The publisher has laid off a thousand employees since the start of its “restructuring plan,” which began at the end of September. However, the company had acquired several licenses and development studios in recent years.
This is the story of a video game publisher whose eyes were bigger than his stomach. The Swedish giant Embracer, which in recent years has bought several development studios as well as legendary video game licenses such as Dead Island, Deus Ex or Borderlands, recently announced in a quarterly report that it has parted ways with 900 employees since the end of September. or 5% of the total workforce. Not such surprising news, as the video game industry is facing a wave of layoffs and studio closures, but clearly leaving gamers fearful of future titles that would decline in quality.
“It’s never easy to part with talented people. “I would especially like to thank the people who left Embracer during the quarter,” wrote CEO Lars Wingefors in this financial report. These are difficult decisions and we do not make them lightly.” He continued: “In addition to exiting a number of studios, we have also reduced staff and reduced the number of projects at several other studios, with an emphasis on “The aim is to improve the return on planned investments in PCs and consoles.” Between March and September, Embracer canceled a total of fifteen games, “mostly unannounced projects,” reports the specialist media Video Game Chronicles. Embracer should continue its momentum as its “restructuring plan” is still “in progress,” it says.
Bulimic group
These 900 laid-off employees and these 15 canceled games are actually just another step in the major “restructuring plan” that the group of more than 15,000 employees announced last June. Bulimic, the company that does not limit itself to video games but also ventures into comics or board games, had become, within a few years, one of the symbols of “consolidation” in the world of video games. Since the second half of the 2010s, Embracer has continued to expand its acquisitions and acquired several development studios, including Tarsier Studios (Little Nightmares), Saber Interactive (Snowrunner, World War Z), but also and especially Gearbox Software (Borderlands). Crystal Dynamics and Eidos Montreal (Tomb Raider, Deus Ex). These takeovers are often accompanied by attractive licenses. Embracer also acquired Middle-earth Enterprises in August 2022 and thereby acquired the intellectual property for all productions relating to The Lord of the Rings and The Hobbit.
But in 2023, the sweet dream begins to fade when the group fails to get Saudi investment fund Savvy Games to sign a mysterious partnership that was supposed to net the Swedish company $2 billion. Nipped in the bud, the project still had to recoup “already capitalized costs for a series of big-budget games,” Embracer admitted in May. The announcement of this failure caused the company’s shares to plummet on the Stockholm Stock Exchange, losing more than 44% at the close. Since then, Embracer closed the doors of Volition (Saints Row, Red Faction) last August. The publisher would also seek to sell its Golden Goose Gearbox, which it purchased in 2021 for $1.3 billion. The more than 15,000 remaining employees can only hope that the company’s next games (Arizona Sunshine 2, Alone in the Dark, Warhammer 40,000: Space Marine 2, etc.) will be major commercial and critical successes.