Embracer Group has seen a meteoric rise in the games industry over the last decade. The conglomerate owns a large number of development studios, thanks to what has been a never-ending string of acquisitions, and encompasses several major publishing labels, including the likes of Deep Silver, Saber Interactive, THQ Nordic, Gearbox, Crystal Dynamics, and many more. However, it has now announced that it’ll be going through a comprehensive restructuring program as it looks to become “a leaner, stronger and a more focused, self-sufficient company.”
In an open letter written by Embracer Group CEO Lars Wingefors, he says the restructuring program will “transform us from our current heavy-investment-mode to a highly cash-flow generative business this year.”
“It will enable us to meet the worsening economy and market reality as a strong company and it will fundamentally change our prioritization of growth with raised capital towards optimization and growth based on our own cashflows,” Wingefors writes. “The program will lower our net debt significantly. After completion of this program, we will generate growth in profitability with less business risk and with higher margins in the PC/Console segment over the coming years. This, in turn, will give us the freedom to continue to grow and deliver the high-quality experiences our players really value.”
Embracer Group’s restructuring program will be carried out over four separate phases between now and the end of the current fiscal year (March 2024), and will also include layoffs across the company.
“Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this,” Wingefors writes, and adds that “affected team members receive information first”, while some will be given the chance to “transition onto other projects.”
Meanwhile, as part of its restructuring, Embracer will also be shutting down some studios and either cancelling or pausing development on some projects. Whether the troubled Star Wars: Knights of the Old Republic – Remake will be one of them remains to be seen. The company will also scale down its third party publishing plans and instead focus more on its internal properties
“The actions will include, but not be limited to, closing or divestments of some studios and the termination or pausing of some ongoing game development projects,” Wingefors says. “It will also include decreased spending on non-development costs such as overhead and other operating expenses. We will reduce third party publishing and put greater focus on internal IP and increase external funding of large-budget games.
“Our new Executive Management team members, Matthew Karch and Phil Rogers, will work to implement a revised, thorough review process for investments in our ongoing and potential new game development projects. They will also take the lead on further consolidation of operations, including review of the operative group structure. We will have an increased focus on accountability across the group, ensuring performance is in line with or exceeding current targets.
“The potential impact from the program of future game releases will almost entirely be around unannounced projects. All announced significant releases will still be released as planned.”
In its current pipeline, Embracer Group has a number of games lined up for release, including the likes of Remnant 2, Hot Wheels Unleashed 2: Turbocharged, Alone in the Dark, Payday 3, Warhammer 40,000: Space Marine 2, and more.
Earlier this year, the company announced that it would be merging the Deep Silver, Ravenscourt, and Prime Matter publishing labels with PLAION. Read more on that through here.
