Swedish gaming conglomerate Embracer Group will undergo a major restructuring that will require it to close several studios and cancel a number of games. The news came shortly after the publisher’s $2 billion deal unexpectedly fell through, writes Polygon.
According to the company’s CEO Lars Wingefors, the restructuring is divided into three phases and is expected to last until March 2024. The nature of these stages is still unclear, but as part of the restructuring, it is planned to reduce the debt to below 10 billion crowns (about $930 million).
“Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this,” noted the publisher’s CEO.
According to the company’s interim chief operating officer, Matthew Karch, the first phase of the cost reduction will be immediate and visible. That is, it is about laying off a certain number of Embracer Group employees as part of this process.
At the same time, he added that studios that do not work properly or do not create games according to the standards of the conglomerate will be closed. Embracer Group clarified that the projects affected by the closure have not yet been announced and have a low projected return on investment.
As you know, last year Embracer Group acquired several more companies (Killing Floor developer Tripwire Interactive and Limited Run Games) and the intellectual property rights to Lord of the Rings and The Hobbit. This means that it now controls all the movies, video and board games, merchandising, etc. that belong to these franchises. Recently, the company planned to implement a deal worth $2 billion, but it failed at the last minute. That forced Embracer to cut its profit forecast to $655-$840 million.
Currently, it is not known whether this restructuring will affect the authors of the Metro series of the Ukrainian-Maltese studio 4A Games, which from 2020 is also part of the Embracer Group.