Ji Ham Speaks about Enad Global 7

I am finally catching up on things that happened a month ago at this point.  In this case there was a change at Enad Global 7 that saw Ji Ham, who was heading up Daybreak, become the acting CEO of the company, displacing the well liked Robin Flodin.

Enad Global 7

This led to an interview with Ji Ham, posted to YouTube, where most of us not only saw him for the first time, but heard his voice for the first time as well… which is a bit odd for somebody who has been CEO of a video game company for six years, but hardly the most unusual thing about the Daybreak era.

So I finally sat down and watched the video.

I haven’t seen much written about the video, and that which I did see dismissed it as a whole lot of nothing.

And, I will attest, if you were expecting some detailed information about the company, its operations, or its games, there wasn’t much to chew on.

That said, the 27 minute video was not completely devoid of information.

Ji Ham’s ascension to the CEO role, which was again stressed as an acting position and that he will not be moving to Stockholm, was attributed to the change in the business model that EG7 is now pursuing.  Having grown through acquisition, the company now has a number of live products generating substantial revenue, meaning a different outlook may have been needed in the leadership position.

There was no mention of Robin Flodin’s interview gaffe, so the party line is apparently this was planned and completely normal.

But, while live games are now part of the mix, the company is still seeking more acquisitions to fill what it sees as holes in its offerings or that would fit well within their portfolio.

I have mentioned in the past that growth through acquisitions is a popular choice for publicly held companies as any asset they buy is always assumed to be worth what they paid for it so there is no hit against margins; writing your own code costs, buying somebody else’s’ code is a wash.

No acquisition targets were mentioned, but I suspect that if you looked at what is missing from their current ecosystem that keeps them from being self-contained you might at least come up with some potential segments.

Which isn’t to say that they are giving up on developing their own titles.  Once again a AAA title was mentioned, but no specifics were given.  However, I think some of us just assume it is going to be a Marvel version of DC Universe Online.  We shall see.

Long time followers of Daybreak will no doubt be amused that Ji Ham said both that communication from the company has been lacking and that titles in their portfolio have not seen much in the way of investment during the Daybreak era, something EG7 would like to rectify.  Whose fault might that be?

I guess at least he didn’t blame it on Smed.

Acknowledging that the Daybreak portfolio was old… most of the titles are over a decade old, with H1Z1 being the young one in the bunch, having only passed the six year mark back in February… one wonders where they might throw some resources.

He did mention two titles specifically when it came to targets for investment, DC Universe Online and Lord of the Rings Online.

DCUO is the most popular title in the Daybreak lineup, claiming more than 400K monthly active users last year and bringing in more total revenue than any of its siblings according to last December’s reveal. (Though EverQuest still beat it for net earnings.)

DCUO has a lot of players on consoles, and was at one time the top earning free to play title on PlayStation, so worth keeping up to date.  One of the investments it needs is to get it onto the latest generation XBox and PlayStation 5 hardware.   Also, it would totally make sense to invest in it if you were going to make a Marvel version of the game.

As for LOTRO, it was singled out because, in his words, it is the only Tolkien online world currently available.  True enough, that statement.  The problem is that I am not sure EG7 has the resources available to make LOTRO into a viable, competitive title fourteen years down the road.  While the world is beautiful in game, character models, responsiveness, and the general interface was poor relative to the standards of the industry in 2007.  While there have been a few graphical upgrades over the years, the UI and the character models are still garbage and all the more so on any monitor over 1920×1080 in resolution.  And that leaves aside the layers of monetization piled onto the game, where every dialog wants to sell you a short cut to get around whatever effort game play asks of you.

There is no financially viable road forward that fixes all of its fundamental issues… and I am not even going to go into garbage mechanics like legendary items, which they’re kind of hand waving a fix for because they can’t get rid of it as the grind is so horrible that it likely leads more players to the cash shop than anything else… when it made maybe $15 million tops last year.

I know, that sounds like a lot of money.  But Tolkien Enterprises gets their cut right off the top I bet, then there are the servers and infrastructure to maintain and keep up to date, and the staff needed to keep things going as they are, and then the amount needed to keep Jason Epstein and Ji Ham in the lifestyles to which they have become accustomed.  And now the whole thing is owned by a public company, so the pressure to earn is even higher.  The time to invest and fix things is when you’re private and can get away with a few quarters of loss without the market calling for your head.

I’ve spent a lot of time with LOTRO and cherish those memories, but the wide appeal of its theme is held back by the raggedly old mechanics of the title.  Such is life.

