Annapurna Interactive split reportedly caused by staff concerns over company direction

More details have emerged following the mass walkout of Annapurna Interactive’s team last week, with sources telling IGN they were reportedly unaware of the Remedy deal until the day it was announced, and were “confused, concerned, and frustrated” by the direction of the company.

It was already known that the team walked out due to a breakdown in negotiations to spin-off its games division from its parent company Annapurna Pictures. According to IGN, the plan was for a new company called Verset to be created out of Annapurna Interactive, which would become Annapurna’s “indie arm.”

As negotiations were underway, the team reportedly discovered in August that Annapurna Interactive co-founder Hector Sanchez had been “quietly rehired” as president of interactive and new media by Annapurna Pictures CEO Megan Ellison, and was working on “gaming projects without the knowledge of the rest of the Interactive staff.”

Sanchez left Annapurna Interactive in 2019 to join Epic Games as Head of Epic Games Publishing, a position he left in February 2024.

A spokesperson for Annapurna claimed talks between Sanchez and Ellison began earlier this year, before she offered him the role at Pictures where he would “lead efforts in the AAA and AA-gaming space, including transmedia properties.”

This included the deal between Annapurna Pictures and Remedy Entertainment announced in August – a deal that sources say the Interactive team were unaware of until it was announced.

During this time, Annapurna Pictures terminated the discussion to spin off Interactive. The company claimed this was due to Interactive head Nathan Gary’s “lack of response to requests for feedback on legal drafts.”

However, sources told IGN that “they began to see signs of Ellison exercising greater involvement in Annapurna Interactive’s deals, projects, and budgets in a way that began to make them further uncomfortable with the direction of the company,” which culminated in the mass walk out.

Annapurna also clarified the future of games in development, including Blade Runner 2033: Labyrinth. Development will continue despite its game director Chelsea Hash resigning, and many of its development team.

An Annapurna spokesperson said: “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.”

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