Embracer financials see lukewarm performance in Q4

The Embracer Group faced disappointing Q4 results for their mobile games division, with a 36% decrease in growth compared to the previous quarter. The challenge was attributed to difficult year-on-year comparisons, changes in platform privacy, and lower ad prices. Despite this outcome, the company’s net sales increased by 79% to SEK 94bn ($877m), driven by strong sales for console games such as Dead Island 2, which broke studio records for Deep Silver. The company experienced organic Q4 growth of -4%, with only a modest increase of 19% to SEK 5,819m ($54.2m) in sales for the year overall.

CEO Lars Wingefor expressed optimism for mobile game’s potential recovery in the future with monetization signals from advertising revenue behaving better than originally expected. Embracer Group’s Q3 financials showed a significant increase in sales by 128%, but the company’s proposed $2bn deal did not come to fruition. While this loss is not included in the forecast for the current financial year, it has impacted Embracer Group’s outlook for the future. As a publicly traded company, the group is vulnerable to market shocks and the impact of this deal’s failure is significant and hard to ignore.

The company’s recent history of mergers and acquisitions is noteworthy in comparison to the minimal activity in this area during Q4 of 2021. The failed $2bn deal could be a significant factor in what would otherwise appear to be a sudden shift in strategy. Regardless of any form of corporate activity, Embracer Group is set on making strides in the industry and remain optimistic of recovery with mobile games through advertisement strategies.