Daybreak has now been hit with layoffs [Confirmed]

    
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Daybreak has now confirmed the layoffs, and we’ve got lots more information from our own sources – see below for updates and context.

Multiple game industry veterans are discussing layoffs at Daybreak today. H1Z1 UI Software Engineer Grat Crabtree says he was among those let go.

Still others chimed in offering condolences (and jobs): Elizabeth ZelleTim Borrelli, David Bass, Ryan Elam, Doug Hill, Evan Berman, Mitch Dyer, Jen Bridges, Linda Carlson, and Javier Perez.

Feldon of EQWire reports anonymous sources quoting up to 100 people let go. (One of our sources believes it’s closer to 70 – see below.)

Massively OP extends its deep sympathies to all the innocent developers and employees affected by the move. Former and current Daybreak employees can reach out to Massively OP on our tips page. We protect our sources.

Context so far

The layoffs come after two and a half days of bizarre Daybreak statements. On Tuesday, we covered the apparent fate of Daybreak’s corporate overlords, chronicling the US government’s asset freeze of Russian megacorp Renova on down the chain to its subsidiary Columbus Nova, which has for three years been the nominal owner of Daybreak since it parted ways with Sony and dropped the SOE name. But when reached for comment on the story, Daybreak informed the editors of Massively OP that our understanding of Daybreak’s ownership was in error. Stunning the MMORPG community and beyond, the company spokesperson insisted it had “no affiliation with Columbus Nova” and that former Columbus Nova rep Jason Epstein “is and has always been the primary owner and executive chairman of Daybreak Game Company” since its founding in February of 2015. When pushed for clarification, Daybreak told us that the “distinction was never corrected in the past, so [it is] correcting that now.”

Of course, the internet still has all of the original documents, press releases, privacy policies, and public statements issued by Daybreak, Columbus Nova, and then-President John Smedley back in 2015 and since then, all of which made abundantly clear that Columbus Nova had acquired the whole company, as a company, and that Epstein was not the sole owner. Subsequent research showed that what appear to be Daybreak reps have attempted to alter the company’s Wikipedia page to reflect its new ownership claims since the government sanctions were announced, earning a block from the online encyclopedia’s editors; a 2015 press release (now here) announcing Columbus Nova as the new owner and the 2015 privacy policy (now here) that had been hosted on Daybreak’s web servers were also apparently memoryholed by the company.

Yesterday, Daybreak’s Chief Publishing Officer and former Senior Vice President, Laura Naviaux, abruptly announced she’d left Daybreak.

This afternoon, Daybreak issued a post on its own forums addressing the fiasco and admitting to the deletion of documents; it reiterates claims it already made to Massively OP about who currently owns the company in that it’s standing by the baffling claim that Epstein has always owned Daybreak, in spite of Epstein, Daybreak, and Columbus Nova all telling everyone differently in 2015 – it calls three years of press releases and privacy policies a “miscommunication.” It further insists that unspecified “rumors” about the company’s entanglements are false (again, Daybreak is apparently maintaining that under the claim that Columbus Nova was never Daybreak’s owner, Columbus Nova’s financial and political messes do not affect it). The company does not address the abrupt departure of its former VP/Chief Publishing Officer yesterday morning. It also does not explain why it represented to its customers and the media that Columbus Nova had acquired it for the last three years, nor why it waited until April 2018 to correct the record.

With thanks to Doug for the original tip!

Update #1

Daybreak has now confirmed the layoffs.

“Daybreak confirms we are realigning our workforce to better position our company for the future,” a Daybreak spokesperson said in an email to Massively OP. “Because of this, we have had to make an extremely difficult decision to part ways with some of our employees across various disciplines at the studio. We are doing everything we can to take care of each affected individual by providing them appropriate transition assistance. Daybreak remains focused on publishing and developing large-scale online games and will continue to service our existing and long-standing games and franchises.”

Update #2

A Daybreak spokesperson has confirmed to me that the layoffs were not isolated to one studio (as speculation is currently running). According to the spokesperson, all of Daybreak’s studios were affected, but none of the games will be – that includes H1Z1, whose PC development and recently announced PS4 port is still scheduled to continue.

Update #3

MMORPG.com says it has a source claiming that Daybreak is currently in acquisition talks with a number of studios, including Ashes of Creation company Intrepid Studios. We have reached out to Intrepid for confirmation.

Update #4

In speaking on background with our own sources this afternoon, we are given to understand the number of people laid off was around 70, not 100 as earlier suggested. At least one source believes the layoffs are completely unrelated to the ongoing Columbus Nova shenanigans and instead are a direct result of H1Z1’s poor performance, having been planned for a while, which does make a certain amount of sense (we’ve been tracking H1Z1’s downward trajectory for months now).

