Lars Wingefors on why Embracer is going away, and what happens next
When Embracer CEO Lars Wingefors declared an end to the company's nine-month restructuring program at the start of this month, you would have been forgiven for assuming that things would finally settle for the troubled games group.
That assumption was brought into question on Monday when the company announced it would be splitting into three separate entities: Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends (with new official names for the latter two to be revealed at a future date).
GamesIndustry.biz caught up with Wingefors mere hours after the announcement to talk through its implications, the future of the three companies, and why – after the years-long aggressive M&A push that grew the Embracer empire – he has decided to now break it apart.
The CEO tells us the split enables Embracer to "better finance our businesses" and "lower the cost of capital." And shareholders clearly approve, since Bloomberg reports the company's stock rose 18% after the news emerged.
"We would like to create the optimal environment and conditions for our businesses to be successful for us to make the absolute best products and to hire and retain the best people," he says. "And we need to have the optimal structure for those companies to prosper within. We are a public company and the current structure within Embracer Group in the current environment is not optimal.
"To create successful games, and to retain and hire people, the company needs to have that environment, and the environment for Embracer – and similar companies for that matter – has changed a lot. We had a number of years, 2019 and 2020, where the cost of capital was really cheap and the willingness from investors to invest into growth organically and inorganically via M&A was endless. We also had a gaming market booming, especially during COVID, and we had a much more solid geopolitical situation, for example, in Russia. All those factors have changed a lot."
This, he says, is why Embracer announced
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