J. Clement
Research lead covering internet and gaming
Embracer Group - Statistics & Facts
Despite being one of the largest video gaming and media holding companies worldwide and owning hundreds of IPs via its dozens of gaming studios, the Embracer Group is currently serving as a cautionary tale of growing too much, too fast in times of abundance, and now having to deal with the consequences. At its peak in mid-2022, Embracer owned close to 200 gaming studios before drastically cutting down on this number to arrive at 150 studios in the summer of 2024. But how did all of this happen?
In June 2022, Savvy Games Group — a company fully owned by Saudi Arabia’s Public Investment Fund (PIF) — made a significant move by investing approximately 1 billion U.S. dollars in Embracer Group, securing an 8.1 percent stake in the gaming conglomerate. In May 2023, it was announced that the Embracer Group had initially agreed to a 2 billion U.S. dollar investment deal with an unnamed party in October 2022. However, despite prolonged negotiations, that deal fell through as the investing partner decided to walk away. It was later revealed that this unnamed partner was the Savvy Games Group. The failed deal led to a 40 percent crash of Embracer Stock and found the gaming conglomerate 1.6 billion U.S. dollars in debt.
To battle this deficit, Embracer Group announced a large-scale restructuring program focused on cost reduction, comprising studio closures, layoffs, divestments, and numerous project cancellations through 2024. Some companies, including Saber Interactive, Shiver Entertainment, and Gearbox Entertainment, were sold off, while other subsidiaries, including Square Enix Montréal, Volition, and Pieces Interactive, were outright shuttered.
The Embracer Group, which was previously known as THQ Nordic, is no stranger to rebranding. As of mid-2024, it has also managed to pay down a portion of its debt. However, it remains to be seen if the company split will be successful or if, when divided, the Embracer Group will ultimately fall.
Embracer Group company financials
In the fiscal year 2023/2024 (ending March 2024), the net sales of Embracer Group came to 42.2 billion Swedish kronor. While representing a growth in revenue compared to the previous year, the annual operating loss of Embracer during that period amounted to more than 20 billion Swedish kronor, and the final net result of the company for the year did not look much better. Despite being a gaming-focused company, Embracer’s PC and console gaming segment lagged its tabletop gaming business in terms of annual revenue share in the 2023/24 fiscal period . Within its four operating segments (PC/Console Games, Mobile Games, Tabletop Games, and Entertainment and Services), the Embracer Group is currently home to 11 operative groups.Rapid expansion during COVID, followed by crash after the deal that wasn’t
Between 2019 and 2022, the Embracer Group expanded rapidly through M&A activities, supported by the COVID-19-related boom of the video gaming market. According to the company, this scale of acquisitions was intended to diversify the company’s portfolio, contrasted with the reliance of larger publishers like EA or Activision Blizzard on a few core titles.In June 2022, Savvy Games Group — a company fully owned by Saudi Arabia’s Public Investment Fund (PIF) — made a significant move by investing approximately 1 billion U.S. dollars in Embracer Group, securing an 8.1 percent stake in the gaming conglomerate. In May 2023, it was announced that the Embracer Group had initially agreed to a 2 billion U.S. dollar investment deal with an unnamed party in October 2022. However, despite prolonged negotiations, that deal fell through as the investing partner decided to walk away. It was later revealed that this unnamed partner was the Savvy Games Group. The failed deal led to a 40 percent crash of Embracer Stock and found the gaming conglomerate 1.6 billion U.S. dollars in debt.
To battle this deficit, Embracer Group announced a large-scale restructuring program focused on cost reduction, comprising studio closures, layoffs, divestments, and numerous project cancellations through 2024. Some companies, including Saber Interactive, Shiver Entertainment, and Gearbox Entertainment, were sold off, while other subsidiaries, including Square Enix Montréal, Volition, and Pieces Interactive, were outright shuttered.
Plans for split and restructure
In addition to cutting costs at every possible opportunity, in April 2024, the Embracer Group announced another ambitious agenda: within two years, the company was going to split into three standalone publicly listed companies and revealed plans for an AA/indie video games enterprise under the name Coffee Stain & Friends, a board game business under the Asmodee Group, and a company to manage its library of licensed intellectual properties including those of Tolkien's Middle Earth, Tomb Raider, and other AAA-level franchises.The Embracer Group, which was previously known as THQ Nordic, is no stranger to rebranding. As of mid-2024, it has also managed to pay down a portion of its debt. However, it remains to be seen if the company split will be successful or if, when divided, the Embracer Group will ultimately fall.
