On Tuesday Enad Global 7 released their Q4 2023 and overall 2023 financial results.  You can find the documents over on the investor relations site which I have linked at the bottom of the post.  These things always get tagged as “interim” or the like, but if they change anything they are going to have to do a filing and publicly announce it.

Enad Global 7

The overall message was something like, “We did okay, but things are tough all over.”  While they didn’t explicitly call out the pandemic income bubble, they talked about pain in the industry, the massive amount of layoffs, and the “irrational exuberence” of thinking the good times would continue to ramp up. (I am sure Alan Greenspan regrets that phrase to this day.)

While EG7 did better in 2023 than in 2022, that was largely carried by the sudden, surprise popularity of My Singing Monsters, which started in Q4 of 2022, but which has been tapering off every quarter since then.  So EG7’s forecast for 2024 is a decline in revenue.

EG7 Q4 2023 – Medium to Long-term Outlook

I am not sure what they base their 2026 forecast on, but clearly they are hoping they’ll turn out something big in 2025.  All they have on their plate is Mechwarrior and the revamp of H1Z1: Just Survive so far, leaving aside the usual round of expansions.  They are either hopelessly optimistic or have something else up their sleeve they’re not yet sharing, because they aren’t going to magic their way… gathering or otherwise… more than a 50% boost in revenues on that.

Meanwhile, looking at the revenue for the last five quarters and the cumulative revenue for the trailing twelve months, that Q4 2023 was not a winner for the company.

EG7 Q4 2024 – Revenue and Earnings

This is particularly grim when you consider that Q4 encompases the holidays, which is traditionally a peak quarter for video games AND when Daybreak launched expansions for EQ, EQII, and LOTRO in Q4, plus updates for its other titles, and the company was still down to its lowest ebb in a year.

That is why they have a grim outlook for 2024.  You can see how the two biggest games group in the company did in 2023.

EG7 Q4 2023 – Game Division Revenues

Daybreak was actually up in revenue slightly… again, not good enough for a quarter with expansions where things should be up a lot more… but was down on net earnings.  But it is Big Blue Bubble… very much a deflating bubble… and the falloff of My Singing Monsters that was dragging down the overall numbers from the games side of the house.  The whole reason that the company was even up in 2023 was the MSM spike, so as it falls the company overall declines, and there is nothing likely to replace it as a pillar of earnings.

One item that piqued interest all over was a bland comment in the interim report that said:

Daybreak successfully closed on the sale of a non-core IP for USD 5.9 million. The transaction provides EG7 with further improvement to its liquidity. This transaction will not affect EG7´s business plan and performance other than the P&L effect from the asset sale.

That led to a bunch of questions.  It turned out that the company sold off the PlanetSide IP, though what that actually means for the current PlanetSide 2 title, which is on PC, PlayStation 4, and XBox, is unclear.  It is also not clear who really bought the IP.  The copyright was transferred from Daybreak to Bay Tree Tower Limited on the 24th of last month, so there is some speculation that maybe the private equity firm Bay Tower bought it.  But there is no word on what the plan is.

I am a bit mixed on this sale.  The PlanetSide franchise was always Smed’s darling, propped up by his enthusiasm, but was always low on the revenue list, as EG7’s chart from last year points out.

Daybreak monthly gross revenue by title

Back in 2015 the creative director on the project described PlanetSide 2 as “really struggling” in a Reddit AMA, so I suppose it isn’t the biggest surprise that it was on the list to be cut.  The question is, “what happens next?”  There has been no word so far on what it means to the current title or the Rogue Planet studio within Daybreak that develops the game.

Not covered in the report or presentation were the recent layoffs, though EG7 reported that the total of those let go was “less than 15” from the EverQuest, Dungeons & Dragons Online, DC Universe Online, and Lord of the Rings Online teams.  So call it between 4 and 14 people laid off I guess?  Why say “less than 15” if it isn’t 14?  I don’t know.  Nobody from PlanetSide 2 was on the list I guess, but given the previous paragraph, I’m not even sure that they work for EG7 any more.

Also not addressed were the “major shareholder” demands I mentioned in Sunday’s post, though the presentation was likely already done and legally vetted before then, so wasn’t going to change.

It was clearly stated that EG7 will begin to execute on its shareholder value plan, where by 50% of net profits will be earmarked for dividends or stock buy backs.

Finally, Ji Ham’s acting career continues at EG7, where he remains acting CEO

And there we go.  Now to see what happens to EG7 in 2024 as their winter of major shareholder discontent grows.  Will they sell off anything else to keep the wolves of Wall Street at bay?  Or will they start shopping the company around as has been demanded?  And if they do, who would buy it?

Related

• EG7 – Investor Relations Page
• Massively OP – EG7 Q4 2023
• Massively OP – Daybreak sold PlanetSide for $5.9M
• Game Whisperer – PlanetSide IP sold to Shell Corporation
• Inventory Full – Games for Sale
• Massively OP – Daybreak’s DC Universe Online studio Dimensional Ink hit with layoffs
• Gaming Idustry.biz – Daybreak confirms “less than 15” layoffs

On Tuesday Enad Global 7 released their Q4 2023 and overall 2023 financial results.  You can find the documents over on the investor relations site which I have linked at the bottom of the post.  These things always get tagged as “interim” or the like, but if they change anything they are going to have to do a filing and publicly announce it.

