Embracer Group Sells Gearbox Entertainment to Take-Two Interactive
Embracer Group has divested Gearbox Entertainment from its stable of video game studios, with Take-Two Interactive purchasing the company for $460 million. This sale is part of Embracer’s massive, ongoing restructuring designed to cut costs after a planned $2 billion deal with Saudi Arabia-backed Savvy Games Group fell through in 2023. The sale comes three years after Embracer acquired Gearbox for $1.3 billion in 2021.
What Does This Mean for Gearbox?
This move means Embracer no longer owns Gearbox’s development entities, such as Gearbox Software, Gearbox Montreal, and Gearbox Studio Quebec, nor franchises such as Borderlands/Tiny Tina’s Wonderlands, Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem. These assets will be acquired by Take-Two, which owns Rockstar Games and 2K, among other labels. Closing of the transaction is expected to take place in fiscal year Q1 2024/25, pending customary regulatory approvals.
In a press release from Take-Two, Gearbox confirms it has six titles in the works. Five are sequels, and two of those sequels are from the Borderlands and Homeworld franchises. It also has an announced new IP in development.
Embracer’s Retained Assets
However, Embracer does retain other branches/subsidiaries of Gearbox. That includes Gearbox Publishing San Fransisco (soon to be renamed), which has publishing rights to the Remnant franchise, Hyper Light Breaker, and other upcoming unannounced titles. Additionally, Embracer is keeping Cryptic Studios (Neverwinter Online, Star Trek Online), Lost Boys Interactive, and Captured Dimensions. According to the press release, these companies will be “welcomed and integrated into other parts of Embracer Group in the coming period.”
Words from Embracer CEO and Gearbox Founder
In a press release, Embracer CEO Lars Wingefors writes,
“Today’s announcement marks the result of the final structured divestment process and is an important step in transforming Embracer into the future with notably lower net debt and improved free cash flow. Through the transaction, we lower business risk and improve profitability as we transition to becoming a leaner and more focused company. After evaluating several options for Gearbox, I am happy that we have reached a solution that is in the best interest of all stakeholders. Randy and the team have been great team members throughout the past years, and I would like to thank them all for that. As one of the world’s greatest games developers, I am confident that Gearbox will continue to innovate and thrive in their new home within Take-Two.”
Gearbox founder and CEO Randy Pitchford adds,
”As a significant long-term Embracer Group shareholder, I believe in the strategy for the Embracer Group going forward and am completely convinced that this transaction is the best possible scenario and an obvious net positive arrangement for Embracer Group, for TakeTwo and, of course, for Gearbox Entertainment. My primary interest is always Gearbox, including our talent and our customers. I want to personally ensure fans of our games that this arrangement will ensure that the experiences we have in development at Gearbox will be the best it can possibly be.”
Earlier this month, Embracer announced it was selling Saber Interactive for $500 million. It has also laid off employees across several studios, canceled a multitude of in-development games, and shut down Free Radical Design and Volition Games entirely.