Advertisement
As the beginning of one “new chapter” Embracer Group describes the split into three independent, listed companies.
Update from April 22, 2024 (12 p.m.): The division of locations, studios and brands into three independent units has far-reaching effects on the computer games industry in Germany, Austria and Switzerland: The GamesWirtschaft lightning analysis provides an initial assessment of the situation at Embracer.
On the stock exchange, the news resulted in a modest increase of 10 percent compared to Friday's closing price. The fact that Embracer shares have already gained 50 percent in the past few weeks suggests that some market participants were not completely surprised by today's announcement.
Report from April 22, 2024 (8:30 a.m.): Signs of dissolution at Embracer: After hundreds of studios, service providers and brands were bought together at a cost of billions and aggregated under the umbrella of Europe's second largest games manufacturer, the reverse process is now taking place.
Advertisement
Because after the recent spin-off from Gearbox Software (Borderlands) and Saber Interactive, the Swedish games group plans to create three independent, listed units.
- Asmodee Group serves the market with board games, trading cards and tabletop role-playing games. This area includes 23 studios and more than 300 brands or licenses such as Catan.
- Coffee Stain & Friends includes the actual core business with PC, console and mobile games, divided into two divisions: Premium and Free2Play. In addition to Coffee Stain, the new AG also houses Ghost Ship, Tarsier, Tuxedo Labs, Amplifier and the Viennese publisher THQ Nordic, one of the largest game developers in German-speaking countries. The listing on Böse is scheduled to take place in the calendar year 2025.
- Middle Earth Enterprises & Friends markets that Lord of the Rings-Universe (The Lord of the Rings) as well as Tomb Raider. This group also includes Crystal Dynamics, Dambuster Studios (Dead Island 2), Eidos Montreal, Flying Wild Hog Studios, Vertigo Games, Warhorse Studios (Kingdom Come Deliverance 2) and 4A Games (Metro) as well as the Munich publisher and distributor Plaion.
The surprising move marks a 180-degree turnaround that is in complete contrast to the previous strategy. Embracer justifies the project with a stronger focus on the respective market and its business models as well as a better 'story' for existing and future shareholders. To relieve the burden on the other two business areas, Embracer is outsourcing a mountain of debt of more than €900 million to the highly profitable board game division Asmodee, which was previously considered a potential sales candidate.
Now that the major shareholders (above all Saudi Arabia) have already signaled their approval, the restructuring is considered a formality. Embracer founder, CEO and major shareholder Lars Wingefors reiterates his commitment to remaining invested in the long term in an open letter: The Swede controls 20 percent of the company and 40 percent of the voting rights.
There are intensive months behind the Embracer Group workforce – including a tough austerity program with job cuts, restructuring, project stops and location closures, which also affected German subsidiaries such as Black Forest Games, Fishlabs and Piranha Bytes. Embracer shares have lost more than 80 percent of their value over the past three years, but have recently recovered somewhat.
Post is continually updated
