Embracer Group has released its latest financial report, examining the company’s performance in Q1 of the 2023-2024 fiscal year (April-June) - coming after a highly publicised crisis in their share price following collapse of a $2 billion deal with an unnamed third party, rumoured to be Savvy Games Group.
Net Sales increased 47% year-on-year, standing at 10,450 million SEK ($956 million) compared to 7,118 million ($651 million) in Q1 2022.
Mobile gaming proved to be a relatively low performer for the company, generating 1,438 million SEK ($132 million) in net sales, 13.76% of the total. This represents a 3% decline from 1,488 million SEK ($136 million) from the same period last year.
Mobile is the only sector to post declines in the latest quarter, with PC and console games increasing 74% year-on-year to 3,996 million SEK ($365 million), tabletop games increasing 20% to 3,184 million SEK ($291 million), and entertainment and services increasing a massive 173% from 671 million SEK ($61 million) in Q1 2022 to 1,832 million SEK ($168 million). The success of the entertainment and services sector was led by the contribution of Middle-earth Enterprises, driven by strong licensing revenue for The Lord of the Rings.
A positive future
Despite the decline in the mobile gaming sector, the company remained optimistic about its performance.
“The Mobile Games segment had a solid performance in profitability which was ahead of management expectations. Net sales show -12% organic growth, but underlying market trends have improved somewhat sequentially and the organic decline moderated notably compared to Q4,” said CEO Lars Wingefors. “Despite a sequential increase in user acquisition cost, profitability was strong, with an Adjusted EBIT margin of 29%, driven by systematic investments to balance growth and profitability. The mobile businesses are expected to show positive organic growth for the full-year and continue to add to both earnings and cash flow diversification.”
The report also notes that the company’s mobile gaming segment was affected by lower ad prices, resulting in negative organic growth.
We listed Embracer Group as one of the top 50 mobile game makers of 2022. We’ll be unveiling our list for 2023 at our event at Gamescom tomorrow.
