"On April 6th, the US Department of the Treasury targeted several Russian oligarchs and froze their assets due to "destabilizing activities" by these figures (including suspected interference in the 2016 U.S. election). One of the oligarchs so punished was Viktor Vekselberg who owns the Renova Group conglomerate and its subsidiary, Columbus Nova".
Columbus Nova, of course, is the company that bought Daybreak Games from Sony Online Entertainment three years ago. Or so we thought.
MOP went on to speculate that the freezing of "...between $1.5 and $2 billion assets from Vekselberg" could have a real and dire impact on Daybreak Games Company". Well, you'd think so.
This unnerved me somewhat. I would very much like to carry on playing several DBG titles for a good while yet and anything that threatens their continued good health makes me twitchy.
Rather than sit around chewing my nails I went to Google to see what I could find. I read the details of an ongoing billion dollar lawsuit affecting Columbus Nova that has nothing to do with the current focus of the U.S. Government's concerns. That seemed like a potentially bad thing for DBG in its own right.
I also read some more details of the asset freezing. It seems that while Mr. Vekselberg is partly based in Switzerland as well as in Russia, Columbus Nova itself operates out of New York, under the stewardship of
Mr Vekselberg's cousin, Andrew Intrater, who is a U.S. citizen.
So far so confusing. There's another arm or wing or something called Columbus Nova Technology Partners, also based in the U.S. With a name like that you might think they'd be the section housing DBG but I checked their portfolio and there was no sign of the owlbear's glaring eye.
Eventually, inevitably, I ended up at Wikipedia. The entry on Columbus Nova there is brief but it contains this surprising statement:
"Former Senior Managing Partner Jason Epstein also owns Daybreak Game Company".
Wait, what? He owns it how? Privately? So I looked up Mr Epstein:
"Jason Epstein is an investor and business executive who is the primary owner and executive chairman of Daybreak Game Company, the online gaming company."His LinkedIn entry agrees. At this point I was starting think that maybe "owner" is some kind of technical business term that actually means something other than what you'd think. So I googled that. It isn't.
About then some trouble blew up at Hills with Blackgate and I was defending camps and runing yaks for an hour. After that I went and had my tea.
By the time I got back Massively had updated their original piece a couple of times. The story had ceased to be about the imminent threat to DBG from Russian asset freezing. It had moved on to "who the heck owns this damn company anyway?"
DBG had given MOP a statement that basically confirms what I'd found out for myself but was having a hard time believing. Indeed, it went somewhat further into the Twilight Zone:
“Daybreak Game Company has no affiliation with Columbus Nova. Jason Epstein, former member of Columbus Nova, is and has always been the primary owner and executive chairman of Daybreak Game Company (formerly Sony Online Entertainment) which he acquired from Sony in February 2015.”Not only does Columbus Nova not own DBG - it never did! Jason Epstein, private investor and "angel", owned it outright, all along.
As for the original press release and all the subsequent PR and general chit-chat that mention Columbus Nova in the context of either owning or operating Daybreak Games, to quote MOP quoting DBG, it was all "an error on the part of the company":
“It was current executive chairman Jason Epstein, former senior managing partner of Columbus Nova that acquired Daybreak, not Columbus Nova itself. That distinction was never corrected in the past, so we are correcting that now”Well, good. I'm glad we got that sorted out...it's only been three years. Amazing no-one noticed before, really.
I suspect there may be more to this than we know so far but at the moment I'm mostly feeling relieved that the company is apparently in private ownership. Suddenly, an awful lot of the stuff that's happened - or hasn't - since the SOE sale makes a lot more sense.
As one of two businesses (Harmonix, the other, also being a Gaming company) owned by one rich guy, who may very likely be personally interested in gaming, DBG looks like a very nice asset indeed, whereas I always thought it sat extremely uncomfortably in the portfolio of a multinational investment group with billions of dollars in any number of non-gaming projects.
I'm also feeling quite pleased with myself for finding most of this out for myself before I read it on Massively, although I'm a bit miffed I didn't do it quickly enough to send them the tip and get the credit! Oh well, that's what I have a blog for.
Where we go from here could be interesting to say the least. Perhaps now this is all out in the open we might even get some statements about what course Mr Epstein plans on charting for the future of Daybreak Games. Seeing as how he owns it outright and all...
Then again, maybe not. Steady as she goes!
