Square Enix has reportedly lost as much as $63 million in the last financial quarter, due to the high costs and poor sales of its title Marvel’s Avengers. David Gibson, an analyst, suggested Marvel’s Avengers must have sold only around 60 percent of its expected copies -- which says a lot about the market itself. 

Marvel’s Avengers should have at least met sales expectations, if not exceeded them. It's set within the Marvel Universe, one of the most popular franchises of this generation. The Marvel Cinematic Universe has brought in around $22.5 billion over the last 12 years and Marvel Comics is a staple of the industry.

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Furthermore, the development and marketing costs for Marvel's Avengers were massive. Square Enix and Crystal Dynamics spent approximately $100 million on development and another $60 million or so on marketing, with projections for up to $170-190 million combined, according to Gibson. 

These totals aren’t unheard of within the gaming industry, but they put Marvel’s Avengers up there with some of the highest cost games ever made (insofar as costs have been reported). For a game to fail in this way with such strong franchise backing, an absolutely massive pre-existing fanbase and plenty of money pumped into it, something must be missing.

The first is fairly obvious to anyone who has been following news about Marvel’s Avengers. The game released in a bad state, with plenty of bugs and crashes and a severe lack of content and customisation. Reviews were lukewarm and player hype quickly turned to disappointment, leading many to avoid purchasing the game. This was made worse by the fact that Marvel’s Avengers was developed according a service game model, but given a $60 price tag. With this price point and the recent failure of other service games, it’s likely many prospective players were put off.

The next issue is more nuanced. As mentioned earlier, the MCU has had unbelievable success, meaning Square Enix and Crystal Dynamics no doubt predicted Marvel’s Avengers would do well, too. But success in one industry does not follow directly from success in another. Unlike the more casual and less costly process of going to see a film for a few hours, buying a game -- particularly a game priced at $60 -- is a much greater investment. 

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The marketing budget for Marvel's Avengers should have seen a similar return on investment to the MCU movies, but the product itself wasn't solid enough for fans to want to invest. Square Enix seems to have spent a large amount on marketing, relative to its actual development cost, but it might have had better success putting more of that money into making a genuinely good game. This is particularly true if the publisher was also relying on dedicated player’s microtransaction revenue to recoup its expenses.

Of course, marketing still does have a large effect on a game’s success. Many point to Titanfall 2 when talking about something that had a strong critical reception, but poor commercial success. Placed between the releases of Battlefield 1 and Call of Duty: Infinite Warfare, the two largest FPS franchises in the industry, the game was almost doomed to fail from the start. The effect of this is still being seen today, with various developers pushing their releases to dodge Cyberpunk 2077’s highly-anticipated release date.

Marvel's Avengers didn't have that problem. Square Enix clearly relied too much on the brand and marketing, rather than bothering to create a quality experience people would pay for once, then continue to pay for whenever new content was released.

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