SOE Acquired… huh

I wasn’t expecting this when I started my morning browsing of Twitter and Reddit.

My immediate reaction: Spine-chilling fear for the future of the EverQuest franchise.

My second reaction: WTF?

My next reaction: Wait, is this for real? Why? huh?

Being acquired by “Columbus Nova, an investment management firm” means you are a line item on a balance sheet of a company run by people in suits with big offices who want to see their lines on the balance sheet with big black numbers next to them. The care for good games goes away and the care for becoming cash-grabby takes over.

The more I think about it, this is starting to make some sense. SOE was behaving a little odd lately with the F2P model conversion, and the whole early access hype building… yep. This wasn’t a weekend deal. This was coming for a long time.

SOE made and continues to make some of my favorite games. I do not want to see EverQuest turned into a cash grab. I do not want to see SOE, a company with dozens of talented people I really respect, turn into a gPotato or Zynga style studio. I want SOE to make AAA games like they have in the past.  I don’t see that as an option now unless this random investment firm is owned by gamers who want SOE to make amazing games.

For now, we’ll watch this acquisition as we have watched them all in the past. Everyone builds excitement, talks about the future, etc. Slowly but surely the implications are revealed, and eventually there’s a thread on Reddit where some anonymous senior level employee tells all. Hopefully that’s not SOE’s (I mean Daybreak Games?) future.

For now, I’m just going to sit here scratching my head. That’s all I can do.

  • Well Keen, I wish I could bring some better news, but this probably is not good for existing and future games.

    Like you said, investment firms, also known as private equity firms, are in the business of making money. These purchases usually involve large portions of debt to finance the transaction. The goal is to improve performances of the companies and then resell at a later period, usually a couple years, for a tidy profit. Longer they wait, more interest is owed and the existing investments prevent future investments from taking place.

    How are companies improved? Either by cutting costs, launching growth initiatives, or both. I’d be willing to bet my life, any games not profitable or lacking in profit will quickly be sunsetted, with most of those employees let go. New projects will be widdled down to only the most promising. Highly doubt H1Z1, EQNext and Landmark, will all see major investments in development, with EQNext and/or Landmark likely getting cut.

    This is a very dangerous time for EQ and EQ2. If they aren’t making solid profits, I’d hate to say it but they could be closed, or possibly sold off, which might be for the best.

    Like I mentioned before, I cannot imagine a private equity firm willing to spend hundreds of millions on a new aaa MMO, EQNext, with so much risk on the line. That’s my initial take, and please, please don’t buy the corporate bs about more resources, etc. That just insults everyone’s intelligence.

  • EQNext I would imagine is gone. Like JJ Robinson said above… great name by the way… these companies don’t buy things in order to sink money into them. They buy them, trim the operating budgets, and eventually turn a profit by selling it as a whole or in pieces.

    I don’t see anything good coming out of this for us the players, and even less good coming out of this for the people that work there. I would immediately be looking around for new opportunities if I worked there since these things usually result in horrible work environments since everyone is in fear of getting laid off.

  • @JJ Robinson: I completely agree. I think your last line is what has me fearing this acquisition the most: “I cannot imagine a private equity firm willing to spend hundreds of millions on a new aaa MMO, EQNext, with so much risk on the line.”

    @Tristan: I hope man. I look at all these past acquisitions and I can’t think of one that ended well.

    @Nuke: Yep. I just hope for hope’s sake that the firm realizes good games = good money.

  • I am positive within a year EQ and EQ2 will be sold off or shut down.

    Planetside 2 and H1Z1 coming to ps4 and xbox one will be their main goals for sure, as these games on consoles could be huge.

    EQ next may be dead, Landmark may shut down as well.

    But atleast we will still have H1Z1

  • They’ll probably sell off anything prior to 2014, and they have already posted that SOE Live is on a hiatus (aka it’s gone). I’m really afraid for the future of EQ. 🙁

    Leaving Sony makes no sense because it makes it harder to get their games on Playstation. It’s a really weird move. Makes no sense to me.

  • @Keen, I could be wrong about this, but does Sony even own any game developers anymore? Sure they have the platform, but most games are developed by outside companies. SOE was probably the last hold out to a time when hardware manufactures also developed software.

    Sony probably saw the writing on the wall… Existing games in slow or fast decline. New games promising, but requires significant future investment. Sony cut its losses, while allowing them to now focus soley on its console, which has done surprisingly well against the Xbox.

