Embracer Group May Sell Studios Before ‘Restructuring’ Ends

Embracer may sell some studios before this is all over.
Borderlands 3 Enemy With Weapon
Image: Gearbox Software

Embracer Group has been well known for its cancellations and layoffs in recent months. It seems like this isn’t at an end because it announced plans to sell off additional investments as its ongoing restructuring program nears completion. It looks like we will have to watch another cold-hearted move from the company, which may hurt developers.

In an official announcement, Embracer’s CEO, Lars Wingefors, stated the company had a commitment to “maximizing shareholder value.” This is the driving force behind these decisions. In the company’s latest financial report, Wingefors acknowledged they are unlikely to reach their original target of net debt below SEK 8 billion by March 31st, 2024. However, he expressed confidence that “certain divestments” could significantly reduce debt in the coming year.

This announcement follows reports suggesting Gearbox Software, developer of the Borderlands franchise, could be up for sale. Embracer has not confirmed these rumors, but it aligns with their intention to divest certain assets. Additionally, the company has already laid off over 8% of its workforce (roughly 1,387 jobs) and canceled 29 games in the past year, drawing criticism for its impact on employees and the industry.

“Certain companies might initiate restructuring before any divestment is announced. Our overruling principle is to always maximize shareholder value in any given situation. We are unlikely to reach the restructuring program target of below SEK 8 billion in net debt by March 31.”

Embracer Group Release

Despite the controversy, Embracer’s financial report showed some positive aspects. Net sales increased by 4% in Q3, driven by strong performance in their Mobile, Tabletop, and Entertainment & Services segments. Additionally, the company is nearing the end of its restructuring program, which aims to improve efficiency and cash generation. This program includes reducing capital expenditures and consolidating operations.

While Embracer claims its future game portfolio will prioritize established IPs and studios, its recent actions raise questions about its long-term strategy. The potential sale of Gearbox and ongoing divestments suggest a continued focus on financial optimization, while studio closures and project cancellations highlight the human cost of these decisions.

Public companies tend to prioritize how something looks over how it does because their profit comes from perceived success. There are plenty of videos to show you how this can hurt everyone(Enron and the South Sea Bubble), but this often helps companies. Private companies need to make money to make a profit, so they tend to be less inclined to hurt the workforce. We’ll have to see what Embracer does next, but it feels like we may have to sit through another disheartening news run before it’s over.

Jorge A. Aguilar

Jorge A. Aguilar

Jorge A. Aguilar, also known as Aggy, is the current Assigning Editor.

He started his career as an esports, influencer, and streaming writer for Sportskeeda. He then moved to GFinity Esports to cover streaming, games, guides, and news before moving to the Social team where he ended his time as the Lead of Social Content.

He also worked a writer and editor for both Pro Game Guides and Dot Esports, and as a writer for PC Invasion, Attack of the Fanboy, and Android Police. Aggy is the former Managing Editor and Operations Overseer of N4G Unlocked and a former Gaming editor for WePC.

Throughout his time in the industry, he's trained over 100 writers, written thousands of articles on multiple sites, written more reviews than he cares to count, and edited tens of thousands of articles. He has also written some games published by Tales, some books, and a comic sold to Telus International.

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