Update #5

Massively OP has been informed by a trusted source that Daybreak’s claims that it was owned by Jason Epstein, not Columbus Nova, for the last three years are actually true, if confusing as hell. If this is accurate, it’s completely possible that Daybreak is being honest about the Russian sanctions being irrelevant (which is what we were originally asking them to rebut on Tuesday when they instead dropped the “Columbus Nova who?” bomb). It is not currently clear why Daybreak waited so long to correct its statements, why it isn’t being forthcoming about the exact nature of what it knew and when, why it created unnecessary suspicion by deleting the historical record, or why it picked this exact moment to drop layoffs, knowing how it would look.

Update #6

Intrepid Studios boss Steven Sharif has declined to comment on whether or not Intrepid is in acquisition talks with Daybreak. “It has long been my personal policy not to comment on rumors,” he told Massively OP. “Even if we were in talks with Daybreak for an acquisition, we would not be able to comment. Additionally, I saw the news of recent layoffs at Daybreak today and would like to extend my condolences to those affected. Daybreak (SOE) has an incredible history of creating some of the most cherished franchises that are near and dear to our hearts, and the people laid off today are some of the most talented developers in the industry. Intrepid Studios wishes them the best in their future ventures and I know they will go on to accomplish great things.”

Update #7

Last update of Thursday: MOP’s Justin and I have put together a special edition of the Massively OP Podcast this evening to recap everything we know and try to make sense of it all.

Update #8 (4/27)

A few more updates and tips came in overnight.

  • The PlanetSide 2 team says on Reddit that it has been unaffected by the layoffs.
  • We’ve been told that most or all of the Just Survive team was let go and the game is unlikely to see updates in the future – this apparently per developers on Discord. (Thanks, Sean!)
  • A credible source familiar with the situation told us that the Player Studio program – that’s the program that pays players to design gear that goes into Daybreak’s games – may be in jeopardy as the one and only employee overseeing the project was among those let go yesterday. Apparently, Player Studio designers have not yet been informed as to the status of their assets, future paychecks, and participation going forward.

Update #9 (4/27)

Ars Technica has picked up the story from us now and has gotten fresh statements from Daybreak (it sounds like the same Daybreak spokesperson we’ve been speaking with). The spokesperson claims that Jason Epstein was an “ownership partner of Columbus Nova” when he purchased Daybreak in 2015 “through his wholly-owned LLC, Inception Acquisitions” – a company our commenters have been theorizing about over the last few days – which “[led] his purchase to be conflated” (yes, it uses the passive there) with Columbus Nova’s ownership. They didn’t think it would be a “big deal” since he owned both groups as the primary owner.

“What they should have said was ‘Jason Epstein, owner of Harmonix, purchased Daybreak,’ [or] ”Partners of Columbus Nova purchase Daybreak,” the spokesperson reportedly said. Epstein, the company claims, has since left Columbus Nova and they just never got around to repairing the record until now (it “[fell] through the cracks”). This more or less comports with what we’ve been told by other inside sources (as above) but certainly appears to stand in contradiction to the Tuesday claim that Daybreak never had any affiliation with Columbus Nova.

More interestingly, this spokesperson now claims that Renova Group also doesn’t own Columbus Nova, that while CN did “[manage] some accounts” for Renova, those accounts weren’t “tied to Russia.” It is not clear why Daybreak and Columbus Nova didn’t correct the record on that, given the three years of “widespread reporting” it acknowledges went on (and it never bothered to correct).

Apparently that is changing, as given this new claim – that Renova doesn’t own CN – Daybreak has politely suggested we change our original title, which refers to other sources’ claims that Renova owned CN and both were subject to sanctions. At this point, given the constant changes in story, we believe the burden is on CN to prove its ownership one way or another. After all, as @Nobody-Special tweeted, Renova’s own website claimed that it owned Columbus Nova up until February of this year; that wasn’t just something the press have been making up over the last three years.

It is not currently clear when if ever that stopped being the case, but again, it contradicts the Daybreak spokesperson’s claim that CN merely managed some accounts for the Russian company.

Get caught up on the whole Daybreak/Columbus Nova ordeal:

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Bango on Laurelin

Good to know that when I bought lotro points last year I was laundering Putin’s dirty money. Glad I stopped doing that.

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Fenna

wrong company. lotro is not a daybreak games. sure they use them for payment but money doesn’t go to daybreak (well most of it don’t)

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Bango on Laurelin

Seems you’re a bit behind the curve….

http://www.containsmoderateperil.com/blog/2018/4/26/lotro-and-daybreak-game-company

ModeratePeril not known for being anything other than producing reasoned and well-researched material.

But you carry on kidding yourself.

