EG7 Q1 2022 financials: EG7 has canceled Daybreak’s Marvel MMORPG

Remember earlier this month when NetEase announced that Jack Emmert was heading up a new NetEase studio called Jackalope Games, meaning that he was no longer heading up Daybreak’s Dimensional Ink or its inbound unnamed Marvel MMORPG? If you were wondering what that meant for the game itself, then your brain was going to the right place, as apparently EG7 has canceled it, marking at least the second time Daybreak has canceled a Marvel MMO.

Instead, the companies will write down assets and redistribute the Marvel money to the company’s other games (LOTRO and DC Universe Online are specifically mentioned) as well as “new game opportunities with [EG7’s] first party, original IPs,” which we’d like to believe means EverQuest 3. It is unclear right now whether layoffs will follow or Marvel staffers will also be diverted to existing Daybreak titles.

“EG7 today announced it will be discontinuing the development of the Marvel project at Daybreak Games. Based on the re-evaluation of the development risk profile, size of investment, and the long-term product portfolio strategy for the group, the board has decided to change the development priorities and reallocate resources within the group to focus on alternative long-term projects. The company had planned to invest more than SEK 500 million in the Marvel project over the next three years. The company will now diversify this investment across multiple, smaller size projects within the group, including the previously announced major upgrades to The Lord of the Rings Online and DC Universe Online, and new game opportunities with our first party, original IPs. Along with this reallocation, the company expects a write down of approximately SEK 230 million in project related assets in Q2 2022. As one of the long-term investments, the change to the Marvel project plan will not impact near to medium term revenues and profits other than the balance sheet and P&L impact related to the write-down.”

Readers will recall we had a few concerns about the project ourselves.

EG7’s Q1 2022 financial report continues to show huge year-over-year growth for the company; it also reiterates its sale of Russia-based Innova games and tells investors the “impact [is] isolated and not material” to the company’s ops and future and avoids further “Russia-related risk and ‘baggage.'” Daybreak continues to make up the vast majority of the company’s games revenue.