Swedish holding company Embracer Group, which owns Aspyr, Deep Silver, Gearbox, Plaion, Saber and THQ Nordic and has been buying up game studios everywhere in recent years, announced about a large-scale restructuring that will have unpleasant consequences.
The restructuring aims to reduce costs, provide capital, increase efficiency and consolidate. The initiative would entail downsizing, closing (or selling) studios, and canceling unannounced games.
From Words According to Embracer CEO Lars Wingefors (Lars Wingefors), the restructuring will take place in several phases (the first has already started) and will last until March 2024.
The measures planned as part of the restructuring are:
- the introduction of interim positions of Chief Operating Officer and Director of Strategy – these are Matthew Karch, CEO of Saber Interactive, and Phil Rogers, CEO of Crystal Dynamics;
- reduction in corporate, publishing and commercial, general and administrative expenses;
- studio closures and cancellations of unannounced projects with poor payback projections;
- Creating a more comprehensive centralized process for game investments and performance analysis while maintaining creative freedom;
- Reduce investment in third party development and focus on supporting their own studios and franchises;
- Increase external funding for high-budget games developed by internal studios.
In an open letter accompanying the announcement, Wingefors emphasized that the restructuring will help become Embracer “a leaner, stronger, more focused and self-sufficient company”.
“The program presented will take us out of a high investment regime, make us a high-margin company this year, and enable us to weather a deteriorating economy and deteriorating market realities.”Wingefors is sure.
At the same time, Wingefors says Embracer is looking forward to a successful current fiscal year: Dead Island 2 has exceeded management’s expectations and a number of big games are on the way, including Remnant 2, Warhammer 40,000: Space Marine 2 and Payday 3.