Square Enix Posts $63 Million Loss in HD Games

| Nov 6, 2020
Square Enix Posts $63 Million Loss in HD Games
Square Enix has lost $63 million in the last quarter’s HD Games earnings, primarily from the launch of Marvel’s Avengers.

The Crystal Dynamics-developed looter-shooter had a lackluster launch in September, fueled by early bugs, franchise expectations, and live service mechanics. Now Japan-based analyst David Gibson reports that Square Enix likely spent over $100 million producing the game but only sold 3 million units, despite topping NPD’s charts for physical game sales in September.

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The financial report saw an increase in the HD Games’s division’s sales year-over-year, but the division’s operating income dove into negative figures and hit a 6.5 billion yen (or $62.9 million USD) low in the last quarter.

Other games driving this category included Final Fantasy VII Remake and Square Enix’s extensive back catalog on digital marketplaces. While this particular division took a hit at the end of the summer, the MMO and Smartphone markets posted considerable profits thanks to increasing subscriber numbers for Final Fantasy XIV and the performance of its many mobile titles, like Dragon Quest Walk.

Marvel’s Avengers has further suffered due to delays in its planned DLC schedule and next-gen upgrades. Two Hawkeye characters, Kate Bishop and Clint Barton, were meant to be added this fall but were shifted back by a month, while the next-gen version slipped into 2021 so Crystal Dynamics can correct issues with the PlayStation 5 and Xbox Series X|S editions. Whether the launch of the PlayStation-exclusive Spider-Man can help the game (and publisher) recover, remains to be seen early next year.

In the meantime, Crystal Dynamics has permanently lowered the cost of certain in-game cosmetic items and offered considerable gifts to existing players to encourage the fan base to keep playing between content rollouts.

(Read CGM’s review of Marvel’s Avengers, which Cole Watson called “a solid-foundation for Crystal Dynamics to build upon and develop into a fantastic live-service title,” here.)

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