2023-11-21 22:51:06
The publisher has let go of a thousand employees since the start of its “restructuring plan”, which began at the end of September. However, it had purchased multiple 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 multiple 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 had let go of 900 employees since the end of September, or 5% of its total workforce. Not so surprising news, as the video game industry is facing a wave of layoffs and studio closures, but which obviously makes people fear gamers future titles whose quality would be degraded.
«It is never easy to part with talented people. I would like to especially thank those who left Embracer during the quarter, wrote group CEO Lars Wingefors in this rapport fiscal. These are difficult decisions and we do not take them lightly.»And to continue: «We’re not just abandoning a number of studios, we’ve also made staff reductions and reduced project counts at several other studios, with a focus on improving expected ROI on PC and consoles.“Between March and September, Embracer canceled a total of fifteen games,”mainly unannounced projects», reports the specialized media Video Game Chronicles. Embracer should continue its momentum, since its “restructuring plan” is always “in progress“, we can read.
Bulimic group
These 900 dismissed employees and these 15 canceled games in fact constitute only one more step in the great “restructuring plan» announced last June by the group, with more than 15,000 employees. Bulimic, the company, which is not limited to video games but also ventures into comics or board games, had become in the space of a few years one of the symbols of “consolidation» in the world of video games. Since the second part of the 2010s, Embracer has continued to increase its acquisitions, taking over multiple development studios, including Tarsier Studios (Little Nightmares), Saber Interactive (Snowrunner, World War Z), but also and above all Gearbox Software (Borderlands ), Crystal Dynamics et Eidos Montreal (Tomb Raider Deus Ex). These buyouts are often accompanied by juicy licenses. Thus, Embracer also acquired Middle-earth Enterprises in August 2022, acquiring the intellectual property for all productions related to Lord of the Rings and at Hobbit.
But in 2023, the sweet dream begins to fade when the group fails to get the Saudi investment fund Savvy Games to sign a mysterious partnership which was to bring the Swedish firm two billion dollars. Nip in the bud, the project was nevertheless supposed to cushion “costs already capitalized for a range of big budget games“, Embracer admitted in May. The announcement of this failure caused its shares to plunge on the Stockholm Stock Exchange, losing more than 44% at the close. Since then, Embracer has closed the doors of Volition (Saints Row, Red Faction) last August. The publisher would also seek to sell its golden goose Gearbox, which it had bought in 2021 for $1.3 billion. For the more than 15,000 remaining employees, all that remains is to hope that the group’s next games (Arizona Sunshine 2, Alone in the Dark, Warhammer 40.000: Space Marine 2…) were great commercial and critical successes.
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