Rocksteady Studios, the developer behind the highly successful Batman: Arkham series, has been operating at a pre-tax loss for several years. According to a report from TaxWatch UK, the studio has only been able to stay afloat thanks to almost £10 million in tax relief.
Between 2014 and 2017, TaxWatch notes that Rocksteady’s total turnover amounted to £51.8 million, helped in no small part by the release of Batman: Arkham Knight in 2015. Accounting for £47 million in development costs, however, the studio only made £4.8 million in gross profit. With the addition of further admin expenses, Rocksteady operated at a total loss of £5.2 million.
As a UK studio, however, Rocksteady was able to qualify for nearly £10 million in tax relief, allowing it to end up with a final profit of nearly £5 million over this period. The company’s pre-tax losses mean that, while receiving this financial assistance, it was not required to pay corporation tax. Taxwatch’s report states that Rocksteady does not receive a share of its games’ profits, but instead receives payments from its American parent company Warner Bros.
That means that, despite making top-selling games, Rocksteady technically operates at a loss. Batman: Arkham Knight has sold over five million copies, making it the fastest-selling game of 2015, and the second best-selling game of the year.
The new report follows another, from earlier this year, in which Taxwatch revealed that Rockstar North had claimed more than £42 million in tax relief through the scheme for its work on GTA V, but hadn’t paid any corporation tax on the game’s profits.
Rocksteady did not respond to a request for comment ahead of publication.