Lars Wingefors, CEO of Embracer Group, looked dejected during his gaming group’s recent earnings presentation. Despite the recent acquisition of the gaming studios behind it deus ex And Tomb Raider at a bargain price, dead island 2 Strong selling and critically acclaimed release, and now owns the rights to it Lord of the RingsEmbracer shares are down today after it was revealed the company lost a last-minute $2 billion game development deal last night.
“Up until last night, we had amazing cash flow from this transaction,” Wingefors said called amid heavy sighs and pregnant pauses during one Q&A on May 24th. Without ever naming the company that dropped out of the $2 billion partnership, he said Embracer had a “really strong commitment” from someone the company trusts. in one press release He wrote that the agreement was a game changer for the company and “set a new benchmark for the gaming industry.”
Embracer for years grab every small publisher and game studio it might find. In 2020 it was Saber Interactive (World War Z). In 2021 it was Gearbox Entertainment (border areas). And in 2022 it was Crystal Dynamics (Tomb Raider) and Eidos Montreal (deus ex, Thief). Sometimes the results have been mixed. Last years Saints Row The reboot had its moments, though started in a sad state. Sometimes it worked. dead island 2which spent years in development hell and traded from one studio to the next, came out last month and did actually quite neat.
The big question now is who Embracer wanted to partner with and for what. Wingefors said the company had been working on the deal since last fall, hundreds of specialists were involved on both sides and they firmly believed that despite some logistical challenges everything would work out. The list of companies that could likely afford even a $2 billion commitment is quite small.
Sony, with its penchant for PS5 exclusives, is a possibility. Microsoft, which is much needed new blockbusters for Game Passis another (Crystal Dynamics is also currently involved in the first-party Xbox exclusive, Perfect dark). Huge Chinese corporations like NetEase and Tencent could also be candidates, or maybe even a US tech giant like Amazon or Netflix, both of which are looking to add gaming content to their streaming and entertainment businesses. Embracer acquired the rights to it Lord of the Rings for $770 million last Augustjust before talks about the deal apparently started.
Whoever spooked Embracer, the Swedish holding company is in a tough spot. The stock price plummeted nearly 45 percent within a single day of the news. There are also a number of internal game lags. A remake of Star Wars: Knights of the Old Republic Originally produced at Aspyr, Austin-based studio Embracer, which was bought for $450 million in 2021, was reportedly struggling last year. We also have another appointment metro Shooter from 4A Games, although the studio is based in Kiev, Ukraine, where the war with Russia is in its second year.