VentyRed
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VentyRed

Time for the memes…

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Edene

Cause a kerfluffle

VentyRed
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VentyRed

Daybreak PR in action… (sorry for leaving out the Oxford comma)

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VentyRed
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VentyRed

‘member?

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Delphos
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Delphos

Its a great shame to see the great and incomparable Everquest Franchise, the strongest IP of the genre i love most, in the hands of such dishonest people, clearly full of lies and dirty secrets. Hope someone decent may purchase EQ franchise from the likes of Daybreak and CN someday.

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Kevin McCaughey

Millions of small transactions for buying virtual goods and currency is an ideal medium for laundering money. I think this is exactly what the Russians bought it for. The cost of running the studio is almost incidental when compared with the vast sums of Lottro and EQ currency that are laundered through every day, day after day. The shell company scam also allows the transfer of money all the way to Russia, complete with a wall of obfuscation that even a trained forensic accountant will have trouble making their way through (IF they were able to get the European Parent companies ledgers, which lie out of regime, as do the even further afield shell companies in the Bahamas etc.)

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Jack Pipsam

R.I.P Just Survive if that’s true, although it’s still in Steam Early Access.

I wonder if they’ll scramble together some kind of finishing update just so they can say they launched it.

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Scott

The more I have dug into this and the more I find and I am fairly sure they will be able to on paper say CN doesn’t own DB and Renova doesn’t own CN. But that doesn’t mean there wasn’t a flow of money from one to the other.

They have been called investment vehicles.

I didn’t post the 2015 public tax records from Texas but they do show Inception Acquisition as the owner and also still list Smed as president. So it has been the same owner since the sale. Which DB has now said Inception Acquisition is owned by Epstein.

VentyRed
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VentyRed

Inception Acquisition…

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Kevin McCaughey

BUT… the money chain will dry up and they won’t have any money above what they are making to pay the staff. Hence the firings. They are getting it down to a level of payroll they can afford.

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dsmart

I didn’t post the 2015 public tax records from Texas but they do show Inception Acquisition as the owner and also still list Smed as president. So it has been the same owner since the sale. Which DB has now said Inception Acquisition is owned by Epstein.

Yup, I have them – that’s why I had suggested (on Twitter) that you look at them and you’ll notice what’s going on. My well-placed source shared a lot of other details that aren’t yet public, and said not to disclose. But what I have been told and shown, are what guide my comments that they are ALL lying.

It’s almost as if these people don’t know how paper trails work. If they get themselves investigated – which I am 100% certain that they will after the June deadline, as that’s part of compliance with the sanctions – an investigator is going to look at ALL these public statements they’re making. And if compared to docs and the reality they don’t match, a lot of people are going to be in a lot of trouble.

Though RS and JS are no longer there, they were there from the very beginning and were instrumental in the deal making process. So I can’t even imagine what those guys are thinking as they read all this stuff.

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K

Lots of shady stuff going on beneath the sheets in this industry that the public is completely unaware of, and that’s the way it has always been.

It’s unfortunate for the consumers.

Goes without saying, that this is going to blow up in their faces.

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syberghost

Two words for why this won’t work:

Forensic accounting.

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Greaterdivinity

Jesus, these additional updates.

This sure is getting to be a fucking wild story. Thanks for helping break it, MOP, glad to see big sites properly crediting you for doing much of the initial digging on it.

This sure is interesting/entertaining/worrying. This many story changes within a weak is absolutely not normal in any way and definitely undermines the credibility of anything they say. This is kinda a shitshow to watch unfold.

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Kayweg

Next thing you know they were never sold or acquired by anyone, “Daybreak games” was just a figment of our imagination, and they really are still just SOE.
Probably somewhere around update #15.
If this is indeed incompetence rather than malicious intent, then how they managed to even run a company in the first place is a complete mystery to me.
I don’t buy it, a slab of concrete is more likely to fly than that story.

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Neiloch

Daybreak has good reason to distance itself from Columbus Nova. “You have to cut all ties,” William Courtney, a Russian diplomacy expert and adjunct senior fellow with the RAND Corporation, told me over the phone. “You can’t have any dealings with [sanctioned companies]whatsoever…if they want to continue to do business in the United States.”

And this is why literally any official statement from any company involved about this situation needs to be treated with heavy skepticism if not ignored outright.

What would you lie about to keep from being destroyed?

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Edene

But wait a minute.
If there is no affiliation between DBG and CN, then how did our source within DBG get a hold of secret documents showing the (non)relationship between Renova Group and CN??

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Denice J. Cook

Oh what a tangled web they weave, when first they practice to deceive! ;)

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Bryan Correll

Sigh. This whole thing is such a shit-storm that I can’t make jokes about it. Because I can’t think of anything more absurd than reality.