    Let a new company decide if further investments are worth the risk. H1Z1 is out, has paying customers, and has a market not yet dominated by one large player. Makes too much sense to invest in H1Z1 over EQNext. Especially for a firm looking to improve its financial position for another sale in a couple of years.

  • SCEA owns Naughty Dog and a couple of others, I think. Fact check me on that.

    What you say makes sense if I’m a suit working for an investment company. It’s exactly why SOE went this course over the last 6 months. H1Z1 early access shenanigans are a direct result of this plan. EQ will probably be paused or cancelled in favor of more H1Z1 one-and-out console games. Meh. I hope we’re all wrong.

  • I can’t say anything about the intentions of Colombus Nova, never having heard of them before today (Smed’s description of them as “well known” made me chuckle a bit), but can we really be sure that SOE will be any more an item on a balance sheet for them than they were for Sony?

    It seems to me this could more about divestment than about investment. Sony’s really hurting these days.

    Or … since it seems no one else’s thought of the obvious punchline yet:

    Maybe Columbus Nova is really a front for … gasp … North Korea!!!

  • Here’s a quick test, can anyone name a gaming company sold to new ownership where the games actually became better?

    Games are all about the developers, and usually people jump ship following sales to start new companies or join different teams.

  • @JJ Robinson: No, I can’t. That’s why I stated the pattern I observe every time this happens. Everyone builds excitement, talks about the future, etc. Slowly but surely the implications are revealed, and eventually there’s a thread on Reddit where some anonymous senior level employee tells all.

    @Amiya: It all depends on how smart the people are at that investment firm. If they know how to make money with games, they’ll do well. If they are in this purely looking at numbers, we’re in big trouble.

    @Bartillo: I personally feel DICE was better pre-EA.

  • Actually let me rephrase that. The game industry is dead as a whole. I don’t mean we won’t be getting any new games, oh we will, but they will be retreads of every other game out there as it’s been now for a very long time. The MMO genre though is really dead. Are there any decent new MMO’s coming out at all in 2015? I haven’t seen any. Even Blizzard scraped their upcoming MMO and we got Overwatch instead.

    Thank god for P99 and UO;Second Age, at least I have some good MMO’s I can go back to .

  • Keen, you’re sort of missing my point. I don’t think this deal would have happened at all if Sony weren’t thinking of SOE as nothing more than an item on _their_ balance sheet.

    After all, the fiscal year ends in a couple months, and they’ve got to tell their stockholders something. I’d guess someone was looking at projected earnings from H1Z1 and all the rest, didn’t like what they saw, and decided it was time to get what cash they could for the company.

    I also can’t think of any games that have benefited from such a sale. Of course, I wasn’t playing EQ back when SOE acquired Verant, but I gather that game didn’t exactly get better either. (On the other hand, folks back then probably wouldn’t have guessed that EQ would still be around in 2015.)

    I’m not saying anyone should be optimistic. Heavens no! I’m never optimistic about the way big companies treat their products or their customers. And nothing on Columbus Nova’s corporate website makes me think “Hey yeah, these guys are avid gamers!”

    I just think it’s too soon to conclude that Columbus Nova is going to be any worse than Sony was. Heck, for all we know, those H1Z1 early access shenanigans you noticed could well have been done at the behest of some Sony suit, as part of a last-ditch attempt to determine whether SOE could suddenly become a huge cash cow, and so worth hanging on to. (Or, yes, it could have been done to boost SOE’s bottom line in the short term, so the company would look more appealing to buyers.)

  • MMOs are in rough shape these days, for those of us looking for a lot more than just your average quest-driven theme park…

  • You said it, JJ. I had been holding out hopes for The Repopulation …

    … but I just can’t be having with the F2P business model.

  • @Amiya: No I get you, sorry. My comment was scatterbrained. I agree with you. I’m thinking a company like Sony, with at least some history in gaming, might have been a little bit better than firm that really is just a true investment management firm. In the end they all exist to make money. How they go about doing that will matter for the players.

    @Damage: It’s looking grim. No doubt about it. Once life settles down for me here real soon (my gosh only 6 weeks until I’m married… sheesh…) I want to jump back into P99 and UO with you.

    @JJ Robinson: Yet it’s the themepark/freemium/Early-access model that will get companies like these investment management firms interested. I keep thinking back to a statement I read from Mark Jacobs about Warhammer Online and how ultimately it was a financial success. Horrible to think about.

  • Smedley is interested in cash grab monetization schemes?

