Embracer Group is falling apart after buying everyone

Swedish mega-company Embracer Group has announced a major restructuring program, with layoffs and cancellations incoming. It’s a story we've heard before; a giant company out to buy everyone that soon stutters, falters and ends with everything quickly falling by the wayside.

In a huge announcement, CEO and co-founder of Embracer Group, Lars Wingefors said the restructuring program "will enable us to better optimize the use of four resources.”

Wingefors explained the company is “initaiting multiple actions to strengthen… cash flow generation and leverage our portfolio of IPs to become a stronger company.”

Among the many actions that the plan will include, Embracer Group mentions "the closing of studios and termination of projects that have not yet been announced and with low projected returns". Other actions are "reduction of investements into external development" and "increased funding of internally developed big-budget games".

The news comes just a few weeks after a mysterious $2 billion deal for the Swedish group fell through. The CEO mentioned that the cancellation of the deal came as a surprise for the company as well. The cancellation also sent the company' stock crashing down by a massive 40%.

The Embracer Group had been busy, voraciously buying out studios left and right. In 2021, they bought Borderlands’ publisher Gearbox for $1.3 billion. Along the way, they also picked up Crystal Dynamics, Eidos Montreal and Square Enix Montreal in a $300 million deal that granted them access to IPs such as Deus Ex, Thief, Legacy of Kain and Tomb Raider.

Reactions from the public have been quite vitriolic. Some say with many claiming the company isn’t going to leverage its portfolio of IPs and talented studios. Others commented on being legitimately angry about Embracer's irresponsible overspending that will see studios face closure and layoffs.

While it is not known which projects have been cancelled or which studios are going to be closed down, it remains to be seen what will happen to Embracer Group. Still, we cannot say that we are completely taken by surprise by the news, as the old saying goes "the bigger they are...".