be profitable enough to provide them with any royalties from its release.
In a financial report, as picked up on by TweakTown, the studio stated yet again that they have yet to receive royalties from the game, the frame of reference this time being through to the end of 2021. It’s the same story as we heard back in August of last year, but now stretched out across the game’s first nine months on sale.
People Can Fly said in its latest financial report:
The Group received no royalties from the publisher for the period to December 31st 2021, which means that as at the reporting date net proceeds from the sale of Outriders were insufficient to recover the costs and expenses incurred by the publisher to develop, distribute and promote the title.
This was confirmed by the royalty statement for the fourth quarter of 2021, received by the Group from the publisher.
There can be no assurance that net proceeds from the sale of Outriders in future periods will be sufficient for the publisher to recover the costs incurred and to pay royalties to the Group.
The partnership that People Can Fly signed with Square Enix entitles them to royalties after Outriders has made back all of the costs incurred through the game’s development and marketing, but despite Square Enix stating that it performed well, accruing some 3.5 million unique players in its first month of release, and now having been backed with a new expansion, the company hasn’t had any bonus royalties coming through to them. Of course, not all of the game’s players will have directly mapped to sales, as it launched into the subscription service Xbox Game Pass, but that would have given Square Enix a lump sum to offset some of the costs. An additional factor is that the game also struggled with severe server issues during that time, and they took a month to restore accidentally deleted items back to player inventories, potentially dampening sales further.
People Can Fly will be hoping that the upcoming Outriders Worldslayer expansion will help to make the game more profitable, so that they have a return to show to their investors, though presumably it’s also increasing the size of the revenue mountain that the game has to climb to pass that threshold through funding development and going on a fresh marketing push.
Of course, this news comes to the backdrop of Square Enix deciding to sell off their western development studios, offloading Crystal Dynamics, Eidos Montreal and Square Enix Montreal to Embracer Group with a swather of big IP that include Tomb Raider, Deus Ex and countless back catalogue game. All of that for the relatively small sum of $300 million, which Square Enix has said will help them invest in such wonderful things as blockchain and AI.
It’s not the unexpected that Square Enix is happy to keep its External Studios arm running, though, and they’ve kept a hold of IP like Just Cause, Outriders and Life Is Strange, where they can continue to produce games, but without owning the studios they’re working with.
Source: People Can Fly via TweakTown
