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Huge marketing spend partly to blame for Marvel's Avengers not meeting Square Enix expectations

Huge marketing spend partly to blame for Marvel's Avengers not meeting Square Enix expectations

Japanese publishing giant Square Enix has confirmed that the recently-released Marvel's Avengers didn't live up to expectations.

The firm has published the English translation of its investor meeting for the six months ending September 30th, in which president Yosuke Matsuda said that the ¥6.5bn ($62.7m) loss in operating income for the period was driven by this title.

Marvel's Avengers launched in September but initial sales weren't up to the level Square Enix anticipated.

"The HD Games sub-segment posted an operating loss as initial sales of Marvel’s Avengers were lower than we had expected and unable to completely offset the amortisation of the game’s development costs," Matsuda said.

"In the second half of the fiscal year, we hope to make up for slow initial sales by offering ample additional content to grow our sales."

Asked by an investor whether Square's HD games business would have been profitable if Marvel's Avengers had covered its development costs, Matsuda said that the loss is greater than just the cost of making the game. Square Enix put a lot of money behind a marketing campaign to push the game ahead of release as it wasn't able to promote the title for much of the year thanks to the COVID-19 coronavirus pandemic.

"Absent factors associated with Marvel’s Avengers, the sub-segment would have been in the black," Matsuda explained.

"In addition to the amortisation 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 amortised in 3Q, but we want to recoup it by growing our sales going forward."

Since release, Marvel's Avengers has seen a declining playerbase, too. Developer Crystal Dynamics said in October that it was "confident" that users would return to the title as the studio updated the game with new content.


PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site PCGamesInsider.biz. In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for GamesIndustry.biz, VGC, Games London, The Observer/Guardian and Esquire UK.

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