Square Enix and People Can Fly released Outriders earlier this year, but the game may yet to break even financially. Outriders is one of the prominent third-party titles offered through Xbox Game Pass and that may play a role in the profitability of the game.
According to developers at People Can Fly, the team has yet to receive any royalties from publisher Square Enix. Having received no royalties from the first-quarter sales of Outriders, People Can Fly presumes the game has yet to become profitable. The developers claimed in a recent investor note that it was due royalties from sales of Outriders only after all costs of the game had been recovered by Square Enix.
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According to the People Can Fly's engagement numbers, the looter shooter was able to reach 3.5 million Outriders players in the first month alone. Although this is a major community of players to reach, the costs of making the game may not have yet been recouped by Square Enix. People Can Fly is still working out the financial details so it may discover why it isn't receiving royalties.
People Can Fly CEO Sebastian Wojciechowski recently went on the record to say that the team doesn't have official Outriders sales figures. The team estimates that two or three million copies of Outriders have been sold and that this should have been sufficient to secure royalties from Square Enix. According to the CEO, Square Enix may not see the title as profitable or that it has broken even.
"The failure to achieve a level of profitability may also mean that the costs incurred by the publisher are higher than we expected," said Wojciechowski. "But I don’t want to speculate; we will continue to analyze the situation." Trying to point to a reason why Square Enix hasn't given People Can Fly royalties, Wojciechowski said, “The lack of payment from the publisher probably means that in Square Enix’s opinion this is not the case after all."
Another issue that may be a factor in this Outriders royalty issue may "have been determined 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 the Outriders game as an add-on to their products,”
The various costs of Outriders that Square Enix is apparently trying to recover in order to reward the royalties include production, distribution, promotion, and quality assurance. People Can Fly has also officially confirmed that Square Enix owns the Outriders IP itself. Sebastian Wojciechowski also admitted that costs incurred by Square Enix with Outriders may be higher than the developers expected.
Square Enix previously confirmed that the Xbox Game Pass deal was justified in terms of player acquisition and digital sales, but People Can Fly hasn't factored that into its numbers. Square Enix has also confirmed that Outriders is on track to becoming a major franchise thanks to the large audience, but People Can Fly may seek these royalties before working on a sequel.
Outriders is available right now for PC, PS4, PS5, Stadia, Xbox One, and Xbox Series X/S.
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Source: Video Games Chronicle