Once Part of Sony, Daybreak Games Looks to Conquer New Worlds

After operating for close to 20 years as part of Sony in San Diego, the creators of EverQuest, DC Universe Online, PlanetSide, and other massively multiplayer online games are starting over with a new identity as the Daybreak Game Company.

“We’ve finally become an independent studio,” Laura Naviaux, Daybreak’s senior vice president of global sales and marketing, told me earlier this week.

The San Diego-based studio has operated as part of Sony’s game division since 1995, and has been known since 1999 as Sony Online Entertainment. While SOE was focused chiefly on developing and publishing games for PCs, being part of Sony meant the only other outlet for the studio’s work was the PlayStation video game console.

“It meant that we could never really be the company we wanted to be,” Daybreak president John Smedley told reporter Dave Tach of Polygon, a Vox Media website that covers the game industry.

Daybreak’s spinout was made possible when Columbus Nova, a New York investment firm that manages about $15 billion in assets, acquired Sony Online Entertainment at the end of 2014. The acquisition was announced on February 2—the price was not disclosed—and the business was renamed Daybreak Game Company. A reorganization soon followed that included 140 layoffs.

Daybreak now has about 250 employees, Naviaux said, including 50 or so at the Daybreak studio in Austin, TX, which is focused on DC Universe Online. 

Over the past 16 years, Sony Online Entertainment has evolved from a traditional game developer and publisher to a multi-platform business focused on the emerging possibilities in massively multiplayer online (MMO) gaming, where the price of admission is usually free. As a spinout, however, Daybreak now faces the challenge of finding new ways to make money online.

Unlike a startup, Naviaux said Daybreak has the advantage of an existing economic structure, with revenue streams from its PlayStation and computer-based games. “Future growth comes from taking these games to new platforms and developing new games,” she said.

A scene from the game PlanetSide (Daybreak Game)
A scene from the game PlanetSide (Daybreak Game)

A key tenet of Daybreak’s new business strategy, Naviaux said, is to cultivate and build the gaming community around each game. Daybreak’s Austin group demonstrated the viability of building a business around a particular gaming community through its support of DC Universe Online. One idea for generating revenue from a particular gaming community is to move earlier into the development cycle by

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.