Enad Global 7, the company that bought Daybreak just about a year ago, has now dropped its Q3 2021 financial report. Just one quarter ago we suffered a bout of whiplash from the ultra-fast ouster of Robin Flodin, EG7’s CEO, and replacement with Ji Ham, Daybreak’s own CEO. Ham says this past quarter was a “period of transition” for the company, essentially a way of explaining why the company’s incomes have stabilized at over 400% revenues compared to this quarter last year, now that it’s stopped buying up small- and mid-sized studios, though the outlook for next quarter looks even better.
The pipeline chart is where the fun is here for MMORPG players. First of all, Daybreak continues to promise a “major revamp to upgrade the visuals, modernize the experience, and release on consoles” for Lord of the Rings Online – something EG7 promised last December, too, to the immense skepticism of MMORPG players.
It’s also plotting good things for DC Universe Online: an “investment in graphics upgrade and the largest expansion content to date for 2023.” Shooter fans will want to keep an eye on Antimatter Games’ Rising Storm-inspired military shooter MMO as well.
And hey, remember how Daybreak was working on a Marvel MMORPG at one point but canned it? And how Jack Emmert’s Dimensional Ink substudio in Austin was working on a new AAA MMORPG but wouldn’t spill the beans on what the IP was or even commit to publishing it under the Daybreak banner (which was super weird since Daybreak owns Dimensional Ink)? Well, the investor PDF just… comes right out and says that Emmert and Dimensional Ink are working on an unannounced Marvel MMORPG. So… that’s happening.
Worth noting here is that the upgrades for LOTRO and DCUO are flagged as “mid-term” while the new Marvel MMORPG is “long-term,” so the 2023 date for DCUO’s expansion gives us some context for when all this is happening.
The investor report this round does refer to the Flodin ouster, but there’s no mention of the investor interview kerfuffle and stock plummet after which Flodin was hastily removed; instead, the leadership changeover is described as part of the plan.
“During the quarter, the company reorganized its management team at the holding company. Robin Flodin, the founder and CEO, transitioned out together with other senior managers, including the Chief Commercial Officer and the Chief Operating Officer. This reorganization reflected the Board’s decision to change the operational approach. After a careful consideration, the Board determined that the more optimal path for long-term shareholder value creation was through decentralized operations versus a centralized model. These changes went into effect at the end of August and since then the company has transitioned well, working closely with each business unit leadership to successfully effectuate these changes. Going forward, the parent company organization will be comprised of the group level leadership, to secure long-term shareholder values and roles necessary for a listed company, including CEO, CFO, investor relations, corporate development and support roles; while the operational leadership will reside with each business unit.”
A few other bits of note: EG7 admits PlayStation sales of MechWarrior 5 were “low impact, resulting in an operating loss for the quarter,” and Daybreak is bringing in the majority of game revenues for the company.
“Daybreak currently operates 7 live titles. For Q3 2021, Daybreak contributed net revenues and adjusted EBITDA of SEK 169.7 million and SEK 62.4 million, respectively. Daybreak provided the largest contribution amongst the group companies with a net revenue contribution of 41% and adjusted EBITDA contribution of 70% for the period. The summer months are typically the lowest period seasonally for Daybreak’s live service titles due to the vacation time and limited content updates. Other than the typical seasonal trends, Daybreak’s titles continue to demonstrate their stable and strong profitability.”