Not mentioned, much to my surprise, was H1Z1.  Robin Floodin used to bring up H1Z1 every time he spoke about the titles that EG7 held, promising its player base that they were looking to revive the title.  I guess it is the newest title in the bunch and, for a brief stretch, was the flagship battle royale title, a position in managed to squander and is unlikely ever to recover. (NerdSlayer has a new Death of a Game video about H1Z1 that covers all the main fumbles.)

But perhaps Ji Ham, who was the CEO when H1Z1 flailed, flamed out, and ceased to be a force in the market, knows better than most what its value now is.

Anyway, those are the bits that stuck out for me.  There was more in the interview, including a caution on earnings, but I was mostly interested in the product related side of things.  The YouTube page has bookmarks in the description that divide up the whole thing into the various topics discussed.

The next thing we hear from EG7 is likely to be Q3 earning in about a month.

Daybreak Revealed in Enad Global 7 Presentation

As I mentioned yesterday, we did not know much about Daybreak Game Company over its close to six years of existence. It was a privately held firm and was reluctant to be straight with outsiders as to who even owned the company. And before that, when it was SOE, its details were hidden within a giant conglomerate where it was such a small piece of the pie that it did not even get its own line item. So having Daybreak purchased by a small public company, where it will be a large part of the pie and which needs to disclose details to the public means that we're learning more about the company this week than we have known for ages. Roll on Enad Global 7. [caption id="attachment_85430" align="aligncenter" width="600"]
Enad Global 7[/caption]

 Yesterday's press release about the acquisition gave us some fresh information and confirmed things we suspected, like the fact that Daybreak owned Standing Stone Games. But there is more to be seen. Over on their investor relations page you will find a presentation by EG7 about the state of Daybreak and its games that is stunning in its clarity after all these years. It is so meaty that I downloaded it immediately lest it be posted in error and disappear. The presentation starts by introducing EG7's strategy and execution of their plan so far, which is an interesting read showing their acquisition pace up to this point. And then there is the About Daybreak section, which starts with a nicely summarized history of the company. 

[caption id="attachment_85465" align="aligncenter" width="600"]
Page 12 - a Brief History of SOE/Daybreak[/caption] 

 Just enough detail I think. A few side ventures are missing, and there is a whole book to be written about the strange path of H1Z1 over the last five years, but otherwise the basics are laid out. They mention the licensed IPs the company has, as well as the valuable IPs Daybreak has created. [caption id="attachment_85468" align="aligncenter" width="600"]
Page 14 - Valuable home grown IPs[/caption]  

EverQuest has booked about a billion dollars in revenue over its life. Not bad. A lot of games never come close to that number or 21 years of longevity. The H1Z1 notes are a bit sad... inspired actually successful titles. Sad enough that they stop mentioning H1Z1 after that. And I still have a retort to that PlanetSide 2 world record which was a planned event and not any sort of organic player surge. Cool stuff so far. And then we get the real dirt! Actual numbers about earnings and players. 

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Page 15 - Year to Date numbers as of Sep. 30, 2020[/caption] 

There are some surprises there, though not many. We had been told that EverQuest was still pretty strong and it was implied that it was doing better than EverQuest II. But now we know where EQII ranks in the overall lineup, which I guess is ahead of H1Z1, which doesn't even get a mention. And then there is DC Universe Online. Smed, back in the day, told us that it was the top free to play game on the PS4, but I guess it has held on to a solid base of players. But if you want that all in chart form, there is a page for that. 

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Page 16 - Revenue and Earnings compared YTD through Sep. 30 2020[/caption] 

 DC Universe Online has the highest revenues, but when it comes to earnings after expenses EverQuest is out in front. That's the joke. A 21 year old game brings home the bacon. Years ago Michael Zenke had been to SOE and was asking them about why they kept on with EverQuest when you could argue that EverQuest II was a better, or at least more up to date game. He told me that EQ was so cheap to run that it was going to be profitable to keep going for a long, long time. And here we are. That DCUO isn't at the top of the earnings is likely an indication that it remains strongest on the PlayStation, where it has to give Sony a cut of the revenue from the cash shop. The presentation digs into further detail. While the games still attract new players, a majority of the player base has been playing their game of choice for more than three years. On the money front, the average monthly revenue per paying user for 2020 so far looks pretty strong. 

