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A $200 Million Loss on Marvel Games for Square Enix?

According to some sources, it appears that Square Enix lost millions of dollars on Marvel’s Avengers and Guardians of the Galaxy productions.

Square Enix has been the subject of much speculation lately, primarily due to the fact that it has now sold off three major Western game development studios and their associated (and highly prized) intellectual property to the Embracer Group. The company has not even clarified the details of the situation, adding fuel to the controversy surrounding the deal.

However, Square Enix continues to receive new information, with MST Financial reporting that the publisher lost $200 million between the two Marvel releases. This paints a pretty clear picture of why Square Enix would sell Crystal Dynamics and Eidos Montreal, who worked on Marvel’s Avengers and Marvel’s Guardians of the Galaxy.

Indeed, while Guardians of the Galaxy was critically acclaimed, the less well-reviewed Avengers seems to have been panned by the general public. According to an analysis by MST Financial, the company lost hundreds of millions of dollars on the production and marketing of the games, which Square Enix seems to have found hard to swallow. It’s safe to say that Guardians is now building its audience through Game Pass, but it seems it was too little, too late to change the situation, as both properties were sold to Embracer Group.

Now that Embracer has acquired Square Enix’s western studios, the company can focus on projects that seem to make more sense for it, such as Forspoken and the Final Fantasy franchise. Although it’s also worth pointing out that Square will retain the rights to Outriders, Just Cause and Life is Strange, suggesting that these IPs have been relatively more successful historically than the two Marvel games in question.

One speculation that has been floated is that the publisher may want to experiment with blockchain technology more, as Square Enix’s CEO has expressed interest in NFTs as well as dedicated “play to earn” games. Now that it’s clear that the company has lost a significant amount of money by banking on Marvel IPs, this idea may not be going that far.

In related news, Marvel’s Avengers 2022 got off to a rather poor start, and it’s currently unclear whether Embracer Group even wants to pursue an update to the game’s widely criticized live-action model. The new publisher could always try to revamp the game, but it’s a serious investment that may or may not pay off in the end. At the very least, Marvel’s Guardians of the Galaxy won’t be embroiled in these issues, as it’s a standard narrative-focused action game without any real live-action elements.

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