EG7 cancels Marvel game, to re-invest $50m in other areas including original IP

Thread title typo, meant $50 million USD (SEK 500)

Some of this money could be headed to the EQ franchise

https://news.cision.com/enad-global...s-across-multiple-long-term-projects,c3573881

Also, the Q1 CY22 Financials are out:

https://news.cision.com/enad-global...od-january-1--2022-to-march-31--2022,c3573929

You see reinvestment, I see they lost millions of dollars in developing a new game and they’ll be looking to milk that money out of existing IP.

Some gaming companies still insisting NFTs and Crypo is gonna be the way to go despite it all literally being on fire right now, unless its stabilized since the huge crash recently. More likely we'll see a surgent(surgence?) of pay to win / cash store features like Lost Ark.

It's wise (and normal) to pull the plug on poor performing games, or development timelines that are overly expensive.

Can't judge solely on any Marvel or Star Wars IP anymore. Unless a company had a rock-solid contract predating the Mouse's acquisition of those IP's, they're pretty much doomed to fail.

Just look at everything surrounding either of them over the past decade. Look at the decline in available options. Not just in gaming, but universally.

I know of at least one game that has Marvel, Star Wars, AND straight Disney IP available.... outside of NA only (EU was shut down a few years back). Why? Because the laws of those countries shield them from the icy grips of the Mouse. I know another (primarily Disney IP) that has gradually become nothing but non-stop ads and "limited time" package "deals" to try to milk more money.

There are several large global markets. Unless it can be extremely profitable outside of the costs paid to Disney... Most/many endeavors will ultimately fail. The yearly license fee, the royalty fees, the initial use fee, etc.. etc.. etc..

I'm not saying there couldn't be more to it... but just look at those IP's as a whole since they were taken over. This move from E7 doesn't surprise me at all.

Yes…but that doesn’t contradict saying that they’ll be looking to recover their losses from their existing portfolio.

With Microsoft’s acquisition of Blizzard, I wonder if major tech companies (i.e. Sony) are in the market to acquire Daybreak but are not interested in the burden of developing major titles or dealing with Disney.

I wonder how many Devs in that Marvel division are going to lose their jobs? And how many will have skill sets that would or could be transferable to EQ?

I wonder if Sony or another big name tech company is expressing interest in acquiring EG7 or Daybreak but any link to Disney (a rival, competitor, or perceived monopoly) would kill the deal.

By severing or limiting Disney IPs, you have a company or studio with fewer legal issues (licensing or regulatory concerns) to deal with during acquisition.

I would prefer Microsoft to be the one to acquire Daybreak/EG7 because they are much more consumer friendly with a much wider platform than Sony. Sony has 1 current gen console, 1 previous gen console, and a limited multi-tier online platform.

Microsoft has Window and a working relationship with Valve, Nvidia, AMD, Intel among others. Then they also have XBOX gaming systems, XBOX Game Pass, EA Pass and the assets of all the studios they have purchased in the last several years including Bethesda, Activision Blizzard and others.

I have no problem with Sony generally speaking but I think Microsoft would be a better owner and better steward of the IPs than Sony was or would be.

Specifically on the mmo front, under SoE we got EQ, EQ2, Star Wars galaxies... So i don't think their track record was that bad. Daybreak in its own right wasnt nearly as bad as i tought they would be at first.

Don't get your hopes up yet, Norrath....

With as old as the tools are for EQ, I'm not sure there are too many experienced developers that would be able to be productive soon after being hired.

I used to know how to program cnc machines using binary code punched out on paper tape (nc), but I don't think I'd be very useful trying to do that today as an example.

Sony sold EQ in 2015. SOE was a division of Sony. Then not wanting to have Sony in their name, they changed it to daybreak. I think it would be odd if Sony bought them back again.

This honestly smells like the same ole, same ole of "funnel the money EverQuest makes into new projects that will fail, rather than bolster EverQuest itself".

