New Report Details How Annapurna Interactive Fell Apart
UPDATE 27/09/2024: PSU has received a statement from an Annapurna representative on behalf of Megan Ellison, saying
“This is not the outcome we wanted, but Annapurna has always prioritized creators and we are doing everything possible to support our partners so they can continue to make the games that players love.”
Original Story:
About halfway into September, the news hit the wire that Annapurna Interactive’s entire staff had quit. All 25 employees, including leadership, left the greater company that is Annapurna Pictures, run by Megan Ellison, in what immediately seemed like a surprise falling out.
Recent reports though have unearthed the deeper layers to the resignations, like IGN’s report that revealed how the walkout was in part a result of negotiations breaking down to spin-off the team of Annapurna Interactive into a new company, Verset.
Now, a new report from Bloomberg (who initially reported the walkout) reveals even more to the story, and how the back-and-forth played out between the leadership of Annapurna Interactive and the long histories they have with each other.
Interestingly, the report begins with a story of Nathan Gary, former head of Annapurna Interactive and Annapurna Picutres, hearing from gaming’s Geoff Keighley that Gary’s old colleague Hector Sanchez was eating with Gary’s boss, Ellison.
It was weeks after that conversation, the report claims, that things were really set in motion. The meal that Sanchez and Ellison shared might’ve been the inciting incident that led to this month’s walkout, but this boiling point came after years of stirring.
While Sanchez and Gary were both part of Annapurna Interactive’s foundation, and had previously worked together at PlayStation, their relationship deteriorated over time, according to the report.
This was allegedly due to Sanchez taking credit for the work of others, and two incidents in which he made unwanted advances towards female colleagues that made them both feel “uncomfortable.” Gary was made aware of the incidents, but took no action against Sanchez, however it could be that denying Sanchez a promotion he wanted was Gary’s way of taking action.
However a spokesperson for Annapurna insists that Sanchez simply saw no room for him to grow at the studio, so he left, and that it had nothing to do with the two aforementioned incidents.
It even goes so far as to say that Gary felt threatened by Sanchez due to Sanchez’s close relationship with Ellison, and had refused Sanchez a promotion to protect his own job.
Throughout all this, Annapurna was a company held together by one division, that being the games branch, while the film side in Annapurna Pictures suffered major losses.
Tensions raised as staff on the Interactive side felt like they worked to take care of the troubles and mistakes caused by the film division. Ellison believed the remedy was to have Gary in charge of everything Annapurna, so that he could bring the success the Interactive team had over to the Pictures side.
The two sides only clashed further as Gary butted-heads with executives on the Pictures side, even pushing some out, as he tried to instill the same culture that helped the Interactive team to success.
Even with a critical success in the 2022 animated film Nimona, and Annapurna Interactive’s continued success with major hits like Stray, Ellison didn’t see it as enough.
After a short-spell where she considered selling the company, in 2023 she decided instead to be more hands-on with Annapurna, demanding that staff reported to her and Gary. This reportedly only caused more problems, since Ellison would often hold up project timelines by being hard to reach and the rest of the team not able to move forward without her say.
It’s at this point in the report where we’re back to 2024, and a conversation between Ellison and Gary that ended in Gary being fired – or resigning, if you ask Annapurna.
This next part is particularly interesting, because when the report of the walkout came to light, Ellison was said to have left the negotiating table regarding how the Interactive team (who would then go by Verset) was to be spun-off. But Ellison was also the one who reportedly proposed the spin-off in the first place.
It seems that after proposing the spin-off, Ellison held up negotiations by keeping everything strictly over email, and then went ahead with bringing Sanchez back into the fold, something the rest of the Interactive team wouldn’t discover until it was publicly reported.
Sanchez was the one who, unbeknownst to the Interactive team but on the Annapurna Pictures side, helped bring about the deal with Remedy where Annapurna would finance Control 2 development and in turn be able to create TV and film adaptations of Remedy’s IP.
At this point, the entire Interactive team resigned, following Gary, seemingly because none of them held confidence in working with Sanchez and Ellison further. Now they’re plans are to begin something new from scratch, with Gary at the helm.
To say that it’s a wild story is an understatement. Whatever happens next, this is certainly a turning point for the indie publisher that’ll never be the same again.
Source – [Bloomberg]
