Embracer Group Announces Major Restructuring Plan Including Studio Closures and Game Cancellations
Swedish gaming conglomerate Embracer Group has announced a major restructuring plan that will lead to the closure of several studios and the cancellation of multiple games. Embracer Group has been acquiring studios and IP at a rapid pace over the past few years but has been struggling recently, including a recently fallen-through deal worth $2 billion and challenges with notable releases and game delays.
Details of the Restructuring Plan
The restructuring plan will be split into three phases and is expected to run until March 2024, with the first phase having immediate and noticeable cost-saving measures. Although the nature of each phase remains unclear, it seems to focus on cost savings and consolidation to decrease debt below 10 billion Swedish Krona, which equals roughly $930 million.
Embracer Group CEO Lars Wingefors stated that, by the end of the year, the company’s staff of close to 17,000 people would be lower as some unknown number of employees will be laid off as part of the restructuring process. While Wingefors has only stated that studios to be closed are underperforming and creating games that do not meet their standard, current interim COO Matthew Karch stated that impacted projects have not yet been revealed and have low projected returns on investment.
Games Impacted and Confirmed Safe
Embracer Group owns the rights to popular franchises such as Tomb Raider and Lord of the Rings. The company recently responded to concerns about the restructuring by affirming that any announced games would remain safe from the restructuring plan. Specifically, Crystal Dynamics, a subsidiary of Embracer Group, stated that neither its upcoming Tomb Raider game nor Perfect Dark is impacted by the restructuring.
However, though Embracer CEO Lars Wingefors said that any announced games are “safe” from the restructuring, Karch implied that the games canceled have “for the most part” not yet been announced.
Embracer Group’s Seismic Acquisitions and Consolidations
The publisher’s acquisition of Saints Row publisher Deep Silver and acquisition or founding of over 50 studios and offices since 2020 have been a part of Embracer Group’s consolidation and expansion into the gaming industry. The company has also expanded its holdings into the world of comics and tabletop games, with the acquisition of Dark Horse Comics and Asmodee, respectively.
Despite this active purchasing, Embracer Group’s CEO Lars Wingefors has subsequently indicated that this growth may have happened too fast as the publisher struggles to keep up with the responsibility and cost of its purchases.
The Embracer Group seems to be undergoing a pivotal moment in its growth as it grapples with significant changes and challenges in the gaming industry. While the impact of the restructuring remains unclear, Embracer Group is undoubtedly taking action to streamline and stabilize its corporate structure.