Swedish gaming giant Embracer Group to cut studios
Illustration: Sarah Grillo/Axios
Swedish gaming giant Embracer Group will undergo a restructuring that will likely include a sale or closure of some of its gaming studios, the company announced Tuesday morning.
Why it matters: Embracer Group was one of the most active dealmakers in the gaming space, with more than 20 acquisitions last year alone valued at more than $1 billion, including the IP for "The Lord of the Rings."
Details: The restructuring will be divided into three phases and last through next March.
- Matthew Karch was named interim chief operating officer and Phil Rogers interim chief strategy officer.
- The company's headcount of 17,000 employees will be reduced, though no specific number was given.
- Going forward, Embracer plans to focus heavily on utilizing its "Lord of the Rings" IP; this comes as Amazon is going into its second season of "The Rings of Power" and Warner Bros. Discovery plans a new set of movies.
The big picture: Embracer Group is reeling after a "transformative" partnership that had been negotiated for months fell apart last month, per Axios Gaming's Stephen Totilo.
- Embracer said the collapse of the mega-deal, the partner of which still has not been revealed, was unexpected. Embracer said it had a verbal commitment in October and described negotiations as "taking far longer than expected."
- The news immediately plunged Embracer's stock by 40%. Year to date, the stock is down more than 47%.
Catch up fast: Along with the rights to "The Lord of the Rings," Embracer's assets include the characters and studios tied to the Tomb Raider franchise.
- The company also accepted a $1 billion investment from the Saudi government-funded Savvy Gaming Group last year.
