Embracer has revealed that they are writing down 15 of the video games they are working on.
As reported by Video Games Chronicle, these said games are coming from Amplifier, Freemode, Gearbox, Plaion, Saber Interactive and THQ Nordic.
This is part of Embracer’s ongoing restructuring of the company, which they state will be ending by March 2024. Unfortunately, Embracer confirmed with investors that “further restructurings, closures, buyouts, are in process, and that will lead to additional headcount reductions.”
But first, let us briefly return to the idea of a write-down. What does that mean, and what does this choice mean for these video games?
To quote Investopedia, “A write-down is performed in accounting to reduce the value of an asset to offset a loss or expense. A write-down becomes a write-off if the entire balance of the asset is eliminated and removed from the books altogether.”
Investopedia then shares the example of a burned warehouse. If there are still goods in that warehouse that can be used after the fire, the company can write-down those assets. If nothing can be salvaged and the value of the items in the warehouse are down to zero, then the company can write-off those assets completely.
Applying that to Embracer, because the parent company is short of cash, it’s going to make up for it by taking money away from these 15 games. These games are not being cancelled, at least not yet. These write-downs will lead to these games becoming considerably smaller projects, with potentially shorter timeframes to complete, and also potentially less staff to work on them.
This doesn’t eliminate the possibility that these games could get cancelled sometime later. At least, for now, Embracer is saying these games are still going to get made.
One may note some games under Embracer’s umbrella aren’t part of this write down. For example, the next Tomb Raider game that we know is in development, is not getting cancelled or written down, even though the company making it, Crystal Dynamics, did have layoffs.
That’s because the project is being bankrolled by Amazon, who also bought the rights to the Tomb Raider franchise. So there are certain circumstances where Embracer’s restructuring won’t adversely affect some of their projects.
While other game companies were compelled or forced to lay off employees, their circumstances were not as dire as Embracer’s. Embracer happened to have very recently acquired a lot of successful independent developers and publishers. Now, because of their mistakes, those developers and publishers are at risk. Other game companies are more capable of letting game companies go without having to shut them down, or keeping employees after closing the studios they were in.
GameRanx wishes the best for current and previous employees of Embracer and we hope those who were laid off can find jobs back in the industry.