Outriders developer People Can Fly has indicated the title didn't break even during the first quarter of the fiscal year, despite attracting 3.5 million players in the space of a month.
The third-person online shooter launched on April 1, 2021, on a variety of platform including Xbox Game Pass, but seemingly struggled to turn a profit for publisher Square Enix. That means People Can Fly still hasn't retrieved any royalties from the Japanese company.
In a note to investors (via Google Translate), the studio explained its publishing agreement with Square would have seen the company pay any outstanding royalties from first quarter sales 45 days from the end of the calendar quarter -- meaning it would have received its first payment by August 16, 2021, at the very latest.
"Today, however, the money has not been transferred to the company's account," said the studio "This probably means that, according to Square Enix, the game Outriders did not break even after the first quarter of sales -- i.e. according to the publisher, the revenues from sales of the game are lower than the total costs of its production (including QA), distribution, and promotion."
People Can Fly added that it will begin receiving royalties from Outriders "only after all game costs are covered by the publisher."
It also explained that it doesn't currently have any concrete sales figures for Outriders, but estimates the title has sold between two and three million units. People Can Fly president and CEO Sebastian Wojciechowski said the company assumed that reaching such a milestone would "ensure profitability" for the project during the first quarter. According to Square Enix, however, that isn't the case.
“Perhaps [the lack of royalties] was caused by some elements of Square Enix's sales policy, the details of which we do not know, such as partnerships concluded by the publisher with distribution platforms or entities offering Outriders as an addition to their products," added Wojciechowski.
"Failure to achieve the level of profitability may also mean that the costs incurred by the publisher are higher than expected. But I don't want to speculate; we will analyze the situation further. It is worth noting, however, that such explanations take time and our influence on the publisher's position is limited."
Wojciechowski conceded the lack of royalties at this stage is "disappointing," but reassured investors that People Can Fly will continue supporting and promoting Outriders. The studio president also expects to receive the first batch of royalties from Square Enix before the end of the year.