Embracer CEO Focuses on Profitability and Cashflow Generation

Embracer CEO Lars Wingefors has emphasized that it is too early for the company to consider acquiring new studios. After making significant changes such as job cuts, game cancellations, and studio closures, Embracer’s main goal is to enhance profitability and cashflow by improving the quality of its products and games.

Regarding future mergers and acquisitions, Wingefors stated, “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.” The current focus is on restructuring the group, utilizing existing assets effectively, and ensuring better collaboration among different functions within the organization to drive profitability and cashflow.

Embracer highlighted that the closed or divested companies had negative cashflow, and the remaining assets are not up for sale. Wingefors emphasized the importance of these assets for the group and its shareholders going forward.

Despite acquiring Gearbox in 2022, Embracer has agreed to sell Gearbox Interactive to Take-Two for $460 million. This move is part of Embracer’s comprehensive restructuring program, initiated after a major strategic partnership collapse in May last year.

Take-Two’s acquisition of Gearbox Interactive will include popular franchises like Borderlands and Tiny Tina’s Wonderlands, along with Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem. The transaction is expected to be finalized in Q1 FY 24/25, concluding in June 2024.

Embracer will continue to own assets like Lost Boys, acquired by Gearbox in 2022.