Report: Annapurna Interactive collapse followed years of infighting by top execs

More details on the alleged circumstances surrounding Annapurna Interactive's staff exodus have emerged.

Bloomberg's newest report corroborates and expands on parts of last week's story about the studio's alleged friction among upper management and broken deals, and offers new details.

Per the report, much of the conflict concerned Nathan Gary (then-president of both Annapurna Interactive and Pictures), Interactive co-founder Megan Ellison, and then-producer Hector Sanchez. Sources told Bloomberg that Gary and Sanchez's clash stemmed from the former (and others) thinking the latter was "cozying up" to Ellison.

Two unnamed female staffers alleged that Sanchez made unwanted advances towards them at the time, which made them uncomfortable. Sources speaking to Bloomberg say Gary then blocked Sanchez from becoming head of Interactive's internship program after learning of the allegations.

Sanchez then departed Annapurna Interactive in 2019 for Epic Games, and in response to these recent claims, a spokesperson for the studio denied allegations of misbehavior. However, they claimed Gary felt "threatened" by Sanchez's relationship with Ellison and intentionally stopped his progress at the company.

Gary led both Interactive and Pictures divisions in 2021

Gary was promoted to lead Annapurna Interactive and Pictures in 2021, and his time leading both was allegedly mixed. The strife between the two divisions reportedly increased as he pushed out several executives, argued with others, and overall tried to morph Pictures' work culture into Interactive's.

During this time, Interactive staff reportedly felt like the division's consistent success made it "pay the bills" for the flagging film and TV side of the company.

Ellison began taking on a larger role at Annapurna Interactive last year, which sources say caused problems within the studio. Bloomberg's report claims that during this time, she was hard to get a hold of, to the point that something that should've taken days of work could then take weeks.

Gary left Annapurna in mid-March 2024 following the sudden departure of fellow co-founder James Masi. The meeting between he and Ellison just before leaving was reportedly hostile.

The circumstances of Gary's departure are also unclear. Sources say Gary told coworkers he had been fired, while Ellison (via representative) claims he chose to leave after being demoted.

The rise... and fizzle of Verset

Gary and Masi eventually returned, along with all staff who had left Annapurna Interactive in solidarity with the pair. It was Ellison's idea to spin the division out into a jointly-owned group called Verset, which would then handle the publisher's already-signed projects, future indie work, and its own separate projects.

Like lnteractive, attempts to get Verset off the ground soon fell apart. Months after a soft beginning of the studio, discussions between its leaders and Ellison reportedly stopped.

Ellison claims Verset never responded to her detailed list of negotiation terms, while Verset says she refused to meet with them in-person.

Sanchez returned around this time, and led to Annapurna Pictures securing a deal to adapt Remedy's Alan Wake and Control franchises for film and TV. As in IGN's report, Bloomberg notes Interactive staff were unaware of this deal until the morning of its announcement.

With the Verset deal scuttled, other options were explored. Ideas allegedly included the team returning to Annapurna Interactive without Gary and reporting to Sanchez, while Verset suggested publishing services on contract.

Ultimately, everything fell through, resulting in the 25-person exodus of staff. Annapurna Interactive is currently hiring and attempting to make good on deals it set with developers before these recent events, while the Verset team has set up a financial fund to help those affected.

At the same time, Bloomberg revealed that Gary is aiming to start a new publisher (as had originally been intended), though nothing solid has come of it yet.

Bloomberg's fuller outline of Annapurna Interactive's leadership struggles can be read here.