The company was founded as a division of Annapurna Pictures on December 1, 2016, as Annapurna's attempt to expand into the video game industry. The company's early staff was composed of existing Annapurna executives, producer Neale Hemrajani and Technology Head James Masi along with several video game veterans, including Nathan Gary, Deborah Mars, Hector Sanchez, and Jeff Legaspi, who had worked in Sony Interactive Entertainment and Warner Bros. Interactive Entertainment.[2]Jenova Chen also served as the company's advisor. The company aimed to publish games that are "personal, emotional, and original".[3]
On the day of establishment, the company announced several publishing deals it had signed with several independent developers. Some of the first games published by the company included Gorogoa, What Remains of Edith Finch, Wattam, and Florence.[4] In 2017, Annapurna announced that it would begin publishing more games, which included The Artful Escape, Ashen, and Telling Lies.[5][6][7]
In October 2020, Annapurna established an internal development studio in Los Angeles.[8]
Leading into and through the COVID-19 pandemic, Annapurna Pictures had been struggling with financial issues, and its CEO Megan Ellison had disappeared from the public around 2019 while her father Larry Ellison helped to stabilize the company and other executives departed.[9] Megan Ellison eventually reappeared around 2021, and promoted Gary to president of Annapurna Pictures, while Mars and Nathan Vella, former president of Capybara Games, were promoted to co-manage Annapurna Interaction.[10][11][12] According to sources speaking to IGN, Gary's management put more resources into the gaming division, as well as promoting Masi to chief administration officer for Annapurna Pictures. Gary also claimed to have established Annapurna Animation, an animation division of Annapurna Pictures, with their premiere work being Nimona, though other sources stated this had been credited to Ellison. As a result, there was a matter of distrust between Ellison and Annapurna Interactive, leading to a hands-off approach for the publisher to continue to group.[10]
In March 2022, video game journalism YouTube channel People Make Games reported on three video game studios publishing under Annapurna Interactive—Mountains, Fullbright, and Funomena. In all three cases, employees reportedly reached out to Annapurna Interactive, addressing concerns regarding abuse and a toxic work environment being created by the studio founders. In hopes of getting Annapurna Interactive to mediate, employees stated that the publisher was siding mostly with the founders in question. According to one former studio employee, representatives of Annapurna Interactive had been quoted responding that "without strong personalities, games don't get made." Chris Bratt of People Make Games saw these incidents as part of a greater pattern of auteur culture that can be found across the film and video game industry.[13][14]
In June 2022, Annapurna announced the formation of an internal game development studio headed by Chelsea Hash.[16] Its first game, Blade Runner 2033: Labyrinth, was announced in 2023.[17]
In September 2023, while Annapurna Animation announced an animated film adaptation of Stray is in development after the success of its first film Nimona (2023), other games from Annapurna Interactive are also considered to have potential adaptations.[19]
In November 2023, Annapurna Interactive made its first acquisition in South African studio 24 Bit Games, a studio which had provided support for other indie games such as Gone Home, Neon White, and Cocoon.[20]
According to IGN and its sources, Ellison became more involved in Annapurna Pictures at the start of 2024, letting go of Masi as his role was considered redundant, and put Gary back as president of Annapurna Interactive; however, other sources claim that Gary was also let go at this time.[10] These events led to some of the Annapurna Interactive staff to quit, and Ellison sought to understand what issues there were. After conversing with the remaining staff, Ellison brought back Gary and Masi, re-establishing them in Annapurna Interactive, and opened discussions towards having the division become its own standalone company tentatively named Verset, with revenue to be split between Annapurna and Verset.[10] Shortly after this, Ellison rehired Sanchez to lead a new games and interactive division within Annapurna Pictures. This effort was spearheaded by Annapurna Pictures' deal with Remedy Entertainment to fund development of Control 2 along with getting the television and film rights to Control and Alan Wake. Internally, this new division would become Annapurna's division for AAA games, while Annapurna Interactive would remain focused on indie games. However, Annapurna Interactive staff were not informed of these details.[10]
When Remedy publicly announced its deal with Annapurna Pictures in August 2024, Annapurna Interactive's staff were confused and tried to approach Ellison about their previously proposed split, but Ellison did not join these negotiations, instead taking more control in Annapurna Interactive.[10] At the start of September 2024, Gary, Masi, Mars and Vella submitted a co-resignation letter.[10] Annapurna Pictures reported at the time they were planning to integrate the Interactive division among their other branches.[21] The following week, Bloomberg News's Jason Schreier reported Annapurna Interactive's entire staff of 25 had resigned. The group tried to continued their previous discussions on establishing Verset, but Ellison did not respond to these messages.[22][10]
Following these resignations, Sanchez took over Annapurna Interactive with help of other staff from Annapurna Pictures, and while they intend to honor the existing publication deals, the resignations left questions regarding what support developers publishing though Annapurna Interactive would get.[22][10] Some developers with projects under Annapurna Interactive, including Davey Wreden and C418, and Beethoven & Dinosaur stated their forthcoming or planned games were not affected; Remedy Entertainment was not affected as Annapurna Pictures was responsible for their collaboration.[23][24]Blade Runner 2033: Labyrinth, which was being developed internally, was also left in question since the internal development team had also resigned, though Annapurna Interactive reiterated plans to release the game following the transition.[10] Annapurna announced that development of Silent Hill: Townfall will still continue.[25]
