Following various cuts and divestments, troubled videogame firm Embracer Group is splitting into three separate companies.
In the latest shakeup at Embracer, the embattled Swedish holding company is to split into three separate entities. All three will be listed on the Swedish stock market, but none will carry the old Embracer name – and tellingly, none will be headed up by its CEO, Lars Wingefors.
The first of the three, called Middle-earth Enterprises & Friends, will be a “creative powerhouse of AAA game development,” according to Embracer’s announcement, and will be the entity that holds the valuable rights to Tomb Raider and The Lord Of The Rings.
The second company, Coffee Stain & Friends, will focus on indie and mid-budget games for PC and mobile; the third, Asmodee, will concentrate on publishing tabletop games.
It’s a drastic-sounding move, and a sign of just how difficult the past year has been for the once industry-dominating firm. At its peak, Embracer was buying up studios and properties all over the place, while investors were pumping in billions of dollars. It was when one particular deal unexpectedly fell through in the summer of 2023 – a deal said to have been worth some $2bn – that the cracks began to show.
Read more: Embracer Group | The giant that has changed the videogame industry, for better or worse
As share prices tumbled, Embracer announced a major restructuring programme in order to reduce costs and restore shareholder confidence. In the months since, Embracer has continued to cancel projects, lay off staff and sell certain studios in its portfolios; Saber Interactive and Gearbox were both flogged off in March for $247m and $460m respectively.
Time will tell whether the split will help save Embracer or whether it’s the latest stage in an ongoing downward spiral. Wingefors, who will remain as a shareholder according to Kotaku, is retaining an upbeat tone in a latter to staff. “The time is right for Embracer to become three public companies,” he writes, “each boasting significant scale, coherent strategies, specialised business models and empowered by visionary leadership teams.”
