Embracer say their restructure is over, but it's "too early" to start acquiring studios again
- Thread starter John Elden Ring
- Start date
As restructuring ends with the sale of Gearbox, Embracer's CEO has a new plan: 'simply making better products and games'
It's a bold strategy.
Embracer say their restructure is over, but it's "too early" to start acquiring studios again
Embracer Group say that their restructure is complete after selling Gearbox, but they're not yet ready to start acquiring (or destroying) new studios.
www.rockpapershotgun.com
Earlier today, megacorp Embracer announced they were selling Borderlands developer Gearbox to Take-Two. During an investor call about the divestment, CEO Lars Wingefors confirmed that this brought an end to the restructuring process Embracer announced last year. He was also asked whether this meant Embracer had plans to start acquiring other studios again.
Wingefors said it was "way too early" to restart "the M&A engines."
"We are ending the restructuring programme now, end of March, and the Gearbox restructuring process has been part of that programme. Now we are getting approached, I would say not quite daily, but on a weekly basis, by companies that would like to acquire certain assets within the group. And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward," said Wingefors.
The companies that Embracer have chosen to sell had "negative cashflow", he said, and divesting from those businesses would make the Embracer that remains more "cashflow generative."
This doesn't mean that it's time to resume the group's previous strategy of hoovering up other companies, however.
"Looking to do more [mergers and acquisitions] deals – I think it’s way too early to start talking about restarting the M&A engines again," said Wingefors. "Now we are in the late phases of the consideration into the future of the group, and that’s our highest focus and priority – how we set up ourselves and structure ourselves, and utilise our assets we have within the group, and have them work together, and how we leverage them better working together, utilising different functions, I think that’s our focus right now, to increase profitability and cashflow generation, by simply making better products and games."
As of early 2023, Embracer owned 138 studios, including Gearbox, Crystal Dynamics, Eidos Montreal, Volition, Piranha Bytes, Ghost Ship Games, 3D Realms, 4A Games, Flying Wild Hog, Saber Interactive, Perfect World, Tuxedo Labs, Coffee Stain, Dambuster Studios, New World Interactive, Warhorse Studio and more. Most had been acquired in the past five years.
During the last twelve months, developer and publishing group Saber Interactive were split into a separate company, taking 3D Realms and 4A Studios with them; TimeSplitters developer Free Radical were closed; Saints Row developer Volition were closed; and 8% of Embracer's employees were laid off.
So hey, it's good news that they're not currently planning to restart the mergers-and-acquisitions engine, aka the creativity shredder, aka the human misery harvester, aka the C-suite fidget spinner. Maybe someone should hide their keys in case they change their mind.
Last edited:
They should never be allowed to acquire anything ever again. Irresponsible and incompetent leadership
Some of the companies they brought started dev/publisher relationships with each other or remaking eachother's games. Other than that, what exactly is an ownership group supposed to "improve" a studio with?
Anyways, I think its funny that people talk about how much "damage" Embracer has done to games when you can count the number of studios they closed on one hand compared to, say, a group like EA or Activision laying off far more people (and closing a higher proportion of studios) while not suffering under the extreme financial duress that Embracer is.
That said, I don't think Lars is out of the woods yet and wouldn't be surprised if Embracer ends up right back here again later this year.
I hope they other company buy the studios off them for cheap though
100% this.
A company that doesn’t delivery games and kill studios and franchises should never be allowed to buy studios.
Agreed, the amount of studios EA,Activision, Microsoft and Konami have killed is too much. They are ruining gaming
"... we are getting approached, I would say not quite daily, but on a weekly basis, by companies that would like to acquire certain assets within the group. And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward," said Wingefors.
Dammit at that quote.
Exactly which game properties have they liscenced-out/sold-off to others?
Dammit at that quote.
Exactly which game properties have they liscenced-out/sold-off to others?
They sold Gearbox to Take Two last week.
The sold Saber Interactive to Beacon Interactive with the follow studios: Nimble Giant, 3D Realms, Sandbox Strategies, New World Interactive, Slipgate, Mad Head Games, Fractured Byte, and DIGIC. Plus after a period they can buy back 4A Games and Zen Studios if they wish (Saber Interactive already said they will buy).
They sold Foxglove Studios and Goose Byte to company’s managers.
Listing IPs is more complex because the list is too big and it gives a lot o time to list
.Embraced is selling assets to cover the net debits of the company.
Last edited:
They've licensed out Lord of the Rings (of which they own the full rights) to a lot of different game companies all at the same time and Tomb Raider to Amazon, they sold Gearbox to Take 2 and Saber back to its former owner, who also sold back his Embracer shares at the same time, closed Volition and Freeradical (not the real one) and divested/closed a select few small companies that they had been funding through their incubator.
All in all I think they did a very poor job of restructuring. Fewer divisions is, you know, fine, but they didn't actually consolidate their remaining assets and the big questions about Embracer were always were is the money coming from and why do they tolerate so much overhead. Its no wonder, to me, that the first thing Take 2 did when acquiring Gearbox was to cut a bunch of HR and PR people- a team that size didn't need separate groups for that. On top of that, they said that they were going to try to consolidate around bigger titles but ended up doing the opposite of that. To me it paints the picture of their CEO being forced to do this by the board, implementing it slowly on purpose, lying to investors about what he was going to offload and then not actually making the cuts neccissary.
As said further up, I think we'll just be right back up here again.
The moment big tech companies and the institutional investors took notice to gaming's earnings, things were fucked. The thing that truly set things up to go this way is the western world not putting stronger limitations on big company acquisitions (see Adobe, Black Rock, etc for a good example).
Just like with the housing market, a small group of big money corps thought they could just buy it all, jack up the prices and roll in the dough. Unfortunately for them, they don't realize that AAA gaming is ruled by enthusiasm and art, which isn't easy for corpos to do, especially nowadays.
Just like with the housing market, a small group of big money corps thought they could just buy it all, jack up the prices and roll in the dough. Unfortunately for them, they don't realize that AAA gaming is ruled by enthusiasm and art, which isn't easy for corpos to do, especially nowadays.
I think people give some of the big Japanese companies an easy time of it because they just don't pay as much attention to who buys and closes what. Remember that time a decade ago when Konami brought Hudson and near-immediately stopped developing games in nearly all of their series? Remember when Infogrames (French company) renamed itself Atari and then immediately shit the bed and had to close or sell nearly everything? That killed way more studios than Embracer has and yet is totally forgotten outside of their stylized armadillo logo. Square-Enix not only spent a full decade fucking with Eidos' output, they also have gradually whittled away more than half of their project teams from the SNES-PS2 glory days. But you just don't recognize that because they didn't name their "studios" and outsourced a lot of the actual dev work to third parties so you nobody in the west would hear if Tose or Game Studio had to lay people off because less work was coming in. Tons of Sega and Capcom teams no longer exist, etc, etc.
That said if you really wanted me to do an all-time list it would probably be EA at the top, followed by Activision, then Nintendo (with the major caveat that for every truly awful thing that they did to gave devs, they also did a truly awesome thing somewhere else,) then Facebook, then Square-Enix.
That said if you really wanted me to do an all-time list it would probably be EA at the top, followed by Activision, then Nintendo (with the major caveat that for every truly awful thing that they did to gave devs, they also did a truly awesome thing somewhere else,) then Facebook, then Square-Enix.