Drastic consequence of the billion-dollar deal falling through: the gaming giant is broken up into three companies

There was a bang that went through the international games industry yesterday. Embracer, the mega-corporation behind gaming brands such as Metro, Tomb Raider and Kingdom Come, among others, is dissolving. At least in the form in which the company currently exists. Because in order to save the financially troubled company, Embracer split into three independent companies.

It is no news that the Swedish gaming giant is in crisis. The current tech crisis did not leave Embracer unscathed. When Saudi Arabian investors unexpectedly collapsed a deal worth two billion dollars at the beginning of 2023, management had to pull the emergency brake.

Over 1,300 jobs were eliminated, 29 games were canceled, and several studios were completely closed. The most prominent victims of the austerity measures include a new Deus Ex, which has already been in development for two years, as well as the traditional German studio Piranha Bytes, the makers of Gothic. But that apparently wasn't enough.

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What's next for Embracer?

As Embracer's management announced on Monday, the group wants to distribute its remaining studios and brands among three independent, listed companies in the future. Because that A broad mix of business areas is one of the problems with the previous corporate structure been.

These three new companies are intended to better reflect Embracer's various business areas:

• Asmodee Group will be responsible for the business with board games, trading cards and tabletop RPGs in the future. The company owns, among other things, the rights to Catan.
• Middle Earth Enterprises & Friends will market Embracer's big brands and AAA franchises in the future. These include, among others, the Lord of the Rings universe, Tomb Raider, Kingdom Come: Deliverance, Metro and Dead Island as well as the Munich publisher Plaion.
• Coffee Stain & Friends will take over the B series in the video game business in the future. Small and medium-sized studios and brands are located here. The Viennese publisher THQ Nordic will also become part of the group.

Strategic turnaround

Like the industry portal GamesEconomy Reportedly, this step represents a 180-degree turnaround from Embracer's previous business strategy. Until now, the company had tried to swallow up as many other studios as possible in order to achieve significant dominance in the market. Now the repulsion is a step in the opposite direction.

The company's management hopes to be able to rehabilitate its troubled finances and become more attractive for new investors. Embracer also took out a loan of almost 900 million euros for the restructuring.

It remains to be seen whether the crisis has now been averted. After a turbulent year in 2023, the employees would only like to see things calm down at Embracer.

By the way: The separation from Embracer does not only have to have negative consequences. The redistribution of studios and trademark rights, for example, would now be a realistic one Lord of the ringsgame from Kingdom developer Warhorse is definitely conceivable. After all, all trademark rights are now under one roof.