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Square Enix has not recovered development cost from Marvel’s Avengers sales yet

It is no secret that Marvel's Avengers has struggled since launch and while many assumed that the Marvel license would carry the game to breaking even, that might not end up being the case. Recently, Square Enix confirmed to investors that it has not yet recouped the initial development cost of the game, leading to a bigger than expected loss on the publisher's quarterly earnings report.

We already knew that Square Enix's HD Games Division posted a $48 million loss last quarter. Expanding on that though, Square Enix president, Yosuke Matsuda explained that Marvel's Avengers has not broke even yet.

The translated investor Q&A session is now live on the Square Enix website. In one question, Matsuda is asked whether Marvel's Avengers has “covered the amortization of its development costs”, to which Square Enix's president replied:

“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”.

The good news here is that it looks like Marvel's Avengers will recoup its development cost before the end of the year. Additional sales should come via holiday period sales and revamped interest thanks to new DLC. Marvel's Avengers' first DLC character expansion is arriving on the 8th of December. In 2021, the game will also receive an update to take advantage of Xbox Series X/S and PS5 hardware.

KitGuru Says: I had high hopes for Marvel's Avengers. Hopefully the many planned character expansions can nudge the game in the right direction. 

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