Embracer Group has seen something of a fall from grace in 2023, with the cancellation of a $2 billion publishing deal rumoured to be with Savvy Games Group leading to disastrous financial result in Q4 2023, which in turn caused the company to announce a restructuring programme in June.
Now, at a Q&A at the company’s annual general meeting, Wingefors noted that Embracer has needed to make decisions which he calls “tough from many standpoints”, but that the company remains determined to weather the storm.
"Ultimately we are making decisions to either restructure or downsize some teams, and there will be a few cases of closures,” said Wingefors. “It's difficult and it takes time, but we announced this in June and now we're at the end of September and we're confident to deliver on the targets we set out for the end of the fiscal year.”
2022 saw a year of massive expansion for the company, with the acquisitions of Square Enix’s Western assets, including critically acclaimed series’ such as Legacy of Kain and Tomb Raider - the latter of which it later sold to Amazon for $600 million. The acquisition of the IP rights to JRR Tolkien’s literary works helped put the cherry on top of a fantastic year, with us naming the company as one of the top 50 mobile game makers of 2022.
August saw the company see something of a comeback, with a 47% year-on-year increase in net sales, however it seems that Embracer continues to struggle, with CEO Lars Wingefors noting that the company will need to “continue making tough decisions” in its efforts to become more cost-efficient.
Following the sale of Tomb Raider, Wingefors noted that the company may have continued success in selling its high-value assets.
"On the divestment side there is a strong vibrant market with many, many active players–both financial sponsors and big industry players," he said. "It's easier to run proper processes for more high-value assets than smaller assets, and I think that's what we have experienced now as well."
He added that, ideally, Embracer Group would help employees affected by the company’s continued restructuring find new positions, even if doing so means helping them move on from positions within the company.
We listed Embracer Group as one of 2022’s top strategic investors.