MMO maker backtracks on previous statements regarding sale to investment firm.
Enlarge / Daybreak's story on the money behind this logo has been changing recently.
Let's start with the few undisputed facts in this odd tale. Russian oligarch Viktor Vekselberg was placed under sanction by the US Treasury Department
earlier this month for "malign" and "destabilizing activities" in
various international affairs. Vekselberg, whose US assets have been
frozen, is the owner of technology investment group Columbus Nova and its parent company, Renova Group.
What Daybreak now disputes, though, is that Columbus Nova ever had an ownership stake in the MMO maker. "From the get-go, Daybreak has been primarily owned by Jason Epstein, a longtime investor who also has investments in a variety of media properties," the company wrote in a forum post yesterday. "We're well aware of prior statements from Daybreak indicating our company was acquired by Columbus Nova. We have since clarified that the company was acquired by Jason Epstein when he was a partner at Columbus Nova, which he left in 2017."
It's those previous statements—which have stood uncontested for years—that are raising some eyebrows now that the companies are attempting to distance themselves from the investment management firm. Columbus Nova was mentioned a number of times in Daybreak's February 2015 announcement press release, which doesn't mention Epstein at all. Columbus Nova was also cited as Daybreak's parent company in the site's privacy policy from 2015 through at least 2017. Both of those documents have since been taken down from the Daybreak Games website, but the Internet Archive links cited above don't forget.
Outside of those previous firsthand sources, there's also a Polygon feature from April 2015 where Daybreak's then-president and CEO John Smedley directly says that "after kissing a lot of frogs, we finally found a happy home with Columbus Nova. It was really a match made in heaven." Smedley also mentions Columbus Nova's investment in a May VentureBeat interview and in a 2016 Polygon interview.
News reports when Smedley departed the company that July also cited Columbus Nova as the studio's owner, without apparent objection. And Columbus Nova executive Ji Ham was named Daybreak president in 2016, after a 16-month tenure from Smedley's replacement, Russell Shanks.
What's more, a Wikipedia user going by "Daybreakpr" tried to edit the Daybreak Games Wikipedia page on April 6, the same day the Treasury Department announced its sanctions against Vekselberg. "The company has no affiliation to Columbus Nova," Daybreakpr wrote in the Wikipedia edit notes. "Jason Epstein is and has always been the primary owner and executive of Daybreak Game Company." That edit was later reversed for not citing a reliable source and for appearing to come from someone with an "undisclosed financial stake" in the company.
Players of Daybreak games like Everquest II are understandably concerned that the disputed connections between Vekselberg and Daybreak could cause trouble for their favorite titles. Reports suggest Vekselberg's frozen US accounts contain up to $2 billion in assets and that the Treasury Department has given his US investment funds until June 5 to sell off their interest in his companies at a loss and wind down their related operations.
Given that, it's likely only a small matter of time until we find out if Vekselberg's legal and financial problems will become Daybreak's via a disputed business relationship. For now, we'll only say that something doesn't seem to add up.
[Update: A source inside Daybreak Games (who asked not to be named directly) responded to Ars' request for comment to clarify once again that Daybreak was actually purchased in 2015 by Jason Epstein through his wholly-owned LLC, Inception Acquisitions. Epstein was an ownership partner of Columbus Nova at the time, leading his purchase to be conflated with ownership by Columbus Nova itself in statements and reporting, the source explained.
"At the time, they just didn't think that that was a big deal, because both Inception and Columbus Nova were Jason's," said the source, who was not with the company in 2015. "Jason was the primary owner, and he owned both. Saying Columbus Nova as an investment firm seemed to make more sense [at the time]... What they should have said was 'Jason Epstein, owner of Harmonix, purchased Daybreak,' [or] ''Partners of Columbus Nova purchase Daybreak.'"
"We're not denying he was there," the source continued. But when Epstein left Columbus Nova last year, any association between the investment firm and Daybreak (through Epstein) ended, the source said. Daybreak and Columbus Nova let an announcement of that distinction "fall through the cracks" when Epstein departed, focusing instead on getting H1Z1 to a full release, they added.
What's more, the source also said that Vekselberg's Renova Group does not actually own Columbus Nova, despite widespread reporting through the years suggesting they do. Instead, the source said, Columbus Nova merely "managed some accounts," for the Russian conglomerate, adding that those accounts were "not tied to Russia. Renova has other holdings and accounts, and we've gotten roped in."
A 2007 SEC filing from "Columbus Acquisition Corp." cites Columbus Nova as "the U.S.-based affiliate of the Renova Group of companies."]
