Embracer will shut studios and cancel games after $2bn deal falls apart
The period of ceaseless growth and acquisitions has come to an end at Embracer, with the company now stating that they will be closing studios, cancelling games and making redundancies across its 17,000 employee workforce. They’re also going to throw everything they’ve got at turning The Lord of the Rings into one of the biggest video game IPs going.
The decision comes after a $2 billion partnership fell apart last month, which saw the company’s stock drop by 40%, as well as some dismal game releases, such as Saints Row last year. CEO Lars Wingefors published an open letter explaining how the company’s restructuring plan will take place over the coming nine months.
Wingefors says, “It is painful to see talented team members leave. Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position and I don’t have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly. […] I am asking all our managers to lead and act with compassion, respect, and integrity. Throughout each phase and wherever possible, we will work to ensure that affected team members receive information first.”
Given the rate at which the company has acquired other publishers, game developers and IP, one of the key areas that Embracer will be making cuts is in consolidating publishing group efforts, but there will still be an impact to the game studios as well. This is a pivoting point from investing heavily and acquiring companies and IP, to trying to make Embracer a more outright profitable company.
Wingefors explained: “The actions will include, but not be limited to, closing or divestments of some studios and the termination
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