If you can pull your eyes away from the Activision-Blizzard/NetEase trainwreck that unfolded overnight, then we’ve got a blast of new financial news for you in the form of EG7’s Q3 2022 investor report. Sweden-based EG7, of course, is the company that owns (and has basically been taken over by leadership from) Daybreak Game Studio.
EG7 has been reporting continued growth all year, and it hasn’t slowed down yet; it ended the July through September quarter with 444.5M SEK, a jump of 25.5% when compared to this quarter last year.
Ji Ham, the Daybreak executive who’s been EG7’s Acting CEO since the ouster of Robin Flodin last year, specifically highlights the completed sale of Russia-based Innova (“[f]inally out of Russia and no more geopolitical risk exposure”), the completed transition of Magic Online to Daybreak, and “strong growth in [the] active player base” of Lord of the Rings Online owing to Amazon’s Rings of Power – an 11% boost in monthly active players compared to 2021 for the 2007 MMORPG.
Daybreak itself accounted for 216M SEK of the company’s 444.5M SEK overall revenues and 73% of the games segment all on its own.
“For Q3 2022, Daybreak contributed Net Revenue of SEK 216.2 (169.7) million, corresponding to 27.4 percent growth and Adjusted EBITDA amounted to SEK 64.8 (63.7) million. The adjusted EBITDA margin amounted to 29.9 (37.5) percent. The unfavorable comparison against the pandemic boosted result in 2021 remained throughout the quarter, and the growth year-on-year is largely driven by Magic Online and a FX tailwind. September marked an increase for The Lord of the Ring Online as a direct benefit of Amazon TV series launch, and the games 10th expansion ‘Before the Shadows’ was released November 15. Daybreak results represented the largest contribution amongst the group companies with Net Revenue contribution of 48.6 percent and Adjusted EBITDA contribution of 57.3 percent for the period.”
Contrary to past reports, this one doesn’t gush too much about in-development titles and updates for existing games, nor does it mention the double expansions due for the EverQuest franchise in Q4, though it does run down a list of key first-party and third-party brands, including EverQuest, H1Z1, DC Comics, LOTR, D&D, and Magic the Gathering. “We currently have a strong pipeline of new and reinvestment projects underway
topped with newly signed Work-for-Hire (WFH) deals to drive continuing growth for the group,” Ham notes.