Rectify Gaming

Embracer Group Presses On Overspending For Its Titles, More Studio Closures Could Be On The Horizon

Posted on September 26, 2023 by Nick Moreno

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One of the biggest publisher conglomerates is now searching for ways to cut the fat off of its investments. Previously, Embracer Group was regarded as a cash cow as the firm announced continued acquisitions – sometimes over a handful at a time – periodically, and gulped up even AAA firms like Gearbox Software & Crystal Dynamics/Eidos-Montreal. However, the current state of the firm is showing to be in a grim state financially.

According to a previous report, it was confirmed a multi-billion dollar deal fell through which led to a new restructuring plan. A later earnings report shared a new initiative which would cancel projects and even close operating studios as well. One victim of this decision in a surprising reveal happened to be Volition which just celebrated being in business for more than three decades.

Now according to CEO Lars Wingefors, he speaks on repurposing of operations and reflects on where Embracer Group can collect itself moving forward. During the Annual General Meeting Q&A recently, Wingefors elaborates on how overspending for platform fees and plans to look into the Epic First Run program to minimalize this further. You can view the segment of the discussion in the video below:

[Timestamp 1:37:50]

“At the end of the day I think it’s good having competition to Steam, because it puts them on their toes to deliver their best experience. Obviously, we would like to pay less fees to platforms. In reality, we are paying more fees to platforms than we spend on game development every year, and if you just think about that number, it’s crazy,” Wingefors says.

“So, there are margins with the platforms that I would preferably have within building more games and some more margins, but I think it’s great that Epic is there trying to build a competitive platform. At the same time, consumers are perhaps looking at things differently, that they want to be able to pick their platform, so there are many different perspectives to that, and I don’t want to go too deeply into that, but I think competition in general is great.”

Elsewhere during the Q&A, Wingefors also speaks on the concern of more studios closures. Ultimately, he expresses that more potentially could be on the table now with its restructuring plan in effect. “Ultimately we are making decisions to either restructure or downsize some teams, and there will be a few cases of closures. It’s difficult and it takes time, but we announced this in June and now we’re at the end of September and we’re confident to deliver on the targets we set out for the end of the fiscal year.”

What surprises you most from Wingefors’ comments?

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