After buying so many studios, Embracer Group now plans to shut some of them down after a $2billion deal fell through in May.
There was a time when Swedish firm Embracer Group wasn’t a particularly well-known name. However, it’s grown at a surprisingly quick rate thanks to multiple acquisitions, such as all of Square Enix’s Western studios, within a short time span.
Just this past February, it claimed to have 96 projects planned for the next financial year, including 31 AAA titles.
Things have changed quite drastically in the following months, though, as the company admits that it is undergoing restructuring efforts, which means cancellations and layoffs are inbound.
This comes after Embracer revealed last month that plans for a major $2bn deal had fallen through. What it was for was never explained, but the company had to slash its earnings forecast and its shares dropped by more than 40%.
While Embracer assures that ‘all announced significant releases’ are coming out as planned, many unannounced projects will now never see the light of day.
Embracer is also looking into outright shutting down some of its studios. Which ones will be affected is unclear but it has a long list of subsidiaries, some of which it only bought within the last couple of years.
The company has close to 17,000 employees and CEO Lars Wingefors acknowledges that that number will have dropped by the end of the year. However, in an open statement on the company’s website, he says it’s too soon to tell how many people will be let go.
‘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,’ writes Wingefors, pledging that they will do what they can to find new roles for affected employees elsewhere within the company.
The one studio that won’t be feeling any of this is Crystal Dynamics. In its own statement from Twitter, it assures that its next Tomb Raider game, plus its Microsoft partnership on the Perfect Dark reboot, will not be impacted.
Despite all this talk of cancelled projects and redundancies, the recently promoted interim chief operating officer Matthew Karch has told investors that there are plans to ‘exploit’ the Lord Of The Rings franchise and pump out multiple titles.
Embracer acquired the rights to Lord Of The Rings last year and considering how big of a franchise it is, Karch says they want to also make it ‘one of the biggest gaming franchises in the world,’ adding that new Lord Of The Rings games are a much better use of resources than some of the company’s other projects.
‘We own Lord Of The Rings, and we know we need to be exploiting Lord Of The Rings in a very significant fashion and turning that into one of the biggest gaming franchises in the world. And that’s obviously something we’re going to be doing,’ he says in an investor’s call.
‘That’s a much better use of resources than some of the other projects that some of our teams have been working on.’
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