Former Blizzard CEO Mike Morhaime starts new game publisherSeptember 23, 2020
Blizzard created one blockbuster franchise after another — “Warcraft,” “Diablo,” “StarCraft,” “Hearthstone,” “Overwatch” — while being passed around by a succession of corporate owners. That’s because Morhaime and his original partner sold the company back in 1994 for $6.75 million. All those years, no one at Blizzard — Morhaime included — owned the games they were working on. (The company is now a division of publicly-traded Activision Blizzard.) He stepped down as Blizzard’s CEO in 2018 and left the company altogether last year.
Now Mike Morhaime is back in the game business. With his wife Amy and a handful of Blizzard veterans, Morhaime has founded a game publisher and developer called Dreamhaven. The new company plans to reveal its existence Wednesday and announce it has created two studios populated by Blizzard veterans — Moonshot Games and Secret Door — that are actively working on new undisclosed game concepts.
With Dreamhaven, Morhaime doesn’t just want to make great entertainment. He’s committed to retaining control of the company this time, but he doesn’t just want to make money. As video games become one of the planet’s most powerful forms of entertainment — culturally and financially — Morhaime wants to demonstrate that games are a force for good.
“We’ve learned a ton about what goes into creating an environment that allows creators to do their best work, and we were very successful doing that for many years at Blizzard,” Morhaime said in an interview on Friday. “We reached a crossroads where we reassessed what we want to do with the rest of our lives. For Amy and I, that meant taking a step back, looking at all the things that we could possibly do and deciding to come back full circle and engage with a team of people that we know and trust and share values with and see if, ‘Hey, with all the experience we have, maybe we can do it even better this time.’”
Befitting its name, Moonshot is focused on large projects while Secret Door is working on more intimate concepts. Neither studio has yet coalesced around a specific project, but it appears that Dreamhaven is focused initially on multiplayer experiences.
All but one of Dreamhaven’s 27 current employees are Blizzard alumni. Some — including Dustin Browder (“Heroes of the Storm,” “StarCraft II”), Jason Chayes (“Hearthstone”), Eric Dodds (“WoW,” “Hearthstone”), Chris Sigaty (“Warcraft III,” “StarCraft II”) and Ben Thompson (“Hearthstone”) — are familiar to gamers; others are known in the industry for engineering, operational and artistic expertise. Amy Morhaime previously ran “World of Warcraft” in China and Blizzard’s global esports business. The Morhaimes have funded the company on their own, though Dreamhaven will be considering outside investors.
“Some of the things that were particularly difficult the first time around are going to be a little bit easier this time,” Morhaime, 52, allowed with typical understatement. “We aren’t starting with no money. We’re not having to write all the tools ourselves. There’s a lot of technology that’s available pretty reasonably for us to be able to build off of. And the business climate is a lot more friendly to game development start-ups. So it’s mostly exciting. Maybe 10 percent, you know, scary.”
Millions of Blizzard gamers (“World of Warcraft” alone reached over 100 million player accounts by 2014) will probably react to news of Morhaime’s new venture with a level of excitement akin to the reaction of movie buffs hypothetically learning that George Lucas — having sold Star Wars to the Walt Disney Company — has assembled a new film company filled with Star Wars veterans and is making brand new movies.
Blizzard fans tend to be deeply emotionally engaged not just with their games, but also with their human community of fellow players. Beginning in 2005, Blizzard has generally hosted an annual convention in California called BlizzCon, which is traditionally (though not always) an all-out lovefest among both developers and players. Under Morhaime, the public face of the company for decades, Blizzard actively fostered a welcoming, positive tone for the global Blizzard community. That is why Blizzard fans are universally Mike Morhaime fans.
It’s just that Blizzard is bigger than Star Wars, just as the video game business is bigger than the movie business. Disney bought Lucasfilm in 2012 for $4 billion. Today, Activision Blizzard is worth about $63 billion. Over the last year, Blizzard has contributed about one-quarter of the company’s revenue and operating income, so it’s not outrageous to suggest that Blizzard is worth around $16 billion (not that Activision is selling).
But Blizzard’s escalating value over the years came along with more and more corporate oversight. For Morhaime, at some level Dreamhaven is as simple as enjoying the freedom to just do his own thing with exactly the people he wants to work with.
“If you look back, just three years from ‘91 to ‘94, that’s the period where we were completely independent,” Morhaime recalled. “We sort of managed to operate inside larger companies with an incredible degree of autonomy and independence, but when you’re a part of a public company, there’s only really so much independence you can actually have, because I didn’t actually own the company for such a long time.”
