Recently, many fans of Crystal Dynamics are eager to see what is on the horizon from the developer. Previously, it was revealed that the team would be acquired alongside Eidos-Montreal by Embracer Group. Since then, little has been revealed on the matter for its projects. One major nod came with the official end of content for Marvel’s Avengers announced earlier this year.
Additionally, Crystal Dynamics confirmed a new Tomb Raider game is on the way. Alongside the new Unreal Engine 5 project, the team is also occupied with its effort in support on The Initiative’s Perfect Dark Remake. The team did press in a previous earnings call that the work is progressing smoothly on the Xbox Game Studios title.
But in a new announcement this week, Embracer Group has launched a new restructuring initiative which will redirect its focus from a “heavy-investment-mode to a highly cash-flow generative business” resulting in layoffs at the firm. It is speculated the decision was executed following the recent fallout on a $2 billion deal, Axios Gaming reported last month.
During the past years, Embracer invested significantly both in acquisitions and into a strategy of accelerated organic growth. We have acquired some of the world’s leading entertainment IP and we have invested into one of the largest pipelines of games across the industry. The program presented today will transform us from our current heavy-investment-mode to a highly cash-flow generative business this year.
It will enable us to meet the worsening economy and market reality as a strong company and it will fundamentally change our prioritization of growth with raised capital towards optimization and growth based on our own cashflows. The program will lower our net debt significantly. After completion of this program, we will generate growth in profitability with less business risk and with higher margins in the PC/Console segment over the coming years. This, in turn, will give us the freedom to continue to grow and deliver the high-quality experiences our players really value.
The program is divided into different phases until March 2024 with focus on cost savings, capital allocation, efficiency and consolidation. The initial phase, which is initiated immediately, mainly targets cost savings across the group. The next phase, which also starts immediately, will require further analysis to determine specific actions. The last phase will focus on internal consolidation, further resource utilization and more synergies across the Group.
The actions for each affected company will be implemented by the new interim COO and CSO in collaboration with each operative group CEO and management teams. Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this.
lars Wingefors, Embracer Group CEO
“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,” Wingefors adds.
However, Crystal Dynamics in a response letterhead via Twitter does verify that the team and its current projects will not be affected by the notion. “We want to reassure fans that there will be no impact to our continuing efforts with our partners at The Initiative on Perfect Dark, or our next Tomb Raider title being developed in collaboration with Amazon Games.”
In regards to the current Crystal Dynamics projects, one rumors might shed light on when to expect the new games. That is Perfect Dark Remake is roughly one year ahead in release to the new Tomb Raider title over at Amazon. You can read the full report by heading here.
What do you think on the new development for Embracer Group?
Source: Embracer Group
