After significant combined losses of $200 million on Marvel's Avengers and Guardians of the Galaxy, Square Enix also suffered losses on its new multiplayer shooter Outriders.Outriders was not profitable during 2021, a new People Can Fly financial report confirms.The game was released in April 2021, and even though it's been on sale for a year, it appears Square Enix still hasn't generated revenue from it beyond its development, marketing and distribution budget.While Square Enix has yet to make an official statement - and likely won't do so after its upcoming full year 2021 results report on May 13 - the losses are evident from the latest People Can Fly documents.Square Enix has previously said that Outriders exceeded their expectations in many metrics, including digital sales and the number of active users, but developers complained back in August 2021 that they didn't receive any royalties from sales.The news comes after Square Enix put its western video game development divisions Crystal Dynamics, Eidos Montreal and Square Enix Montreal up for sale along with a metric ton of \"underperforming\" IPs including Tomb Raider, Deus Ex, Legacy of Kain and Thief.Square Enix sold those assets to Embracer Group for $300 million.Outriders was one of the few IPs that Square Enix didn't sell.Here's what People Can Fly said about the Outriders situation:Since the game's development and release (which occurred April 1, 2021), the company is entitled to royalties, payable if specific proceeds (as defined in the agreement) from its sales ensure the publisher is compensated for a predetermined level of costs incurred in developing, promoting and distributing the game.The amount of the royalty depends on the amount of the specific proceeds from the game's sales.The studio did not receive royalties from the publisher for the period through December 31, 2021, which means that as of the reporting date, the net proceeds from the sale of Outriders were insufficient to reimburse the costs and expenses incurred by the publisher in developing, distributing and promoting the game.This was confirmed by the royalty statement for the fourth quarter of 2021 that the Group received from the publisher.People Can Fly also says that there is no guarantee that Outriders will ever become profitable.There is no guarantee that the net proceeds from Outriders sales in future periods will be sufficient to allow the publisher to recover the costs incurred and pay royalties to the Group.It is also worth noting that Square Enix holds all IP rights and publishing rights to the Outriders brand.This means that People Can Fly may not make any money on the commercial release of Outriders as of 2021.Under the development and publishing agreement, the company has assigned its existing and future intellectual property rights (copyrights) to Outriders, as well as any DLC, sequels and additional products related to the game, to the publisher.The company has also waived its moral rights in favor of the publisher.People Can Fly also states that it may refuse to create new DLC and expansions for Outriders, and if that happens, Square Enix may choose another developer to create new content.
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