    Now I’m totally disillusioned with corporate gaming outlets. 😉

  • It’s a bit funny to blame the investment firm for these shenanigans that soe pulled here. Smedley has hardly been the height of honest reliability that he’s being portrayed as.

    I actually see it as a good sign, video game investment is generally seen as a massively losing proposition and so for a company like this to invest shows a bit of confidence that they can do something profitable with this. And being profitable does not necessarily mean nickel and diming, which of they did their due diligence would probably lose them their cash in no time. Investment companies are not automatically evil.

  • I have a bad feeling this is going to effect any agreement SOE had to allow P99 to exist. How cold could an investment firm be towards something like P99 which uses copywritten/trademarked assests.

    Hopefully they won’t notice or care.

  • @Horror The only way I see them shutting down p99, is if they are looking to sell the EQ intellectual property and brand, which is possible. Otherwise, the few hundred people that play p99 are not going to make a big difference, and the PR hit would be noticeable. Not like people on p99 are interested in the live EQ servers anyways.

  • @Damage

    I really agree that decent MMOs are pretty much a relic of the past as things stand. And honestly, I think only one thing will really bring them back in the way that we remember them. And its probably really far away (but possible?)

    Full-Immersion Virtual Reality.

    Think about it. A decent MMORPG with FIVR would basically be LIVING in a D&D setting. I’m pretty sure that would bring the industry back to its roots and allow it to thrive. We just have to wait for FIVR to be developed 🙁

    But it totally will. With how profitable porn is on the internet, there is no way there aren’t mad scientists being backed by billions right now trying to turn it into a “real” experience. I cannot wait….

    …For the MMOs! Jeez!

  • Well Keen I have never seen you post anything about Jagex or Runescape, I haven’t played since 2007 but from what I have heard after they were bought out by an investment group they went from free with an optional $7 a month sub to unlock all content, to one of the most heavily monetized “f2p” games in the industry.

    So yeah. Bad news bears.

    I think I will go cancel my planetside sub, (don’t use it enough to really justify it anyway) and stay the hell away from H1Z1 even harder.

  • I no longer play EQ, but it took up a very large part of my adolescence. I don’t like what this means for it, and it would bring tears to my eyes if it was shut down…

    Perhaps its time to log in once more and take a (hopefully not) final stroll through Norrath.

  • I agree with most commenters above. It’s bad news. They will wring expenses out where they can and sell within 2-5 years. That’s what these firms do. I can’t see original EQ making it through that assault.

    But let’s be serious. EQ Next was already dead. Landmark and PS2 with zombies became their obsession.

    And I predict Smed is gone (not through his own choice) and trying to crowd fund his own game within 12.5 months. Clock starts now. Tick tick.

  • Sony has had unload some under performing companies and real estate that were Tokyo and New York in the last couple of years.
    Despite the PS4 doing quite well for them they have show shareholders that they are still
    making money.

    And found this quote on VentureBeat today from Daybreak Game.
    “Daybreak and Columbus Nova have no plans to end any active games at this time, a spokesperson for the new company told GamesBeat.”

    Underscore the (at this time) part because that is very telling. I suspect that Dragon’s Prophet will be the first to go.
    Smed has headhunters looking for his next gig.

  • Sony is in a rather dire fiancial situation. The last estimate I’ve found is from September 2014 and we’re talking a net loss anticipated of over 2 billions $US for the fiscal year ending 31 marchs 2015. At that time, they were in the process of cutting the workforce by 15%, but that’s clearly not enough as they are bleeding money since 2011. They need to sell assets to get back in the black and it seems SOE was good fit for a buyer. Selling the Hollywood studios might have been difficult, they aren’t doing very good in the mobile phone market (not to mention they had to mark the whole Ericsson acquisition as a loss), I doubt they would have sell Sony Music as it’s probably a good revenue stream to keep. Maybe what they need is to focus on making intermediate hardware parts for other players in the industry. A lot of Japanese companies are selling parts for what would seem to be a direct competitor in America.

    As for the future of SOE/Daybreak, I don’t know. Sure, an investment firm is looking to make a profit, but it could be achieved by different avenues. Restructuring the company and reselling the company is an option, could even be good for the games as a new direction could impose more focus and direction to strentghen the library and put out quality. Could be a case of being okay with a small but steady revenue stream which would means a lot of lower budget games each year with an important risk-aversion bias.

  • That’s the way I see it, maljjin. It could go either way.

