A couple weeks back Enad Global 7 issued their financials for the first quarter of 2024 and I was doing something else… I think I was in Ione, CA that day… anyway, I am finally getting around to mentioning it.

Enad Global 7

Not that there is a lot to mention.  The report straight up says it was a quiet quarter with no major releases and an continued decline in users for Big Blue Bubble’s My Singing Monsters title that saw a huge surge in popularity about 18 months back.

• As expected, Q1 was a “quieter” quarter, reflecting limited planned releases
  • No major product and content releases for the period
  • MSM lower level performance as expected
  • Market weakness pressuring our 3rd party service business units

They didn’t even follow up on the Q4 2023 surprise announcement about the sale of the PlanetSide IP, though we did find out later that the IP somehow ended up with Toadman, another of EG7’s studios, leaving one to wonder what was going on.  No further details have been provided.

So earning were down in Q1 2024.  All that quiet.

The LTM side of the chart are the “last twelve months” totals marked every quarter, which is supposed to more indicative of how the company is doing overall than a strictly quarter focused view… and EG7 is down on that view as well.

Summing up the quarter in the chart they showed who was contributing to the bottom line.

Contributions to revenue by group

As noted above, My Singing Monsters was down, but our friends at Daybreak were chugging along as expected in a quarter with no big releases.

Earnings for Daybreak and Big Blue Bubble

Daybreak was even up a bit in Q1 and has held steady during the rise and decline of My Singing Monsters.  But Daybreak has a few “medium” events in 2024 to keep it going as this chart indicates.

The Plan for 2024… caveats excepted

The only “large” event for the year is MechWarrior 5: Clans.

As part of this quiet quarter EG7 took a moment to remind people that things are bad all over in  the video game market, but they are sticking to their goad of 3 Billion SEK in earnings in 2026, with that growth kicking in any minute now.

The promised future

We’ll see how that shakes out with the Q2 results.

But next up, on June 7th, is the first dividend payment, the reaction to capital management investors demanding that EG7 not hold cash reserves when they could be just handing that money to shareholders.  EG7 is taking a cautious approach to that, but the shareholder meeting coming up on June 19th will no doubt be a sounding as to whether to voracious maw of Wall Street is momentarily sated or if they will demand more.

Also, I missed when EG7 released their final 2023 company report.  That is worth a glance and I linked it at the end of the post along with all the usual suspects.  I did pull a couple of charts out just because I thought they were interesting.

The first is the staffing levels of the various units that are part of EG7, totaling up to 736 people.

Where the staff are at EG7

The Daybreak total at the end of 2023 was 264 people (about as many as I hear work on World of Warcraft these days) or about 36% of EG7’s total, broken out into the following groups:

• Daybreak – Standing Stone (LOTRO/DDO) – 60
• Daybreak – Developer & Publisher – 59
• Daybreak – Darkpaw (EQ/EQII) – 53
• Daybreak – Dimensional Ink (DCUO) – 49
• Daybreak – Rogue Planet (PlanetSide 2) – 27
• Daybreak – Magic Online – 16

And then there was a chart about some random demographic metrics for the company which they decided to report on.

Accident free in 2023

Cyber attacks were down, as were reported sick days.  I imagine those sick days were all reported in Europe where they require those sorts of benefits by law.  Meanwhile, female staff declined in a number of groups… though the seem to be sneaking in a new female member of the board as according to the report she was only elevated in 2024.  Details.

Anyway, EG7 made the “slow quarter” excuse, which you can do once in a while.  Now to see if they can light a fire under Q2.  If they don’t the capital management investors may start howling again for the company to be parted out and sold again.

Related:

• EG7 – Investor Relations Page
• EG7 – Q1 2024 Interim Report
• EG7 – Q1 2024 Investor Presentation
• EG7 – 2023 Annual Report
• Simply Wall St – There’s A Lot To Like About EG7’s Upcoming Dividend
• Massively OP – EG7 Q1 2024: Daybreak still mum on PlanetSide 2, new H1Z1 game hires lead designer
• Massively OP – EG7’s 2023 annual report claims Daybreak and SSG collectively count 264 staffers

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

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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