Morhaime said that without the capital they were able to access after selling the company, he, Allen Adham and Frank Pearce — Blizzard’s co-founders — may not have been able to build the products that made the company such a success in the first place. “These games are very expensive to make,” he said. “I don’t know if we could have done it at all as an independent company.”
He said there was a period in 2003 and 2004 when Vivendi, the French company that owned Blizzard and several other game companies at the time, was trying to sell its overall game operation for $700 million. Blizzard could have ended up within Microsoft.
“We’re working on ‘World of Warcraft,’ we’re in meetings with Microsoft and others about potentially selling off all of the Vivendi games,” he said. “People were having trouble justifying the $700 million price tag at the time, which seems like a lot of money and was a lot of money back then. But if you put it in historical context of ‘World of Warcraft,’ that would have been a screaming deal. If we would have managed to do a leveraged buyout and get control back of the company, right then would have been the moment to do that.”
“And it’s not like that wasn’t something that we talked about,” he added. “But that’s a lot of money to borrow on prospects that, you know, there was no single game that really could have justified a valuation like that.”
All those years at Blizzard, Morhaime considered perhaps his most important job to be a buffer between corporate shenanigans and the creative wizards in his studios. To him, it’s the right thing to do, but he also sees it as just good business. For Morhaime, great products come from happy teams. In an industry known for burnout and a complete absence of work-life balance, he is known for valuing the person over the product.
“Beyond becoming friends with Mike over time, from the values perspective there are numerous examples in my career developing games and overseeing development teams where we came down to these critical decisions we had to make,” Sigaty, a longtime Blizzard developer, Dreamhaven co-founder and studio head of Secret Door, said in an interview. “One I can think of is during ‘StarCraft II’ in late 2009. I distinctly remember being in the room and there was this call we had to make about whether we would ship before the end of the year. We thought we could do it, but it was going to take everything and it wouldn’t quite be there. The quality level wouldn’t be there. And Mike said: ‘You guys need the additional time. We should just push this back.’ And that’s a horrible conversation. I know he’s going to have to deal with other people down the line, but Mike was just leading with what was right by players and by us as developers. That happened time and time again.”
Sigaty said memories like that made the choice to join Dreamhaven “so easy.”
Morhaime admits that at certain points in Blizzard’s complex corporate history, he felt he was laboring against his own environment.
“It tends to be the more entrepreneurial stage of a company that is really thinking about product and putting everything into making that as great as it can be,” he said. “And then something happens. You switch from entrepreneurial to operating and you’re bringing money in and revenue in, and the focus shifts from, ‘How do we make our product the best and how do we keep innovating?’ to, ‘How do we keep the revenue coming in, at least as much as last year?’ Those are the questions you start asking, not, ‘What will make this the best?’ and, ‘How do we make it more fun?’”
Morhaime says that when he stepped down as Blizzard’s CEO in 2018, he and Amy truly didn’t know what they wanted to do next. They went on a world cruise with family. They went to a ‘StarCraft II’ tournament in Germany as fans. Dreamhaven began as a conversation last fall between Morhaime and Chayes, a longtime Blizzard executive who had left recently and was considering starting his own studio with Browder, another Blizzard alum. (Despite recent rounds of layoffs by Blizzard, no one at Dreamhaven was laid off by the former company.)
“One of the best parts of working at Blizzard was getting the chance to really partner with Mike and understand his values and how he approached decision-making and work with someone who had a tremendous amount of courage to follow his convictions on what the right thing to do was,” Chayes, Dreamhaven co-founder and head of the Moonshot Games studio, said in an interview. “It felt like this is a great opportunity to join forces again and get something together.”
Dreamhaven’s symbol is a lighthouse, a nod to the view that games are a social and emotional haven for players around the world. As Morhaime embarks on a new journey, he also wants the company to illuminate a new, more positive direction for his notoriously harsh industry.
“We want to make a positive dent on the world,” Morhaime said. “It’s about human connection. How do you elevate the human connection and interaction through digital experience? We think that gaming and the global community of gamers can be a force for good.”
“Dreamhaven is hopefully like a beacon to the rest of the industry,” he added. “Maybe we can lead by example and show that there’s a better way of doing things and approaching the business of games and treating your employees and treating your players. Obviously you have to have success in product creation and success financially to back that up. But that is what we’re going for.”