Gematsu: Enad Global 7 to acquire Daybreak Game Company

[nolifebr]

Enad Global 7 to acquire Daybreak Game Company

Enad Global 7 will acquire PlanetSide, H1Z1, DC Universe Online, and EverQuest developer Daybreak Game Company in a $300 million deal expected to close no later than December 31, the group announce…

www.gematsu.com

The same company that has bought Piranha Games:

Piranha Games acquired by Enad Global 7

Enad Global 7 (EG7) is adding to its assortment of gaming companies as the group today announced the acquisition of Mec…

www.gamesindustry.biz

 

[Deleted member 67800]

Daybreak Game Company, the game dev studio behind the early MMO Everquest and more recent forays into online play like Z1 Battle Royale, is set to be acquired by Enad Global 7 (EG7).

The deal will see EG7 scooping up 100 percent of the shares in Daybreak for a total of $300 million in both cash and EG7 shares.

"Daybreak Games has an incredible legacy, an impressive portfolio of game franchises and the most incredible community of players," reads a statement from Daybreak CEO Ji Ham.

"Combined with EG7, we are better positioned to expand on those amazing IPs, grow its development teams and player communities and fund exciting future games."

On EG7's part, the company says the Daybreak purchase will bolster EG7's game portfolio of games and properties while also bring strong development, operations, and strategy teams from Daybreak into the fold.

Gamasutra - EG7 pens deal to acquire Everquest and H1Z1 dev Daybreak for $300 million

 

[salromano]

Full PR here (it's linked in our post): https://www.enadglobal7.com/press/7758700B9A777D34/

 

[Dekuman]

Swedish company . interesting.

 

[Raigor]

$300 million

What

 

[Deleted member 3082]

Daybreak Game Company, the game dev studio behind the early MMO Everquest

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More like "the shadowy acquisitions group tied to sanctioned Russian oligarchs and Trump's dirty ass lawyer that plucked the meat from Sony Online Entertainment's corpse."

Columbus Nova - Wikipedia

en.wikipedia.org

I know next to nothing about Enad Global 7 other than they're Swedish so... possibly an improvement? I suppose they can't do any worse, If I remember right the first thing Daybreak did was cut their losses, cancel a bunch of stuff and lay people off.

 

[Voytek]

Anyone know anything about EG7? Never heard of it.

 

[Kolx]

That seems... low? did the company really collapse this hard to worth only this much?

 

[Toriko]

The more I see the prices people are paying for some of these studios , the more I feel Sony paid a lot less for Insomniac than they ideally should have. Insomniacs price seems to be a steal compared to some of these studios.

 

[WinFonda]

im really surprised Sony sold the everquest IP, i guess they were hurting for cash at the time... but there's a lot of potential there, even for non MMO stuff. they never really tapped into it. and daybreak basically did nothing with it all.

hopefully this ends up reviving EQ in some way. i'd love to see it return to form.

 

[HandsomeCharles]

I hope this is good news for all the developers and staff.

Planetside 2 Just had it's 8th Anniversary. That game keeps on truckin' 💪

 

[5taquitos]

im really surprised Sony sold the everquest IP, i guess they were hurting for cash at the time... but there's a lot of potential there, even for non MMO stuff. they never really tapped into it. and daybreak basically did nothing with it all.

hopefully this ends up reviving EQ in some way. i'd love to see it return to form.

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I don't think it's that surprising, EQ2 failed to light the world up like EQ did, and MMOs in general at the time were walking dead if your name wasn't WoW. They probably hadn't received any solid pitches for the IP in years.

 

[WinFonda]

I don't think it's that surprising, EQ2 failed to light the world up like EQ did, and MMOs in general at the time were walking dead if your name wasn't WoW. They probably hadn't received any solid pitches for the IP in years.

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yeah, they handed Blizzard an MMO monopoly because EQ2 was a technical disaster, and that's probably the biggest issue that kept it from gaining steam. I think the intrinsic value of the property--when they sold it---was quite high. Current Sony would definitely not sell it if they still owned it tho. Different circumstances.

actually maybe not... i thought they sold it much longer ago but apparently this was back in 2015... this year's been helll

 

[Xadra]

Two studios in two weeks.

