People Can Fly have told investors they have not received their first royalties for Outriders; suggesting it has not turned a profit over four months after launch.
We previously reported the game saw over 3.5 million unique players in its launch month, and Square Enix announcing the game was “on track to become the company’s next major franchise.” However, financial reports from developer People Can Fly show they have yet to receive royalties.
GamesIndustry.biz reports that in both notes to investors and financial filings (translation: Google Translate) the royalties are only to be paid once the costs that had been covered by Square Enix had been recouped, then paid to People Can Fly within 45 days of the end of the quarter it launched in. The game launched April 1st, 2021- leaving August 16th as the latest date that could have been paid.
People Can Fly Management Board President Sebastian Wojciechowski estimated that Outriders had sold in the region of two million to three million copies, and that the studio had assumed this would be profitable. As the developer stated to investors, the lack of royalties “probably means that, according to Square Enix, the game Outriders did not break even after the first quarter of sales.”
Wojciechowski proposes the issue may be due to the costs associated with distribution platforms, “entities offering Outriders as an addition to their platform,” and Square Enix expenditures that the developer was unaware of. Initial speculating aside, Wojciechowski stated he would speculate no more, and that the studio would find out what occurred, and assured investors they would receive the first royalties this year.
GamesIndustry.biz theorizes that the game’s launch on Xbox Game Pass may have resulted in higher player numbers; which Square Enix had stated were above expectations. In an interview with The Verge in 2020, head of Xbox Phil Spencer suggested that the revenue breakdown for Xbox Game Pass was a case-by-case basis, catering to the publisher or developers desires.
The situation can’t help but be compared to Marvel’s Avengers; another western developed Square Enix game that was met with a lukewarm reaction from players, and reportedly failed to live up to sales expectations.
Square Enix made a reported $61.23 million USD loss in their FY2021Q2 from HD games; with the only notable game in that period being Marvel’s Avengers (launched September 4th, 2020). Final Fantasy VII Remake had launched April 10th that year; four months prior.
At the time David Gibson, co-founder of Astris Advisory Japan KK, tweeted that Square made a ¥6.5 billion JPY loss on HD games that quarter; “driven” by Marvel’s Avengers. He also proposed the game sold 60% of estimated sales goals, and had development costs of $170 million USD to $190 million USD.
Square Enix president Yosuke Matsude later stated Marvel’s Avengers did not recoup its development costs in the two months since launch, during the Financial Results briefing for FY2021Q2.
Our review of Outriders noted at the time it was “still plagued with just too many issues to recommend.” Aside from the poorly functioning multiplayer, bugs, and glitches; the endgame was disappointing, and “every live service problem imaginable is present and accounted for aside from microtransactions and battle passes.”
Outriders is available on Windows PC (via the Epic Games Store, and Steam), PlayStation 4, PlayStation 5, Xbox One, Xbox Series X|S, and Google Stadia. A playable demo is available. In case you missed it, you can find our review here.