Embracer Group faces a stark reality: the company that sustains THQ Nordic, Plaion o Gearbox Software among many other studies and that not too long ago was done with Crystal Dynamics and its portfolio of million-dollar sagas such as Tomb Raider has started through what defines a restructuring program a whole series of measures to make your assets profitable. A process that will require cancel projects and close studies. And, along the way, give priority to some franchises over others.
Through an open letter Signed by Lars Wingefors (CEO of the company) and a subsequent communication with its shareholders, Embracer has been clear with the current state of the group and has assumed both the cost of its expansion and the modest reception of several of its key projects. And although no specific names have been specified, cases such as the recent Saints Row reboot or the highly problematic development of the highly anticipated remake of Star Wars: Knights of the Old Republic give us a perspective on the situation.
As they explain, in the end everything is based on looking for turn heavy investments into profits to be able to sustain a really large group at a European and world level. To this end, the proposed program between now and March 2024, which will affect the entire Embracer structure, will focus on cutting costs and being more restrained with budgets.
Or, as we said a little above and it is clear in the letter from Lars Wingefors, evaluate each case and determine which studies and projects will continue to be active.
It is painful to see such talented members of our team go. Our people are the very fabric of Embracer. We understand and respect that many will be concerned and I do not have the answers to all questions. I want to make it clear that decisions about this program were not made lightly.
Is this a step back? It’s definitely a bitter pill to swallow that will compromise the future of entire studios and franchises. But the Embracer Group goes beyond video games: in addition to the Dark Horse Media publisher or the Asmodee board game label, since 2022 it took over Middle-earth Enterprises and, by extension, everything related to The Lord of the rings, the hobbit and Tolkien’s work. Being precisely this one of the properties that will be reinforced in the process.
Why Middle-earth and Tomb Raider are out of the woods
According to statements by Matthew Karch in a recently held Embracer Board of InvestorsThe Lord of the Rings franchise is a total priority for Embracer and not only does it fit with the program they will carry out, but the resources invested in it are a better investment than in other proprietary licenses.
We are the owners of The Lord of the Rings, and we know we must explode [esa licencia] in a very significant way and make it one of the biggest gaming franchises in the world. And that’s obviously something that we’re going to be doing.
Lord of the Rings is a much better use of resources than some of the other projects that various of our teams have been working on. Working together we have those opportunities and we are very excited to see it work out relatively quickly.
In fact, and to be fair, It is the key moment to bet heavily on The Lord of the Rings: beyond the expectation generated by the Amazon series, whose second season is running, and the recent launch of the Gollum video game; we’ll see a themed line of Magic cards and Wizards of the Coast productions; a new film bet by Warner and new video games at the hands of studios of different caliber.
In other words: beyond the Embracer restructuring plan, the deployment made in the short, medium and long term for revitalize passion for Middle-earth and Tolkien’s work is enormous. And if we learned anything from the Peter Jackson era, it’s that being late to the phenomenon can be lethal.
It’s not all bad news for Embracer, for the record: 2023 started very well with a Dead Island 2 that was liked and also sold very well (according to the official statement) and the remainder of the year is already pointing ways: Warhammer 40,000 Space Marine 2, Payday 3the Alone in the Dark reboot and a highly anticipated Homeworld 3 are about to come out.
In any case, over the next few days we’ll take a closer look at which studios are affected by Embracer’s turnaround plan and more or less begin to estimate how many announced or unannounced projects will be cancelled. What we do know is that at least one study is out of risk: the recently purchased Crystal Dynamicswho have secured that his work on Perfect Dark and the upcoming Tomb Raider video game (with Amazon Games) is moving forward.
A positive news among so much uncertainty and promises.
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