What can we expect from EG7?
Any info on them, they don't have a Wikipedia page. 😿

 

[Deleted member 48991]

Anyone know anything about EG7? Never heard of it.

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This about sums it up:

• They started out as a studio called Toadman Interactive, who developed a relatively unsuccessful game called Immortal Unchained.
• They bought another small studio called Artplant who was developing a prequel to IGI (IGI: Origins).
• Toadman got listed on the stock market and started a work for hire project for Leyou Technologies, which got cancelled by Leyou, but is now being released by Toadman as EvilvEvil.
• They bought a pretty successful marketing agency called Petrol Advertising (who made trailers for a lot of AAA games).
• Then they bought Sold Out, which does physical publishing for various AA+ games and also does full publishing for some smaller A/AA games.
• They bought Antimatter Games, who developed Rising Storm 2 and were working on '83, then they put them on IGI: Origins.
• They bought Big Blue Bottle Games, a Canadian studio mostly working on mobile games.
• They bought Piranha Games, a Canadian studio mostly known for MechWarrior: Online and MechWarrior 5.
• Now they bought Daybreak Games Company...

They finance their acquisitions by giving the acquired company equity in the enlarged company and through bonds/loans.

Edit: After this acquisition the main owner of Daybreak, Jason Epstein, will own 10% of EG7's shares, potentially making him the largest shareholder. You can see their current list of shareholders here.

 

[Voytek]

This about sums it up:

• They started out as a studio called Toadman Interactive, who developed a relatively unsuccessful game called Immortal Unchained.
• They bought another small studio called Artplant who was developing a prequel to IGI (IGI: Origins).
• Toadman got listed on the stock market and started a work for hire project for Leyou Technologies, which got cancelled by Leyou, but is now being released by Toadman as EvilvEvil.
• They bought a pretty relatively successful marketing agency called Petrol Advertising (who made trailers for a lot of AAA games).
• Then they bought Sold Out, which does physical publishing for various AA+ games and also does full publishing for some smaller A/AA games.
• They bought Antimatter Games, who developed Rising Storm 2 and were working on '83, then they put them on IGI: Origins.
• They bought Big Blue Bottle Games, a Canadian studio mostly working on mobile games.
• They bought Piranha Games, a Canadian studio mostly known for MechWarrior: Online and MechWarrior 5.
• Now they bought Daybreak Games Company...

They finance their acquisitions by giving the acquired company equity in the enlarged company and through bonds/loans.

Edit: After this acquisition the main owner of Daybreak, Jason Epstein, will own 10% of EG7's shares, potentially making him the largest shareholder. You can see their current list of shareholders here.

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Interesting. Thanks for this.

 

[Spirited]

So this is the weekly gaming acquisition, huh? Seems like the industry really has heated up in the M&A area.

 

[Deleted member 54073]

I remember being excited for Everquest Next 😂

 

[ToddBonzalez]

Seems overpriced imo. I suppose Daybreak has some semi-valuable IP like Everquest and Planetside. Maybe that was enough to bump up the price.

 

[stryke]

isnt this like the 3rd new owner since being sold off from Sony?

 

[Effect]

yeah, they handed Blizzard an MMO monopoly because EQ2 was a technical disaster, and that's probably the biggest issue that kept it from gaining steam. I think the intrinsic value of the property--when they sold it---was quite high. Current Sony would definitely not sell it if they still owned it tho. Different circumstances.

actually maybe not... i thought they sold it much longer ago but apparently this was back in 2015... this year's been helll

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This. Had Everquest 2 not had so many technical issues the fortunes of that game and SOE at the time would have been very different. The complete waste of the Everquest IP has always bothered me though. Everquest 1 build out an insane amount of lore and settings that could have easily been minded in a TON of ways outside of the MMO but it was not done so. Not even by Sony itself. The stuff they did do felt half hearted and done on the cheap it seemed. They basically gave the market over to Blizzard and WoW.

 

[Deleted member 48991]

isnt this like the 3rd new owner since being sold off from Sony?

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According to Wikipedia there was only one intermediary owner? That owner will now become the biggest shareholder in EG7 (though not a majority shareholder). Also Daybreak is bigger than all of EG7 combined in terms of assets, equity and liabilities, so this feels more like a merger than an acquisition.

