Following on from the announcement that it is selling Gearbox Software to Take-Two Interactive, the dumpster fire that is the Embracer Group has announced that its restructuring process is finally over.
“We are ending the restructuring programme now, end of March, and the Gearbox restructuring process has been part of that programme. Now we are getting approached, I would say not quite daily, but on a weekly basis, by companies that would like to acquire certain assets within the group. And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward,” said Embracer CEO Lars Wingefors during an earnings call.
That will be fantastic news for everybody working under Embracer, all of whom have surely spent the last year fearing for their jobs. Roughly 1,300 people were laid off due to Embracer desperately attempting to lower its tremendous debt which it accrued by buying companies at a staggering rate. By early 2023, the group owned 138 studios, including the likes of Volition, Gearbox, 4A, Eidos Montreal, Saber Interactive and Crystal Dynamics. The majority were bought up in the last five years.
However, in 2023 a planned deal worth $2-billion fell through and Embracer found itself in deep trouble. They announced plans to restructure the company, resulting in job losses, studios being closed and studios being sold. 30 year veterans Volition, the developers of Saints Row, were closed while Saber Interactive managed to buy itself and become an independent studio. Free Radical was also shut down after being formed by Embracer itself to make a new Timesplitters game.
During the earnings call, Lars Wingefors was also asked whether Embracer plans on buying anything else, a daring question considering the company nearly burned itself to the ground by gobbling up too much too quickly.
“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,” said Wingefors. “Now we are in the late phases of the consideration into the future of the group, and that’s our highest focus and priority – how we set up ourselves and structure ourselves, and utilise our assets we have within the group, and have them work together, and how we leverage them better working together, utilising different functions, I think that’s our focus right now, to increase profitability and cashflow generation, by simply making better products and games.”
At this point, Embracer still owns approximately 111 studios, and has 12,000+ employees. Perhaps I’m wrong, but those numbers still seem far too high to be sustainable. I hope I’m wrong, but I don’t think Embracer is out of trouble yet, and more layoffs and closures are likely to occur.