Square Enix has explained that sales of Marvel's Avengers were lower than expected, and that the advertising push for the title also proved costly.
Commenting on the game's performance in a translated version of Square's recent fiscal briefing, company president and representative director Yosuke Matsuda said its HD sub-segment posted a loss because Marvel's Avengers failed to meet internal sales targets.
"Sales of [the game] were lower than we had expected and unable to completely offset the amortization of the game’s development costs," they commented. "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."
Adding more context during an investor Q&A, Matsuda said the HD sub-segment would have been in the black had the company discounted "factors associated with Marvel's Avengers," indicating the game took a significant toll on the division.
"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," continued Matsuda.
"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."
When asked what the profitability of the game could look like in the next quarter, Matsuda seemed to skirt the question by explaining Square is solely focused on adding more sales. With that in mind, it'll be interesting to see how the high-profile title is shaping up when the company releases its next set of financials.