This is good news! Daybreak Games should play to its strengths which of course is the EverQuest intellectual property.

It's time for a brand new EverQuest MMORPG. We have the technology. We can rebuild Norrath.

^ This guy thinking EQ is some sort of cash cow that studios are just milking hand over fist....

It's not. If EQ even remotely drew that much revenue, there wouldn't be a skeleton crew for a Dev team and bugs would be addressed in a timely manner.

According to the investor information EG7 released when they acquired Daybreak back in late 2020, EverQuest was responsible for the second highest gross and the highest amount of EBIDTA of any game in the Daybreak portfolio.

In the latest report just released:

So EverQuest is the most profitable game in Daybreak's profile, and Daybreak is the largest contributor to their game segment, I'll let you do the math to figure out if EverQuest is a cash cow or not for them.

That EBIDTA difference was a whole 2% btw.

Yes, Daybreak Game Company's estimated annual revenue is currently $31.3M.

Which does not a cash cow make.

Compare it to:
Activision Blizzard $9.1B
Electronic Arts $5.54B
Blizzard Entertainment $1.8B
Riot Games $1.7B
Roblox $1.7B
Rockstar Games $1.3B
Bungie $349.8M
Bethesda Softworks $321.5M
Epic Games $300M
Minecraft (Mojang) $117.2M -That is for Minecraft alone not the portfolio of Mojang

EG7 lineup:
DayBreak $31.3M
Big Blue Bubble $19.4M
Piranha $17M
Innova Intellectual Properties 14.2M
AnitMatter Games $6M
Toadman $5M
Fireshine (Sold Out) 3.5M
MTG acquisition ~$3M

This bit: Revenue contribution of 47 percent and Adjusted EBITDA contribution of 66 percent for the period. Has more to do with having 100% share ownership of DPG and represents coming out of the slump from the acquisition phase as well as only being representative of Q1 totals of the Gaming portion of EG7, which only amounts to 57% net revenue and 75% EBITDA.

Note: Their gaming segment EBITDA only amounts to about $12M. So about $9M from DPG, split by 8 titles. About $2.7M of that is from EQ and $2.5M from DCUO

Additionally, in that segment, DPG operates 8 out of 10 titles. Of course they're going to be the largest competitor when the other two titles are MechWarrior 5 and My Singing Monsters. With the exception of DCUO, D&D, and LoTR, DPG's titles are non-licensed IP.

Does it make money? Yes or it would have been shut down. Is it the biggest thing in DBG/EG7's game bucket? Sure thing. Do they utilize some of the profits to fund other games/projects/endeavors? Yup.. standard business practice.

https://www.enadglobal7.com/wp-content/uploads/2022/05/EG7-AR-2021-ENG.pdf

https://www.enadglobal7.com/wp-content/uploads/2022/05/Investors-deck-Q1_Final-2022.pdf

Didn't change much from their February Presentation:
https://www.enadglobal7.com/wp-content/uploads/2022/02/EG7-Investor-Presentation-February-2022.pdf

If you notice, there were no plans to invest more into EQ/EQ2 this year, prior to or following the announcement of canceling the Marvel MMO.

There's the initial acquisition report:
https://www.enadglobal7.com/wp-cont...entation-Dec-2020-Acquires-Daybreak-Games.pdf

Which lines up exactly with what they say they have planned for 2022. Combined with 2020, 2021, and 2022 reports, it shows a near perfect prediction of why those values are what they are. (the whole Russia thing caused some losses, as well as expected launches of new titles). It also makes sense that their mid term funding projects would focus around LoTR and DCUO over EQ.

So to answer your question: No I don't believe it makes EQ a "cash cow" for EG7 or any other major studio. (Maybe for poor TRION with all their bad decision making)

Ot sure if concretely you can reinvest an effort.
May be if you are smart, but they don’t look very smart if the have to stop a game on Marvel.