Enad Global 7

The overall message was something like, “We did okay, but things are tough all over.”  While they didn’t explicitly call out the pandemic income bubble, they talked about pain in the industry, the massive amount of layoffs, and the “irrational exuberence” of thinking the good times would continue to ramp up. (I am sure Alan Greenspan regrets that phrase to this day.)

While EG7 did better in 2023 than in 2022, that was largely carried by the sudden, surprise popularity of My Singing Monsters, which started in Q4 of 2022, but which has been tapering off every quarter since then.  So EG7’s forecast for 2024 is a decline in revenue.

EG7 Q4 2023 – Medium to Long-term Outlook

I am not sure what they base their 2026 forecast on, but clearly they are hoping they’ll turn out something big in 2025.  All they have on their plate is Mechwarrior and the revamp of H1Z1: Just Survive so far, leaving aside the usual round of expansions.  They are either hopelessly optimistic or have something else up their sleeve they’re not yet sharing, because they aren’t going to magic their way… gathering or otherwise… more than a 50% boost in revenues on that.

Meanwhile, looking at the revenue for the last five quarters and the cumulative revenue for the trailing twelve months, that Q4 2023 was not a winner for the company.

EG7 Q4 2024 – Revenue and Earnings

This is particularly grim when you consider that Q4 encompases the holidays, which is traditionally a peak quarter for video games AND when Daybreak launched expansions for EQ, EQII, and LOTRO in Q4, plus updates for its other titles, and the company was still down to its lowest ebb in a year.

That is why they have a grim outlook for 2024.  You can see how the two biggest games group in the company did in 2023.

EG7 Q4 2023 – Game Division Revenues

Daybreak was actually up in revenue slightly… again, not good enough for a quarter with expansions where things should be up a lot more… but was down on net earnings.  But it is Big Blue Bubble… very much a deflating bubble… and the falloff of My Singing Monsters that was dragging down the overall numbers from the games side of the house.  The whole reason that the company was even up in 2023 was the MSM spike, so as it falls the company overall declines, and there is nothing likely to replace it as a pillar of earnings.

One item that piqued interest all over was a bland comment in the interim report that said:

Daybreak successfully closed on the sale of a non-core IP for USD 5.9 million. The transaction provides EG7 with further improvement to its liquidity. This transaction will not affect EG7´s business plan and performance other than the P&L effect from the asset sale.

That led to a bunch of questions.  It turned out that the company sold off the PlanetSide IP, though what that actually means for the current PlanetSide 2 title, which is on PC, PlayStation 4, and XBox, is unclear.  It is also not clear who really bought the IP.  The copyright was transferred from Daybreak to Bay Tree Tower Limited on the 24th of last month, so there is some speculation that maybe the private equity firm Bay Tower bought it.  But there is no word on what the plan is.

I am a bit mixed on this sale.  The PlanetSide franchise was always Smed’s darling, propped up by his enthusiasm, but was always low on the revenue list, as EG7’s chart from last year points out.

Daybreak monthly gross revenue by title

Back in 2015 the creative director on the project described PlanetSide 2 as “really struggling” in a Reddit AMA, so I suppose it isn’t the biggest surprise that it was on the list to be cut.  The question is, “what happens next?”  There has been no word so far on what it means to the current title or the Rogue Planet studio within Daybreak that develops the game.

Not covered in the report or presentation were the recent layoffs, though EG7 reported that the total of those let go was “less than 15” from the EverQuest, Dungeons & Dragons Online, DC Universe Online, and Lord of the Rings Online teams.  So call it between 4 and 14 people laid off I guess?  Why say “less than 15” if it isn’t 14?  I don’t know.  Nobody from PlanetSide 2 was on the list I guess, but given the previous paragraph, I’m not even sure that they work for EG7 any more.

Also not addressed were the “major shareholder” demands I mentioned in Sunday’s post, though the presentation was likely already done and legally vetted before then, so wasn’t going to change.

It was clearly stated that EG7 will begin to execute on its shareholder value plan, where by 50% of net profits will be earmarked for dividends or stock buy backs.

Finally, Ji Ham’s acting career continues at EG7, where he remains acting CEO

And there we go.  Now to see what happens to EG7 in 2024 as their winter of major shareholder discontent grows.  Will they sell off anything else to keep the wolves of Wall Street at bay?  Or will they start shopping the company around as has been demanded?  And if they do, who would buy it?

Related

• EG7 – Investor Relations Page
• Massively OP – EG7 Q4 2023
• Massively OP – Daybreak sold PlanetSide for $5.9M
• Game Whisperer – PlanetSide IP sold to Shell Corporation
• Inventory Full – Games for Sale
• Massively OP – Daybreak’s DC Universe Online studio Dimensional Ink hit with layoffs
• Gaming Idustry.biz – Daybreak confirms “less than 15” layoffs

On Tuesday Enad Global 7 released their Q4 2023 and overall 2023 financial results.  You can find the documents over on the investor relations site which I have linked at the bottom of the post.  These things always get tagged as “interim” or the like, but if they change anything they are going to have to do a filing and publicly announce it.

