EG7 Q4 2021: EG7 and Daybreak post huge revenues, bank future on MTGO, LOTRO

Overnight, Swedish gaming company Enad Global 7 posted its Q4 2021 financial report, which of course is useful to MMORPG players as EG7 has owned Daybreak and all of its MMOs since the end of 2020. EG7 reported significant revenue growth for the quarter, approximately $60M US, up a whopping 193% since this time last year.

There isn’t a ton in the investor presentation that we didn’t already know. Just ahead of the holidays, Daybreak had announced it would be taking over publishing for Magic The Gathering Online, bringing the existing Wizards of the Coast team in-house. EG7 uses this as the feature point of its investor PDF, telling backers it’s acquired “an existing profitable live service game” with plans to “revitalize” it.

“Magic Online is expected to contribute revenue in the range of SEK 90-100 million, game level EBITDA of SEK 25-30 million and neutral to positive cash flow, net of R&D investment to upgrade the product,” the company says, suggesting that Daybreak’s track record following its 2016 buyout of Standing Stone Games will help it turn around Magic as well.

Daybreak does still account for a majority of the company’s revenues.

“Daybreak currently operates 8 live titles. For Q4 2021, Daybreak contributed net revenues and adjusted EBITDA of SEK 172.4 million and SEK 51.4 million, respectively. Daybreak provided the largest contribution amongst the group companies with a net revenue contribution of 30 percent and adjusted EBITDA contribution of 43 percent for the period. With the addition of Magic: The Gathering Online to its portfolio, Daybreak will demonstrate further growth in 2022.”

But Daybreak is banking on even more, including a “boost” to Lord of the Rings Online thanks to Amazon’s TV show. The large updates to LOTRO and DC Universe Online mentioned in the last financial report are once again mentioned here as “medium-term” projects, while EverQuest, H1Z1, and PlanetSide (misspelled as “Planeside”) are included as having “new products with core owned IPs” for the long-term. Yes, eyebrows up at the idea that anything is happening with H1Z1, which has seen several of its versions closed and the rest left to malinger in maintenance mode for years now.

The Marvel MMORPG announced last quarter also isn’t mentioned here, though there’s a passing reference to the IP.

Incidentally, EG7 is a Swedish company, but it does own Innova Games, which is based in Russia and Luxembourg, and it offered a comment on the political situation: “It is too early to judge how the recent development between Russia and Ukraine may impact our business. Net revenue and adjusted EBITDA contribution from our Russian entity Innova in the fourth quarter amounted to SEK 74.1 million and SEK 26.4 million, representing 13 percent and 22 percent of the group total.”