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Embracer Group’s Restructuring Program
Embracer Group recently completed its internal restructuring program, a series of cost-cutting measures that resulted in the loss of approximately 1,400 jobs, the closure of several studios, and the cancellation of multiple games. Additionally, the company sold Gearbox Entertainment and Saber Interactive to Take-Two and Beacon Interactive, respectively, at a financial loss.
Background
Embracer Group was prominently featured in the gaming industry for its aggressive acquisition strategy during the pandemic. The company had acquired or invested in numerous companies, including Gearbox Software, Crystal Dynamics, Eidos Montreal, Middle-Earth Enterprises, Perfect World Entertainment, Aspyr, and many others.
In June 2023, Embracer Group’s CEO, Lars Wingefors, published an open letter detailing the restructuring program aimed at shifting the company from heavy investment to a highly cash-flow generative business model. The program, which has now concluded, led to the closure of studios like Volition, Campfire Cabal, and Free Radical. Although specific game cancellations were undisclosed, reports suggest that a new Deus Ex title was among them.
Post-Restructuring Outlook
Matthew Karch, CEO of Saber Interactive, defended Embracer Group in a recent interview, attributing the company’s challenges to various factors. These included the failure of a planned $2 billion investment, underperformance of key titles like Saints Row, and the costly acquisition of Asmodee.
Karch emphasized that Embracer made earnest efforts to preserve jobs despite having to terminate studios. He expressed frustration over the misconception surrounding the company, highlighting the positive intentions of its employees.
Despite the setbacks, Embracer Group continues to have several projects in development, such as a new Tomb Raider game and a Lord of the Rings MMO. Saber Interactive is now responsible for the Knights of the Old Republic remake, while most of Gearbox’s projects have transitioned to the same company, except for the upcoming Hyper Light Breaker.
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