    As Keen pointed out, one might think that a company with a history in gaming, like Sony, would be more able than some generic investment company to do right by both developers and players. But it also means that the developers are forced to fly the Sony colors. There’s a downside to that, in that they constantly have to satisfy the Sony suits and shareholders that they’re a plus to the Sony brand. In some cases, they’ll end up making decisions to suit the brand rather than the players.

    On the other hand, as someone pointed out in the comments to the reddit article, there is a possibility that the investment company will just set earnings targets and then get out of the way, letting the devs do what they do best. That would give them the freedom to give the customers what they want, rather than what the powers that be think the players should want. Theoretically, that should be good for business.

    I dunno, that sounds way too optimistic for me, but at this point I suspect I’ve become irremediably jaded. It’ll be interesting to see how this plays out.

  • Buy company, rob rape it pay yourself a shitload, dump it. Thats the way most venture capital make their money. The whole turning companies around is BS for most of them,

  • I am really worried about this. I just got back into playing EQ2 and have been enjoying the new expansion.

    The recent email about the payout for the hack a few years ago has to play a part in this somehow.

  • Here are the facts from a business perspective: For Sony, SOE was worth more to sell than to keep.

    Now that either means Sony was looking to offload SOE or the investment firm went out and contacted Sony and saw investment potential. Which is more likely? I’m betting it was more likely that, as many have said, Sony wanted to offload a potential cost center and liquidate for some cash. The investment firm acquired SOE knowing they could probably turn some short term profit then, if necessary, gut the company and move on. It’s how venture capital works.

    I’m worried that good practices will go out the window and cross-platform ports will run rampant as the team bows to the pressures of the expected earnings.

  • I am not sure what change this will bring.
    Sony is pretty desperate for money as well and that might have been the cause for the change in behavior regarding the F2P, early access hype.

    Maybe some fresh wind is needed.
    Oh and Keen. The moment you mentioned gPotato and Zynga I immediately felt an itch.
    Try to not do that lol.

  • Predictions time: Lets see where to start… EQ Next, scrapped or rushed to a early release missing more than half of the purposed features. (If it is release it will get a lot of praise on the aesthetic and environments mostly fan created.), Landmark, remains in current state with little to no more development with a big “release” to get more money.
    Planetside 2, much of the same more in game micro-transactions with easier pay to win elements introduced. Development halts on all but micro-transaction items and results in a quickly petering out of interest. There will be a media blitz at some point to drum up interest in some DLC expansion and then it will die back again. H1Z1 – already starting to lose alot of interest in the twitch gamers they will ride their early access success for as long as it makes them money. There will be a “restructure” and a reevaluation of whats possible within their development cycle and they will slash a lot of the wishlist items they would like to put into the game. This will outrage the small remaining community who plays regularly and those who remember that they paid for a early access game but haven’t played it in forever. This negative press will lead into their “Release” which will have about half of the once initial development items with a promise to revisit them post launch. They will have some sales but the overall mood will be sour. The investment group will then start selling off its IPs like EQ to third parties for development, this will generate a lot of buzz and result in a new early access game using outdated engines and start the cycle over again.

  • If they sell EQ to a third-party, and said third-party decides to launch a retro/slow, I mean very slow, progression server, then heck who would complain about that!!

  • @JJ Robinson: I would have mixed feelings. On one hand, I’d love to play. On the other hand, I have real desires to see the franchise move forward. I’d be shocked if a smaller company could do it, but maybe in the long run that’s best.

  • @Keen: When I say they are going to sell off EQ I mean, like Sonic style. Prepare to see the gross miss-use of the IPs in the worst possible cash grab ways. (I’m a glass is half full kind of guy.)

  • I have have not given SOE a dime since they screwed up SWG. They have needed a change for years. It can’t get any worse.

  • As a side note to this topic, just saw Landmark passed its one year anniversary, Jan 31, 2014. Yes, I saw this while looking to see if Massively has made its final posting yet…

    So, one year since all the hype and what is there now, barely a cricket can be heard from SOE, err I mean Daybreak, regarding Landmark. Landmark should go down as one of the most over hyped game launches of all time. And yes, I include any “early access” purchased enabled game play as a launch. I’m assuming most people who purchased Landmark feel burned, I sure as heck would.

  • @JJ Robinson: A game that isn’t even released has a 1 year anniversary.

    I was an original backer of Landmark. It sizzles a little.

  • Ya… I definitely agree about Landmark. This whole… issue… just reminds me how sad the state of gaming is at the moment.

    Honestly the only game I can even think of coming out this year that I am looking forward to at the moment is Monster Hunter 4.