Seems overpriced imo. I suppose Daybreak has some semi-valuable IP like Everquest and Planetside. Maybe that was enough to bump up the price.

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They are paying $200 million in cash, $100 million in shares. Still seems expensive... Also none of that is based on "earn out", which would be an amount paid based on future revenue. Seems to me that EG7 is taking on a pretty big risk with this acquisition.

 

[BeepBoop]

That seems... low? did the company really collapse this hard to worth only this much?

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H1Z1 got pretty much killed by PUBG, it was pulling in a lot for DBG at its peak, which was around when it was sold from Sony for the 500m it was worth at that time or what not

They are paying $200 million in cash, $100 million in shares. Still seems expensive... Also none of that is based on "earn out", which would be an amount paid based on future revenue. Seems to me that EG7 is taking on a pretty big risk with this acquisition.

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DBG has 178 million registered accounts, 80m in revenue from sep 2019 - sep 2020 with an ebitda of 29m, a 10x multiple on that seems pretty standard for their industry, so the price/value seems normal

 

[BeepBoop]

isnt this like the 3rd new owner since being sold off from Sony?

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Just 2, once to reform as DBG, the now to EG7



They have some more info in https://www.enadglobal7.com/wp-cont...entation-Dec-2020-Acquires-Daybreak-Games.pdf about the DBG side and such

The original EQ had "bookings" of $11.5m YTD, has 66k members / 82k monthly active users (highest paid members, second highest MAU of the six games, ~3x its "sequel" EQ 2 and ~2/5ths of DCUO MAU, while having more paid members then both combined)
EQ1 has the highest EBITDA at 30%

There is a lot more in there which is pretty neat since there has been basically 0 data like this for DBG/SOE ever since their like 550k or whatever members during the Planes of Power Expansion in EQ1 like 16 years or whatever ago


Another weird thing in that is they call out (DBG) having a Marvel license, but it doesn't seem like they have any Marvel MMO's? They do have an unannounced game listed though

 

[WhovianGamer]

The more I see the prices people are paying for some of these studios , the more I feel Sony paid a lot less for Insomniac than they ideally should have. Insomniacs price seems to be a steal compared to some of these studios.

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Insomniac didn't own very much IP and the bulk of their success was with Sony. They also didn't have any licenses that they could use without Sony (such as Spider-man). The cost of Insomniac was mostly the two studios and their expertise. I think it was a steal for sure, but I understand why it wasn't a huge investment.

 

[Deleted member 48991]

DBG has 178 million registered accounts, 80m in revenue from sep 2019 - sep 2020 with an ebitda of 29m, a 10x multiple on that seems pretty standard for their industry, so the price/value seems normal

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This is their first acquisition of a studio with major IP's, so maybe 10x EBITDA is not that bad, but it's the highest multiplier for any of their acquisitions until now, e.g. Piranha Games at 3.7x EBITDA excluding earn-out, Sold Out at ~4.6x EBITDA excluding earn-out, Petrol Ad at 6.8x EBITDA excluding earn-out or their acquisition of Antimatter Games (which they got practically for free).

 

[KernelC]

$300 million

What

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yeah wtf lol

 

[Deleted member 48991]

For those wondering, this purchase did not include Cold Iron Studios, a studio that earlier this year was supposedly acquired by Daybreak and is working on a game in the Alien franchise. EG7 does seem to have an exclusive option to buy them at a later stage. EG7's CEO discusses this in an interview.

I read on the Internet, you can see that it was an acquisition of an online game based on Alien or it was the acquisition of a company that developed this game. Can you comment on this? Do you get this company as well or can you explain this?

I think it's great that, you know, because this has been one of the things we haven't had a chance to comment on yet. And the thing is that it happened. They actually acquired a company in the middle of our transaction. So what we said was that we will carve it out and create an option for us, an exclusive option for us as a business to buy it later. And the reason was just because it would complicate the deal and prolong the deal, because now we needed to open up all the renegotiations again, which we had already looking down all the financials and all the, you know, what the business was. And we just felt that that wasn't worth it. So at this point, it's going to be separated from the Daybreak business and then hopefully we'll be acquiring it back in the future after it's launch this game or something.

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