Embracer Group Announces Its Split Into Three Different Companies
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Embracer Group Announces Its Split Into Three Different Companies

Those who closely follow the video game industry will recognize almost immediately the name of a particular company: Embracer Group. Five years ago, this company began to make headlines due to its strategy of constantly acquiring different studios, but since last year it has been making headlines of a different kind, as Embracer Group is the name most associated with waves of layoffs that have been hitting the gaming industry.

Embracer Group Is Divided Into Three Companies

Now the company has announced a drastic change in its structure, as it will no longer be Embracer Group and will be divided into three different companies. The news was announced through a statement released by the company explaining what this separation entails.

The three companies will be Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. According to the statement, Asmodee Group will focus on board games and is currently working on projects based on The Lord of the Rings, Marvel, Game of Thrones, Star Wars, and more.

Coffee Stain & Friends will focus on independent and free-to-play games, with control of studios like Coffee Stain, Ghost Ship, and THQ Nordic, and properties like Deep Rock Galactic, Goat Simulator, and Satisfactory. Finally, Middle-earth Enterprises & Friends will handle AAA projects with studios like Crystal Dynamics, Dambuster Studios, Eidos Montreal, and properties like The Lord of the Rings, Tomb Raider, Dead Island, Kingdom Come Deliverance, and more.

Lars Wingefors, who has served as CEO of Embracer Group until now, will be the owner of the three new companies. The executive described this strategy as a way to “unleash the full potential of each team and provide them with their own leadership and strategic direction.” This split would mark the end of Embracer Group’s restructuring stage, which was announced in the middle of last year after the company failed to finalize a $2 billion deal.

At that time, the announcement detailed that the restructuring would be completed by March 2024, so many expect that this final move will not result in even more layoffs than there already were. As a result of this company restructuring, Embracer Group laid off nearly 1400 employees as part of that restructuring, in addition to canceling around 29 different games.

How Will Everything Be Managed & Directed Now That It’s Separated?

The current proposal from the Board of Directors suggests that, before becoming three entities, the operations of Asmodee and Coffee Stain & Friends will be distributed among the shareholders of Embracer Group and listed on Nasdaq Stockholm, while Middle-earth Enterprises & Friends will remain within an Embracer Group that doesn’t disappear but gradually takes on a new form.

From here, the process focuses on three points to ensure the independence of the three new entities, which will affect everything that was under the Embracer umbrella.

  • Board games, role-playing games, cards, and other publishing and entertainment elements, as well as non-blockbuster video game projects, will each operate separately from the current Embracer Group as independent companies.
  • In the process, Embracer itself commits to providing a sustainable long-term foundation for the new Asmodee and Coffee Stain & Friends by reviewing the entire capital structure, including assets and debt.
  • Lastly, the major studios, publishers, and franchises will remain in the current company as part of Middle-earth Enterprises & Friends. This retains, for practical purposes, all the activities of Embracer that are not related to the traditional gaming or video game business with simpler and controlled development costs.

In any case, this ensures that major investments (and risks) in video games do not affect the development of other studios or companies dedicated to other branches of entertainment or simpler projects deserving the same attention. Meanwhile, the greatest values continue to be capitalized upon.

Unfortunately, that restructuring also led to the complete closure of studios like Volition, Campfire Cabal, and Free Radical Design, while other studios like Gearbox and Saber Interactive had to be sold.


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