"The whole situation is a baffler."
Following the shocking mass-resignation of publisher Annapurna Interactive’s entire 25-person staff, a new report from IGN has provided more details about the gaming division’s dispute with its parent company, Annapurna Pictures, and its billionaire owner, Megan Ellison. Anonymous former employees shared concerns about the Interactive division’s future under Annapurna Pictures, and claimed that Ellison refused to continue working with them on an agreement to spin off the division. Spokespeople for the parent company claimed that the division’s leader failed to respond to their efforts to move the process forward.
Megan Ellison: Daughter of Larry Ellison, billionaire owner/founder of tech company Oracle. Founded Annapurna Pictures in 2011, which has produced a number of successful, art house-adjacent films.
Nathan Gary: Former Sony employee, founding member of Annapurna’s gaming-focused Interactive division. President of Annapurna Pictures overall from 2021-2024, was negotiating to spin off Interactive as a more independent company.
Hector Sanchez: Former Sony employee, founding member of Annapurna Interactive. Left the company to work at Epic for a number of years, returned to head up gaming efforts under Annapurna Pictures (not Interactive) like the deal with Remedy on the future of the Control series.
Annapurna Interactive was founded as a gaming-focused subsidiary of Ellison’s Annapurna Pictures in 2016, tapping veteran gaming talent including former Sony employees Nathan Gary and Hector Sanchez. After a run of producing successful films like The Master, Her, and Zero Dark Thirty, Annapurna Pictures began to struggle financially in the late 2010s. The Interactive division, meanwhile, enjoyed continued success with games like Stray, Outer Wilds, and Neon White. Gary was named president of Annapurna Pictures overall in 2021, but a source that spoke to IGN alleged his focus remained on the gaming side of the company.
After having remained hands-off with Annapurna for several years following its late-2010s struggles, IGN reports that Ellison initiated a leadership shakeup in March, with conflicting accounts as to what precisely happened in the Interactive division: Anonymous former members claim that Nathan Gary was fired, while an Annapurna spokesperson says he resigned in response to other staff changes, as well as his effective demotion from being the head of Annapurna overall to once again just leading Annapurna Interactive. At this point, talks began between Gary and Ellison to spin Annapurna Interactive off into a more independent (but still financially tied to Annapurna Pictures) publisher called Verset.
While negotiations moved forward, IGN’s sources were disturbed by some of Ellison’s decisions and changes. Namely, Annapurna rehired founding Interactive executive Hector Sanchez as “president of interactive and new media” within Annapurna Pictures, independent of and arguably in competition with the established Interactive division.
Annapurna Interactive employees say they were blindsided by Annapurna Pictures’ publishing agreement with Remedy on Control 2—a partnership negotiated by Sanchez—with those employees only finding out about the Remedy deal the same day it was publically announced. Annapurna spokespeople argued to IGN that the company always viewed Interactive/Verset as an indie/AA-focused initiative, with Annapurna Pictures moving into the AAA space with Sanchez at the helm.
IGN’s sources from the Interactive division and Annapurna’s spokespeople offer conflicting accounts of the final breakdown of negotiations: Annapurna claims that Nathan Gary failed to respond after the company agreed to the outline of a deal earlier this year: “Any implication Annapurna was backtracking on the deal is false,” a company spokesperson said. “We agreed to high-level deal terms and signed a term sheet in early April, which makes it all the more surprising that we never got a response.”
IGN’s sources dispute that narrative, allege that Ellison refused to negotiate while taking a more direct role in managing Annapurna Interactive in that time, and say that they gave two weeks notice ahead of their September 6 mass-resignation, a notice period Annapurna did not seem to use to either negotiate further, or warn its partner developers of the coming disruption.
While staff from Annapurna Pictures move in to handle the publisher’s outstanding commitments to partner developers, one project has been left in a particularly absurd limbo: The internally-developed Blade Runner 2033: Labyrinth. All of its full-time developers appear to number among the 25 resignations, but Annapurna told IGN that development will continue, presumably under an entirely new team. An Annapurna spokesperson offered the final statement to IGN regarding the resignations:
“The whole situation is a baffler, but now we’re focused on moving forward. We’ve had really great conversations with an overwhelming majority of our existing development teams and are grateful for their partnership. If our inbox is any indication, a ton of developers continue to want to be a part of what we’re building, and we look forward to seeing their pitches. We’ve also had an influx of quality job applicants and are excited to build a team passionate about our mission to tell original stories that aren’t being told elsewhere. P.S. We’re hiring.”
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