  • @Keen LOL, 🙂

    @Drathmar I can relate to your feelings, but look for some games you would not otherwise try. Give Clash of Clans or Boom Beach a shot. I really enjoyed them for a few months, and some of the mobile games Keen has suggested also look fun. Try some indie titles on Steam; heck they are usually available for less than $10. Just wait for games to be reviewed before jumping in. There are good games out there, just not in the classic MMO sense.

  • @JJ Robinson: I tend to look around some on steam, but have not seen much of interest there lately. I think it also has to do with my taste. I want a game with a good story, almost like playing a movie more than a real game. It was one reason I enjoyed Mass Effect (even liked the ending despite getting while people didn’t), and Icewind Dale, Baldurs Gate games, and the older Final Fantasies. It just seems really hard to find quality RPG’s these days. There are a couple here and there (Witcher 2, Divinity Original Sin), but they seem much fewer and farther between.

    Same for strategy games. The last strategy games I really enjoyed were Total War Medieval II and Rise of Nations. I can’t even THINK of a really good strategy game recently. Rome II was very meh, Civ V and Beyond Earth were both fairly mediocre, and I did not really like the combat mechanics in the 2 Endless Games at all. I might just be too picky compared to other gamers as some of those did get good reviews.

    And that is even on top of the MMO market.

  • @Drathmar: Have you tried Wasteland 2 yet? I like Divinity Original Sin, but got stuck in the first town, I think I killed someone I shouldn’t have.

  • @Drathmar
    I’m currently going through a game of The Banner Saga mostly for the story. Game mechanics are fine, but for some reason they bore me over time. I keep going to see how the story will unfold. Game has even an easy mode where injuries don’t carry over to the next fight (well, days). Story is a bit on rails, but interesting nonetheless. I’m playing the PC version, I can’t comment on the quality of the mobile part.

  • @Keen: Yep, that was my game of the year last year, by far. So much fun, and I am actually planning a second playthrough soon.

    But that is what I mean, other than blizzard games and witcher there were not many if any games last year put out by a major developer that I actually enjoyed, and SOE going to an investment firm just kind of underlines the fact that it seems good games are not really produced by the major studios anymore.

  • Yeah, I can get behind that statement. That’s certainly the trend. The smaller studios are indeed making better games than the big houses with myopic ideas of what making games is all about.

  • @Darth: If you don’t mind old-school graphics, Avernum 1 and 2 are amazing in terms of RPG gameplay and story. The story in particular is far better than anything I’ve seen in a game since maybe Baldur’s Gate, and not just because the world it takes place in is so uniquely different (without being different for the sake of different) and detailed.

    I also thought Farcry 4 was pretty good. Not an amazing story (though not terrible either), but it fit the gameplay well and it was a fun-enough shooter in what feels like a virtual world minus other people.

    That said you saying Civ V was meh and not liking Endless Legend for the combat has me a bit worried for you 🙂

  • @Syncaine: I have Avernum 1 and 2, I played them way back when they were the exile series (all 6? I believe there are) and have supported spiderweb ever since cause those are some of my favorite games.

    I did not try Farcry 4, I don’t really like shooters anymore but it might have been good.

    As for Civ V… it seems very bare bones as a 4x strategy game (coming from games like space empires, gal civ, etc). The combat comment was more for Endless Space, I really disliked the whole card mechanic of it. Endless Legend did improve on it, but I just felt like something was missing, at least for me, as far as a 4x game goes.

  • This adds to my fear that the MMO industry is pretty much done. I’ve been hanging on looking for a great virtual world, something like UO2 or SWG2, but with each passing year I lose a little more hope. I’ve about run out.

    Maybe I should just go to a UO or SWG emulator server and stop hoping for anything else.

  • @Morreion: That’s pretty much where most of us have gone. The old guard fans are either stuck waiting for the next few and far between promised games that will rekindle the past or off playing an emulated version of old games.

  • Sadly EQNext was the Only MMO that looked like it might possibly be decent. Now it willlikely be cancelled or rushed or poorly f2p.

  • It is a paradox. We are simultaneously in the decline of corporate gaming products and yet in the Golden Age of indies.

    If you guys can’t find a game to occupy your time you aren’t looking in the right places.

    Of course I am not talking about MMO’s here, but people do talk positively about the various emulators resurrecting games.

    Then there is Shroud of the Avatar; anybody playing in the “early access”? It is currently 25% off on STEAM.

  • Well your first reaction was correct, layoffs at Daybreak including Dave Georgeson, stick a fork in EQN its done.