Embracer Group to shutter studios, cancel projects and reduce headcount

The Swedish-based video game group, which received investment from Saudi Arabia in 2022, has announced plans to scale back its operations in an open letter by CEO, Lars Wingefors.

This morning we announced a restructuring program across the Embracer Group that will make us a leaner, stronger and a more focused, self-sufficient company,” reads the statement.

“The actions will include, but not be limited to, closing or divestments of some studios and the termination or pausing of some ongoing game development projects.

“It will also include decreased spending on non-development costs such as overhead and other operating expenses. We will reduce third-party publishing and put greater focus on internal IP and increase external funding of large-budget games.”

Details on which specific projects will be affected are unclear at this stage. In our opinion, it reads as if titles with a smaller scope will be less of a focus in order for the company to make the best use of its pricey licencing deals, such as the recently secured Lord of the Rings franchise or Lara Croft Tomb Raider.

With the scaling back of operations comes a reduction in headcount for Europe’s largest gaming company, which at one point had a market capitalisation of $11 billion.

It also failed to secure a ‘transformative’ $2 billion partnership deal in May, according to Axios.

“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,” continued Wingefors.

“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.

Embracer Group is a bold consolidation programme, made up of around 250 smaller companies, covering gaming, entertainment and even tabletop board games.

It owns publisher PLAION, formerly Koch Media, which in turn owns Milestone, developers of the MotoGP, SBK, Ride, Hot Wheels Unleashed and Monster Energy Supercross titles.

Saber Interactive is also part of the Karlstad-headquartered behemoth, where Saber Porto’s Dakar Desert Rally spawns from, alongside THQ Nordic which encompasses the likes of Wreckfest, Wreckreation, Jected Rivals and MX vs ATV.