Enad Global 7

The overall message was something like, “We did okay, but things are tough all over.”  While they didn’t explicitly call out the pandemic income bubble, they talked about pain in the industry, the massive amount of layoffs, and the “irrational exuberence” of thinking the good times would continue to ramp up. (I am sure Alan Greenspan regrets that phrase to this day.)

While EG7 did better in 2023 than in 2022, that was largely carried by the sudden, surprise popularity of My Singing Monsters, which started in Q4 of 2022, but which has been tapering off every quarter since then.  So EG7’s forecast for 2024 is a decline in revenue.

EG7 Q4 2023 – Medium to Long-term Outlook

I am not sure what they base their 2026 forecast on, but clearly they are hoping they’ll turn out something big in 2025.  All they have on their plate is Mechwarrior and the revamp of H1Z1: Just Survive so far, leaving aside the usual round of expansions.  They are either hopelessly optimistic or have something else up their sleeve they’re not yet sharing, because they aren’t going to magic their way… gathering or otherwise… more than a 50% boost in revenues on that.

Meanwhile, looking at the revenue for the last five quarters and the cumulative revenue for the trailing twelve months, that Q4 2023 was not a winner for the company.

EG7 Q4 2024 – Revenue and Earnings

This is particularly grim when you consider that Q4 encompases the holidays, which is traditionally a peak quarter for video games AND when Daybreak launched expansions for EQ, EQII, and LOTRO in Q4, plus updates for its other titles, and the company was still down to its lowest ebb in a year.

That is why they have a grim outlook for 2024.  You can see how the two biggest games group in the company did in 2023.

EG7 Q4 2023 – Game Division Revenues

Daybreak was actually up in revenue slightly… again, not good enough for a quarter with expansions where things should be up a lot more… but was down on net earnings.  But it is Big Blue Bubble… very much a deflating bubble… and the falloff of My Singing Monsters that was dragging down the overall numbers from the games side of the house.  The whole reason that the company was even up in 2023 was the MSM spike, so as it falls the company overall declines, and there is nothing likely to replace it as a pillar of earnings.

One item that piqued interest all over was a bland comment in the interim report that said:

Daybreak successfully closed on the sale of a non-core IP for USD 5.9 million. The transaction provides EG7 with further improvement to its liquidity. This transaction will not affect EG7´s business plan and performance other than the P&L effect from the asset sale.

That led to a bunch of questions.  It turned out that the company sold off the PlanetSide IP, though what that actually means for the current PlanetSide 2 title, which is on PC, PlayStation 4, and XBox, is unclear.  It is also not clear who really bought the IP.  The copyright was transferred from Daybreak to Bay Tree Tower Limited on the 24th of last month, so there is some speculation that maybe the private equity firm Bay Tower bought it.  But there is no word on what the plan is.

I am a bit mixed on this sale.  The PlanetSide franchise was always Smed’s darling, propped up by his enthusiasm, but was always low on the revenue list, as EG7’s chart from last year points out.

Daybreak monthly gross revenue by title

Back in 2015 the creative director on the project described PlanetSide 2 as “really struggling” in a Reddit AMA, so I suppose it isn’t the biggest surprise that it was on the list to be cut.  The question is, “what happens next?”  There has been no word so far on what it means to the current title or the Rogue Planet studio within Daybreak that develops the game.

Not covered in the report or presentation were the recent layoffs, though EG7 reported that the total of those let go was “less than 15” from the EverQuest, Dungeons & Dragons Online, DC Universe Online, and Lord of the Rings Online teams.  So call it between 4 and 14 people laid off I guess?  Why say “less than 15” if it isn’t 14?  I don’t know.  Nobody from PlanetSide 2 was on the list I guess, but given the previous paragraph, I’m not even sure that they work for EG7 any more.

Also not addressed were the “major shareholder” demands I mentioned in Sunday’s post, though the presentation was likely already done and legally vetted before then, so wasn’t going to change.

It was clearly stated that EG7 will begin to execute on its shareholder value plan, where by 50% of net profits will be earmarked for dividends or stock buy backs.

Finally, Ji Ham’s acting career continues at EG7, where he remains acting CEO

And there we go.  Now to see what happens to EG7 in 2024 as their winter of major shareholder discontent grows.  Will they sell off anything else to keep the wolves of Wall Street at bay?  Or will they start shopping the company around as has been demanded?  And if they do, who would buy it?

Related

• EG7 – Investor Relations Page
• Massively OP – EG7 Q4 2023
• Massively OP – Daybreak sold PlanetSide for $5.9M
• Game Whisperer – PlanetSide IP sold to Shell Corporation
• Inventory Full – Games for Sale
• Massively OP – Daybreak’s DC Universe Online studio Dimensional Ink hit with layoffs
• Gaming Idustry.biz – Daybreak confirms “less than 15” layoffs