[caption id="attachment_85476" align="aligncenter" width="526"]
Page 17 - ARPPU YTD through Sep. 30, 2020[/caption] 

Some whales out there spending money. Of course, that is just the count among users that pay, and the conversion to paying user is important. 

[caption id="attachment_85478" align="aligncenter" width="549"]
Page 17 - Payer conversion rate - YTD through Sep. 30, 2020[/caption] 

 For EQ and EQII that probably translates largely to subscribers through the All Access program. EQ just beats EQII on revenue because it has a lot more players. Likewise, DCUO has the most players by far, so even at a much smaller conversion rate it makes more money. I think the lesson here is more players is better if you want to survive. The presentation also has some plans for the future. They want to do an upgrade for DCUO to make it look and play better on the new generation of consoles by this time next year. They also want to spruce up LOTRO as they see a possible boon in Amazon's upcoming Lord of the Rings TV series. There is even an unannounced new project. Maybe it is related to the Marvel IP license Daybreak apparently holds. The plans and view of the combined company are something as well. As far as revenue goes, EG7 buying Daybreak pretty much doubles the size of the company in staff and revenue. 

 [caption id="attachment_85486" align="aligncenter" width="596"]
Page 27 - YTD revenue for EG7 groups[/caption] 

That is a big bite. Daybreak's ongoing success will very much influence EG7's success. They aren't buying the company to neglect it. While the era of the Jason Epstein Daybreak will end on December 31st, Daybreak will continue to exist as an entity withing EG7. Within the corporate structure the Daybreak stuff will have its own area. 

[caption id="attachment_85482" align="aligncenter" width="586"]
Page 28 - The Daybreak Structure[/caption] 

I am curious as to whether or not that was the actual structure within Daybreak today simply being grafted on to the EG7 tree. I know Jen Chan let slip at one point about working with the SSG team on some things. As for why keep that structure, that is certainly the best plan for the short term. When you have an asset that needs to keep performing you do not introduce chaos as your first step in integrating. Things will likely change over time. Daybreak itself will likely remain a legal entity for a long time. Having been through many mergers and acquisitions over the last 30 years... on average that has happened in a way that involved me directly about every three years over that time... there are a lot of reasons to not simply dissolve a corporate entity. There are a lot of contracts and agreements made in the name of that company that have to be transferred over time, and the other side of the agreement doesn't care about the change. So you wait until a contract comes up for renewal and then you transfer it to the new owning company. That can easily take a decade to work itself out. And Daybreak, for all its foibles over the last six years, remains the unifying identity for the teams under it. That is who they are in the EG7 ecosystem. 

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Page 24 - EG7's world wide organization[/caption] 

That big owlbear eye that is the Daybreak logo will be looking out at us for a while longer. Related posts:

• MMO Fallout - Fun Fact: Daybreak has a Marvel License
• Massively OP - Studio Heads Reassure Players about Daybreak Sale
• Massively OP - Everything we just learned about Daybreak thanks to EG7

DC Universe Online comes to the Switch

Alternate headline: Daybreak ports 8 year old game to Nintendo platform

It is always nice to see some proof of life from Daybreak now and then, and here we have something of a big item with the team in San Diego supporting another platform.

And so, today, DC Universe Online is available on the Nintendo Switch.

I even made a special graphic just for this

So why do I care?  My own relationship with the game was brief at best and, as the alternate headline above (which was the first headline I considered), I am not above a bit of cynicism when it comes to Daybreak.

Also, I don’t own a Switch.  That too would seem to limit my interest.

As I said, proof of life and expanding the business seems to be a good sign these days with Daybreak.

To start with, given that Daybreak probably has fewer people on its overall payroll than Blizzard has just working on World of Warcraft, porting a long running MMORPG to a new platform is fairly impressive.

Granted, the game was designed up front with consoles in mind, as the control scheme clearly demonstrates. (A minor factor in my decision to stop playing the game shortly after its launch.)  That means that there was groundwork laid to help support new consoles in a way that some of their older games lack. (No console controller save one with a full keyboard could support EverQuest.)  Still, supporting the game across Windows, PlayStation 4, XBox One, and now the Switch is a decent feat.

It is apparently more than EA can manage for most of its titles..

But further, the move to the Switch also sounds like something of a success story, that Daybreak is doing something right.  You do have to assume that the company isn’t simply throwing good money after bad (see Turbine and Infinite Crisis, also a DC Comics based title), but the fact that DCUO was the top revenue free to play game on the combined PS3/PS4 platforms about five years back gives one hope that the game remains viable.  While I have heard via back channels that DCUO remains profitable, it is nice to see something that looks like a confirmation that it remains a viable product.