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Sure makes question any desire I have to devote time on Coirnav server.
ReplyDeleteI'd be very surprised if it ends up having any major repercussions for the running of the games. If they're profitable, which some of them certainly are, they'll move to new ownership if it's expedient. Medium/long term there could be some changes if that does happen but too early to worry about that now.
DeleteI actually work for a business that's been owned by a Russian oligarch (well, billionaire anyway) for the last five years or so and he's in the final stages of selling it to an American hedge fund. He's not been targetted by any sanctions but I think its becoming less attractive for Russians to keep their money and assets in certain Western countries right now.
And what about Chloe's Soft Serve Fruit, the company Jason Epstein helped found with his wife, who is possibly also his best friend? If there isn't Chloe's stuff in the fridge and the Daybreak office I am calling shenanigans!
ReplyDeleteLol! I wanted to work that in somewhere but I was in a hurry!
DeleteAlso, if you go press release hunting, you'll find that they somehow made the EXACT SAME MISTAKE with Harmonix, claiming it had been purchased by Columbus Nova. What are the odds?
ReplyDeletehttps://www.wired.com/2010/12/viacom-sells-harmonix-2/
Well that is interesting. What would be the point of all this, though? Surely there will be public records of the sale? They can change all the social media they like but it's not as though they can re-write the legal transactions that have to be documented somewhere, surely?
DeleteI don't exactly care so long as the outcome is that the servers stay up and I can log in but it seems to be an astonishingly inept way to handle the situation. It's drawing attention to something that no-one even thought about, isn't it?
If they were a publicly held company there would be all sorts of info out there, but an LLC, which is easy mode incorporation for small businesses, not so much. It has to be registered with the state incorporate in and any state they do business in, but the office of the secretary of state for Delaware and California respectively don't give much information on their web sites beyond business address and the service they used to create the LLC.
DeleteThe why question goes both ways, depending on what you believe, it being either "why are they changing their story?" or "why did they say Columbus Nova in the first place way back when?"
And yes, it is bringing more attention to things because they are essentially saying, "We were wrong, twice, many years ago and never corrected either until sanctions were on the table." There are probably some tax implications all around if at some point after the initial purchases and press releases that things were transferred to Mr. Epstein. There is something wrong here. It could be just the usual SOE/Daybreak level of stupid, but now that Russians and sanctions are in the mix they seem reluctant to speak at length.
After reading eq2wire's forum post on this topic it sounds like situations like this are not that uncommon. A corporation buys a company and when there is some trouble shift the ownership to private to avoid the association.
ReplyDeleteIt is ridiculous for them to say or for them to expect any of us to believe that CN never purchased SOE in the first place. Why not just say that they are shifting the ownership to private or something to that extent. There are numerous press releases and sites that have all of this information and DBG is just going to say "Just kidding!"
The EQ2Wire forum thread is depressing. Almost without exception everyone posting there seems to hope the end result is the closure of DBG and EQ2. EQ2Wire was always a dismal read outside of the Feldon's news coverage though.
DeleteThe whole "we were never owned by Columbus Nova" thing and all the pathetic, beyond-amateurish attempts to re-write hisory (literally) seem to be the real problem here. Had they simply said "actually we've been owned by Epstein since November 2017 but we never got around to mentioning it" they would have pretty much been believed, I think. After all, they never mentioned the last two changes of CEO until long after they'd happened. All they have done with this charade is to draw attention to the situation.
I'm hoping that the end result will be another sale of the assets to someone else, whether arranged by the U.S. Govt after a seizure or as part of a Russian disinvestment program. I really don't care who owns the games so long as the servers stay up. I guess if they go down we'll see if anyone can build an EQ2 Emu. A few have tried but I don't think there's been a working one yet. EQ, of course, is already well-served with Emus.
Also, what have Warner Bros. got to say about it, I wonder? DCUO is a profitable operation using their IP, after all. Although, come to think of it, I seem to remember the DCUO license is up for renewal this year...
And now the layoffs have started. About 70 let go so far.
ReplyDeleteAlso rumors starting up about the games being sold on. Intrepid, the studio behind Ashes of Creation, has been suggested and there's been one of those "if we were interested we couldn't say" kind of statements that might mean anything...
DeleteLooks like DBG as it is will go - whether (and which) games will carry on we can only wait to see.