The United States imposed another round of sanctions on Russian oligarchs in early April in retaliation for alleged meddling in the 2016 US presidential election. Viktor Vekselberg and his more than $1.5 billion in assets are one of the sanctions' targets. Vekselberg is the owner and president of Renova group, a Russian investment firm connected to a broad range of industries, including mining, manufacturing, and technology.
That might be bad news for Daybreak Game Company, the company behind Everquest and H1Z1, formerly Sony Online Entertainment (SOE).
As first reported by Massivelyop (MOP), a site dedicated to reporting on massively multiplayer role-playing games, Renova is the parent company of Columbus Nova, which is allegedly part owner of Daybreak. In a strange twist, and despite a mountain of evidence, Daybreak has denied any connection to the Russian-backed company.
Daybreak has good reason to distance itself from Columbus Nova. “You have to cut all ties,” William Courtney, a Russian diplomacy expert and adjunct senior fellow with the RAND Corporation, told me over the phone. “You can’t have any dealings with [sanctioned companies]whatsoever…if they want to continue to do business in the United States.”
The US Department of the Treasury has given American companies until June 5 to cut all ties with people and businesses affected by the new round of sanctions. “If it infringes on the sanctions, then it’s in violation of US law,” Courtney said.
That means any lingering connection to Columbus Nova could leave Daybreak Game Company open to fines, prosecution, and jail time for its leadership. The sanctions have caused tumult in the aluminum industry, for example, as US companies have rapidly backed away from Russian-owned United Company Rusal, a large supplier of aluminum.
To be clear, Renova Group and Columbus Nova have not been tied directly to any alleged Russian hacking of the US election. This recent round of sanctions is broad and targeted oligarchs close to Russian President Vladimir Putin. The US Treasury placed both Vekselberg and Renova on the list. Columbus Nova is Renova’s only American subsidiary and Andrew Intrater, its CEO, donated $250,000 to Trump’s election campaign
But Daybreak thinks none of this is going to be a problem because it's not actually affiliated with Columbus Nova, despite saying as much in the past. The connection to the Russian company started back in 2015, when Sony sold its online gaming studio to what Engadget called, “relatively unknown investment firm called Columbus Nova.” After the sale, SOE became Daybreak Game Company.
“We are excited to join Columbus Nova’s impressive roster of companies,” SOE founder John Smedley said in a press release published on the company’s website in early February 2015. “They have a proven track record in similar and related industries and we are eager to move forward to see how we can push the boundaries of online gaming.”
Daybreak provided the same comment to Motherboard.
Daybreak claims this whole thing was just a confusing mess. “It was current executive chairman Jason Epstein, former senior managing partner of Columbus Nova that acquired Daybreak, not Columbus Nova itself,” a Daybreak rep told MOP. “That distinction was never corrected in the past, so we are correcting that now.”
MOP pointed out that Wikipedia banned a user named Daybreakpr in early April for attempting to make unauthorized edits to Daybreak’s Wikipedia page, that Daybreak has had several former Columbus Nova executives in high positions since 2015, and, according to Columbus Nova’s own website, Epstein is still a managing partner. His Linkedin says he left the company in 2017.
Update: This post has been updated with comment from Daybreak Games.