Of course, this also helps feed the rumor mill about a possible break up of Daybreak.  When word of this first started to spread, I assumed that DCUO would necessarily be lumped in with the other non-EverQuest games largely due to it being on consoles.  Why would a the Norrath team want that in their house?

But now, with Golden Age Studios also on the list of trademarks and Twitter accounts, as well as DCUO expanding on its own to a new platform, perhaps it will be going its own way, leaving behind both the Norrath and the PlanetSide teams.

Or maybe none of that will come to pass.  We will have to wait and see.

Daybreak 30 Months In

30 months seems like a nice round number for a review.

I was thinking about Daybreak over the weekend.  It has been about two and a half years now since they ceased to be SOE and began living the “indie” lifestyle as Daybreak.  Freed from the shackles of their PlayStation overlords there was the promise of being able to do new things… mostly on XBox.

First though, they had to clean house.  That started with staff cuts.  They cut games, Dragon’s Prophet, PlanetSide, and Legends of Norrath, though they had already cut some games as SOE to get ready for the deal.  Then they killed off the long suffering EverQuest Next project and released Landmark, only to close it down less than a year later.  That left them with a tidy array of games.

Daybreak Lineup – Fall 2017

DC Universe Online

Profitable on PlayStation, DCUO was the beneficiary of the whole “we can develop for XBox!” plan, getting an XBox One client last year along with the promise of being able to play on servers with Windows players.  I can’t recall if that ever happened.  The game does get regular content updates and likely continues to be profitable.

EverQuest and EverQuest II

The foundation of the company.  I remain of the opinion I expressed on a podcast a year and and a half ago, that these two titles are in the strongest place they have been in a long time.  Both games get yearly content expansion and regular updates and Daybreak has continued to successfully play the nostalgia card with both titles, rolling out fresh servers focused on old content.  Those are consistently the most popular servers though even I, a big fan of the idea, wonder how long these titles can live largely on that sort of thing.

H1Z1 – King of the Kill

The surprise break-out battle royale aspect of the H1Z1 saga, it still hasn’t managed to exit Early Access despite Daybreak’s parent company considering the game launched 30 months ago.  And there is a question as to how long its reign of success will last now that PlayerUnknown’s Battleground is now the darling of battle royale titles and Twitch streamers.  You cannot live on selling $5 in-game hoodies when a new game is stealing your audience.

Yeah, who owns Battle Royale now?

Having to differentiate yourself from your new competitor… which has sold 10 million units already… is never a good sign.  Meanwhile, the promised ports to PlayStation and XBox have never materialized.

Just Survive

The aptly named twin of King of the Kill and once the main focus of the plan.  Then the battle royale idea proved more popular, the game was split into two titles, with Just Survive mostly neglected for the next year and a half.  The biggest announcement during that time was that Daybreak was removing the “H1Z1” prefix from the title.  That came with the promise of a big revamp, but I don’t know if that will be enough to undue the damage from the time of neglect, which has left a recent legacy of “mostly negative” reviews for the game.

PlanetSide 2

The successor to PlanetSide and Smed’s favored child, it is hard to gauge how well it is doing in the post-Smed era.  It continues to get balance changes and updates.  On the other hand, almost two years back the Daybreak was saying that the title was having problems on the revenue generation front.  When you’re giving it away for free and not charging to play the core of the game, people will take advantage of that, a business model that remains the same today.  Has this gotten any better?

Something New?

The above is just the way things go with titles that are on the market and have to survive over time.  Some days you eat the bear, some days the bear eats you.

What differentiates a going concern from a company just riding out its end days and milking its current titles is ongoing development of new games.  And I haven’t seen any of that from Daybreak.  Moving one five year old title to XBox was nice, but hardly a substitute for new work.

All six titles in the Daybreak lineup come from the SOE era.  H1Z1 might have gone into early access shortly after the Daybreak deal, but it was announced and work was in progress well before then.

The only thing new under the sun for Daybreak has been a deal with Standing Stone Games to handle some aspect of LOTRO and DDO operations.  But that is hardly a substitute for new work, especially since SSG is a company clearly riding out its own end game scenario.  No matter how much money Daybreak is getting from that deal, it clearly has an expiration date.

So is this what the Daybreak experience is going to be?  A long ride into the sunset shepherding an ever dwindling stable to titles onward until the last one drops?

