Daybreak president John Smedley talks H1Z1 and leaving Sony

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Last week, H1Z1 developer Daybreak Game Company, the studio formerly known as Sony Online Entertainment, revealed its new logo and branding—three months after being purchased by private equity firm Columbus Nova. We got a chance to speak with Daybreak president John Smedley about the new owners, what the shift means for their games, and what separating from Sony does for them.

PC Gamer: With the launch of H1Z1, there was a hugely negative reaction on day one which quickly quieted down. What do you think caused that reaction and what would you do differently if you could go back?

John Smedley

John Smedley

John Smedley: There was really only one thing, and ironically that one thing was something that we had not only telegraphed since August of last year but were explicitly talking openly about in every interview we did, which was airdrops. I think we miscalculated where we thought the line was for pay-to-win and where our users thought it was. It really was that simple. They told us in no uncertain terms that they thought we crossed the line, and we literally just backed away from it immediately and the launch could not have gone smoother from our perspective. There was just the one day worth of outcry about that, it just happened to be on launch day.

We just backed away from it and it’s been smooth sailing ever since, relatively speaking. We always manage to do stuff and then it pisses them off, but you’ve got to try things. Look at the Valve mod payment thing, for example; it’s a great example of—of course they’re smart for doing that. Modders getting paid is an awesome idea and I wish they’d stick to their guns, but sometimes you think you have a solid plan and it gets in front of the players and they’re like, “Yeah, we don’t like this,” so it changes. From our perspective, being able to listen and actually change the course of what we’re doing in reaction to the people that pay the bills—our players—that’s a positive as far as we’re concerned.

The reality is, I like dealing with companies that listen to their players. I’m proud to say we’re one of those companies. I think we do a good job of that, but sometimes you put ideas out and they don’t work. We’re not going to change that, we’ll still try it.

What is Columbus Nova’s plan for Daybreak and intentions with owning a game company?

JS: That’s kind of what’s funny. If you look at this from the perspective of the internet, they see private equity guys and they don’t know what that means. They just know, “Oh, it must be bad.” How this really works is they own the company—although the employees will be owning part of it as well, which is also new to us and very good—but if they own the company, they would not have bought it if they did not believe in our future. They’re investing in that, and that’s a far better scenario for us than the one where we were basically stagnating because we were a part of a bigger company. We were just an asterisk, you know? Sony didn’t—it wasn’t that they didn’t believe in us, they supported us for many years, but PC gaming wasn't their main thing. With Columbus Nova, it’s an entirely new story. We have investors that see this as our growth stage and are funding us for that.

Is there still oversight with Columbus in the same way that there would have been with Sony?

JS: It’s a different type of oversight, and here’s an example: headcounts. Under Sony we always had a specific number that we could not go above. Under Columbus Nova it’s about what we need to do the job. So if we need to add additional people—and we are going to be doing that, adding additional people to some of our games—we can just do that. It’s not about managing to a number, it’s about managing the business as a whole.

When you're Sony, everybody walks on water to get you whatever the thing is you want to buy for your company. You're Sony. When you're on your own...

Did Colombus Nova approach Sony about purchasing SOE? Or how was the decision made to have SOE separate?

JS: For about the last two years, we’ve been exploring opportunities for what was then SOE to separate from Sony. It all stemmed from some early conversations we had with our management team at Sony, which was always very supportive and very good, but there’s also this realization that if we’re gonna grow, we first needed to take some tough steps—we needed to restructure the company a bit and we were just simply too large for our revenue. But what happened is Sony explored various options and took its time doing it, they wanted to make the right call. And I gotta tell you, you’ve gotta kiss a lot of frogs if you want to meet the princess.

Laura Naviaux, Senior VP of Global Sales & Marketing: Or prince.

JS: Or prince. I’m sorry, I guess it is prince. [laughs] We talked to a lot of different companies and I don’t think we could’ve asked for a better outcome because we got a group of investors that believe in what we’re doing, so we’re excited about that.

So it was actually you guys wanting to separate from Sony rather than Sony wanting to get rid of their games division or something of that nature?

JS: Oh, no, it was nothing even that formal. It was more like—I mean, the very initial conversation happened with them directly. It was like, “Hey look, we’re never going to be able to make the kind of money we can inside the company versus outside.” And Sony needed cash, they’ve been looking to sell off what they call ‘non-core assets’ and a PC gaming company in the middle of the Playstation division is sort of the definition of non-core.

How has Daybreak’s identity changed now that you are fully broken away from Sony and gone through the restructuring that comes with that?

JS: The identity I would say has always been tied up with the people that make the games, so from that perspective it’s the same people. But the freedom to make our own logo—it’s kind of hard to explain how emotional that was for us, but it is very much so. Because we’ve had the Sony name for so long that we just didn’t know anything else, but being able to make our own identity. Now that was awesome. That was a lot of fun.

This past week we’ve been having a celebration week both internally and externally, and internally it kind of reinforced the amount of pride people have in the company and sort of gave us something to rally behind. So the biggest thing that’s changed that this is our company now, not Sony’s anymore, and we’ve taken that feeling to heart and we own it and we love it.

Daybreak Logo

Is there anything you are excited to be able to do now that you aren’t part of Sony?

JS: I’ll give you two answers to that; one is sort of on a higher level as a company we can now do Xbox and mobile. And that also touches personally because I’ve never been able to talk about the fact that I own an Xbox. [laughs] For 16 years, we were a one [platform] company and that’s just part of the gaming ecosystem. So we’re excited to do Xbox and we’re excited to do mobile. Those are things that our game makers wanted to do and just couldn’t, so we’re very excited.

What about the flipside, anything you can’t do anymore?

JS: Yes, ironically. This is the story of things we all run into everyday, but when you’re a big company you don’t think about it, and that is credit. When you’re Sony, everybody walks on water to get you whatever the thing is you want to buy for your company. You’re Sony. When you’re on your own—literally we have American Express cards from Sony sitting in our pockets, and we call American Express and say, “Can we change the name of our company?” and they’re like, “Uh, yeah, if it’s from Sony you’re going to be needing new cards which means you’re going to be needing new credit, because the one you’ve got ain’t good enough.” So we’ve had to face the reality of when we call people now, people sometimes say “Who?” That’s a little different for us and our egos are still getting adjusted to that.

So what does it take to be a large indie studio in 2015 then? You, Obsidian, and Gearbox are the only big ones that come to mind.

JS: Some of that we’re still figuring it out, but we’re figuring it out sort of in a good way. Some examples; our new owners, Columbus Nova, are really excited to invest in the business, and so we’re going to be getting a new company headquarters. We’ve tried to get a new headquarters for five years and have been unsuccessful. Now, they came in and said, “Look, it’s really important that we have a home for you guys that makes you guys happy,” and they decided fund that. So it just couldn’t be better from our perspective.

Tom Marks
Tom is PC Gamer’s Associate Editor. He enjoys platformers, puzzles and puzzle-platformers. He also enjoys talking about PC games, which he now no longer does alone. Tune in every Wednesday at 1pm Pacific on to see Tom host The PC Gamer Show.