The quarterly financials avalanche continues this week with Enad Global 7, better known to MMORPG fans as the company that bought Daybreak and then kinda got taken over from the inside by Daybreak like a freakin’ ninja.
Unlike a lot of companies this quarter, EG7 seems pretty pleased with itself in Q3, crowing about its “best quarterly results so far this year” in this quarter covering July, August, and September 2024. However, it’s still a revenue drop of 10% since Q3 2023; 465.7M SEK is around 42.67M USD. EG7 CEO Ji Ham says “the year-over-year decline is due to the unfavorable comparison against My Singing Monsters’ (MSM) elevated performance in 2023.” He also talks up the launch of MechWarrior 5: Clans in October, though that’s not accounted for here, saying, “Based on the initial sales and the positive reception, we expect the game to outperform its predecessor, MechWarrior 5: Mecenaries, with sales of over one million units over its IP license term.”
Worth a big note is confirmation here that yes, Daybreak did indeed acquire Singularity 6 this past July – that’s the studio behind cozy MMO Palia, which has yet to launch out of beta.
“During the quarter, we successfully acquired S6 (see note 8, page 26, for transaction details). For the period, S6 contributed with SEK 27.5 million in Net Revenue with EBITDA margin near breakeven. S6 is making steady progress against the goal of bringing its game, Palia, to a broader audience in 2025 with planned releases on PlayStation and Xbox. Our expectation is for Palia to become a strong contributor to Daybreak and EG7’s overall performance upon its full release across all major console platforms.”
Daybreak specifically had a nice quarter, besting the last four quarters by a big margin – and that’s before the big three end-of-year expansions for Lord of the Rings Online and the EverQuests had begun rolling out. Its 212M SEK (19.4M USD) revenue haul in Q3 represents what EG7 calls a “solid quarter for Daybreak driven by [EverQuest] and LOTRO’s strong performance.” We’ll take it!
The Q&A has a few more bits:
- Ham mentions Palia several times, saying it could be a “genre-defining game” that’s still in open beta; the team is shooting to get to more consoles next year. (There’s an implication that it might launch in 2025, but he doesn’t expressly say it.)
- Ham also spends some airtime talking up LOTRO’s specific contributions to Daybreak’s success this quarter; apparently, the opening of the legendary servers was a key factor. Expect more of those in the future as Daybreak aims to “capitalize on the success” of that content. “LOTRO’s prospects look quite nice because of that additional potential revenue vector,” Ham says.
- Ji Ham acknowledges that DC Universe Online has had some “issues” over the last year but says it is “trending nicely” now and has “stabilized with [the] new leadership team” – apparently, that’s former Star Trek Online crew.
- “Magic Online is doing great” and growing every year since Daybreak took it over.
- Readers will recall that Toadman – the studio to which Daybreak offloaded development of PlanetSide 2 – has suffered quite a lot of layoffs this year; Ham says those “cost-cutting” measures are now done as of the end of October and should help Q4.
- The new H1Z1 game is still in preproduction, but it kind of sounds as if it’s been backburnered in favor of other more pressing titles – in other words, they want to get Palia and the new Cold Iron game out the door first. That means a delay, but they don’t know how long.