Friday Bullet Points from Beyond the Blog

Or just some tidbits I want to bring up but which don’t quite justify a full post.

Nintendo and More Nostalgia Validation

As part of the 20th anniversary of Pokemon, Nintendo released Virtual Console version of the original Pokemon Red, Blue, & Yellow on February 27th of this year.

Old games come to the Virtual Console

They just reported some sales numbers, which included more 1.5 million copies of those three titles.  Not bad for 20 year old games.  Of course, as I noted, vanilla Pokemon, if you will, plays pretty well.

EverQuest II hits Game Update 100

I can’t recall if EQII has gone through every number, 1-99, with updates, but still, hitting 100 is something of note.  And this update has a bit of a nostalgia twist to it.  While I’m not exactly thrilled about the owl mounts, the re-use of Zek, the orcish wastes zone for additional content has me happy.  It has always been one of my favorites among the original zones, probably for its consistent/coherent “orcs, orcs, orcs” theme.

I won’t be playing it however.  For openers, I think my highest level characters are still in Kunark… which is late 2007 content.  And then there is the fact that I am still pottering around on the Stormhold nostalgia server, where I am level 22.

Nostalgia on Wayne!  Often the theme of this blog.

However, Stormhold still seems to be lively enough.  There aren’t five versions of The Commonlands running any more, but Freeport always has a couple versions running due to population.  Still, it is nostalgia one way or the other.  That seems to be a theme of late.

Blizzard Might Give You a Free Copy of Warlords of Draenor

Way back after Blizz announced the Warlords of Draenor expansion, I had a post about phishing attempt offering a free version of the expansion.  One of the key tells was Blizz giving you a free copy of… well… anything.

Of course, things change.  As Keen reports, Blizz now has an offer out to long lapsed subscribers offering them some free game time as well as a FREE copy of Warlords of Draenor.

Nostalgic old WoW logo, image swiped from Keen and cropped

Blizz must be staring at the reality of a long spring/summer until WoW Legion hits.  They stopped announcing subscription numbers last year, but it would be hard to imagine they have gone up from 5.5 million in the last six months.

Of course, this offer has only gone out to people who didn’t purchase Warlords of Draenor, which is making me think about my pre-order of WoW Legion.  Given that my post-Cataclysm experiences in WoW have generally been best when I am late to the expansion party… being a year late to Mists of Panderia was excellent timing… I am tempt to just cancel my pre-order and wait a year or so until Blizz is ready to give me a free copy of WoW Legion.  Or until they open a retro server.  One or the other.

DC Universe Online and on XBox One

Well, the first title for the company formerly known as SOE has made it to the XBox.  As promised earlier this year, the five year old DC Universe Online has gone live on the Microsoft console platform.

XBox One! Would you like to know more?

Back during the Daybreak transition, this was one of Smed’s selling points, the ability to get titles on to XBox.  We shall see if it was worth the effort.  But at least they made their “Spring 2016” target.  Making dates is generally a good sign.

Diablo III Season 6 Starts Tonight

Just a passing note on this.  I had a lot of fun with Diablo III and Season 5… right up until the moment I got that last achievement and stopped logging in.  Goal driven much?  Still, the Season thing seems to work well, especially for those of us who are goal drive.  And here comes Season 6.

It has a 6 on a leaf, because leaves are seasons or something

However I am not sure at this point if Season 6 is in the cards for me.  I might need to skip a season to keep it fresh.  I would want to play a fresh character again, but not another crusader, so I would have to figure that out.  And I would have to see if the rewards appeal to me at all.

EVE Vegas is Coming

One of the final announcement at EVE Fanfest this past weekend was the date for EVE Vegas this year, which has sort of become the US EVE Fanfest.   The official EVE Vegas site has all the details.

The would be Halloween weekend

Tickets went on sale while players were still in Iceland and the early bird discount tickets were gone in a flash.  I am tempted to go.  I had a good time last year.  However, Halloween weekend seems like an awkward time to plan such an event.  It will definitely not be an “off” weekend for the strip, which means prices for everything will be up and venues will be crowded.  Not a problem for the party animals I am sure, but for a grumpy old guy who prefers discussion groups with maybe four or five people, this might not be the ideal date.  Anyway, tickets are going fast so my decision to go or not might be made for me.

Anyway, those are all the items that I had on my list of notes.  Tomorrow there will be an end of month post and then we will be in May.