What Daybreak now disputes, though, is that Columbus Nova ever had an ownership stake in the MMO maker. "From the get-go, Daybreak has been primarily owned by Jason Epstein, a longtime investor who also has investments in a variety of media properties," the company wrote in a forum post yesterday. "We're well aware of prior statements from Daybreak indicating our company was acquired by Columbus Nova. We have since clarified that the company was acquired by Jason Epstein when he was a partner at Columbus Nova, which he left in 2017."
It's those previous statements—which have stood uncontested for years—that are raising some eyebrows now that the companies are attempting to distance themselves from the investment management firm. Columbus Nova was mentioned a number of times in Daybreak's February 2015 announcement press release, which doesn't mention Epstein at all. Columbus Nova was also cited as Daybreak's parent company in the site's privacy policy from 2015 through at least 2017. Both of those documents have since been taken down from the Daybreak Games website, but the Internet Archive links cited above don't forget.
Outside of those previous firsthand sources, there's also a Polygon feature from April 2015 where Daybreak's then-president and CEO John Smedley directly says that "after kissing a lot of frogs, we finally found a happy home with Columbus Nova. It was really a match made in heaven." Smedley also mentions Columbus Nova's investment in a May VentureBeat interview and in a 2016 Polygon interview.
News reports when Smedley departed the company that July also cited Columbus Nova as the studio's owner, without apparent objection. And Columbus Nova executive Ji Ham was named Daybreak president in 2016, after a 16-month tenure from Smedley's replacement, Russell Shanks.
What's more, a Wikipedia user going by "Daybreakpr" tried to edit the Daybreak Games Wikipedia page on April 6, the same day the Treasury Department announced its sanctions against Vekselberg. "The company has no affiliation to Columbus Nova," Daybreakpr wrote in the Wikipedia edit notes. "Jason Epstein is and has always been the primary owner and executive of Daybreak Game Company." That edit was later reversed for not citing a reliable source and for appearing to come from someone with an "undisclosed financial stake" in the company.
Trust us now, not us then
Given all that, it's a bit hard to believe that Daybreak has "no affiliation" with Columbus Nova, as a spokesperson claimed to MMO news site Massively Overpowered this week (Daybreak was not immediately available to respond to a request for comment from Ars Technica). The surprising claim looks even more suspicious given widespread reports of sudden layoffs at Daybreak yesterday afternoon and the departure of Senior Vice President Laura Naviaux on Wednesday.Players of Daybreak games like Everquest II are understandably concerned that the disputed connections between Vekselberg and Daybreak could cause trouble for their favorite titles. Reports suggest Vekselberg's frozen US accounts contain up to $2 billion in assets and that the Treasury Department has given his US investment funds until June 5 to sell off their interest in his companies at a loss and wind down their related operations.
Given that, it's likely only a small matter of time until we find out if Vekselberg's legal and financial problems will become Daybreak's via a disputed business relationship. For now, we'll only say that something doesn't seem to add up.
[Update: A source inside Daybreak Games (who asked not to be named directly) responded to Ars' request for comment to clarify once again that Daybreak was actually purchased in 2015 by Jason Epstein through his wholly-owned LLC, Inception Acquisitions. Epstein was an ownership partner of Columbus Nova at the time, leading his purchase to be conflated with ownership by Columbus Nova itself in statements and reporting, the source explained.
"At the time, they just didn't think that that was a big deal, because both Inception and Columbus Nova were Jason's," said the source, who was not with the company in 2015. "Jason was the primary owner, and he owned both. Saying Columbus Nova as an investment firm seemed to make more sense [at the time]... What they should have said was 'Jason Epstein, owner of Harmonix, purchased Daybreak,' [or] ''Partners of Columbus Nova purchase Daybreak.'"
"We're not denying he was there," the source continued. But when Epstein left Columbus Nova last year, any association between the investment firm and Daybreak (through Epstein) ended, the source said. Daybreak and Columbus Nova let an announcement of that distinction "fall through the cracks" when Epstein departed, focusing instead on getting H1Z1 to a full release, they added.
What's more, the source also said that Vekselberg's Renova Group does not actually own Columbus Nova, despite widespread reporting through the years suggesting they do. Instead, the source said, Columbus Nova merely "managed some accounts," for the Russian conglomerate, adding that those accounts were "not tied to Russia. Renova has other holdings and accounts, and we've gotten roped in."
A 2007 SEC filing from "Columbus Acquisition Corp." cites Columbus Nova as "the U.S.-based affiliate of the Renova Group of companies."]
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