Outriders couldn’t recoup development costs as People Can Fly still received no royalties from Square Enix

People Can Fly has stated that Square Enix still paid it no royalties for Outriders. This means the game might never recoup its development costs, so the Polish studio could start receiving a portion of its revenue.

This information was disclosed in People Can Fly’s latest financial report (spotted by TweakTown)

• The developer should receive royalties based on the amount of profit from the game’s sales, according to an agreement with Square Enix.
• This is a common practice in the games industry, when a studio enters a deal with a publisher, which finances the development and starts paying the team a portion of revenues once the costs are recouped.
• People Can Fly said that it managed to deliver Outriders on time. In August 2021, the studio also noted that it saw no royalties from Square Enix, although the publisher highlighted the game’s success at launch.
• Outriders attracted 3.5 million players in a month, with Square Enix saying that the title could expand into a new franchise. However, these numbers don’t really say much about actual sales, considering that the game was also available on the Game Pass at launch.
• In its latest financial report, People Can Fly noted that it didn’t receive any royalties from the publisher for the period to December 31, 2021. This means that Square Enix still thinks that the game’s sales were insufficient to recoup the costs and expenses to develop, market, and distribute Outriders.
• “There can be no assurance that net proceeds from the sale of Outriders in future periods will be sufficient for the publisher to recover the costs incurred and to pay royalties to [People Can Fly],” the developer’s statement reads.
• People Can Fly said that it will inform investors immediately if it eventually receives royalties from the publisher.
• All rights for the IP, including any DLCs and upcoming titles, were transferred to Square Enix under the development and publishing agreement.

As of now, People Can Fly have several games in the making, including Project Dagger (to be published by Take-Two), a new DLC for Outriders, Project Gemini (to be published by Square Enix), and Bifrost (self-financed and self-published project).