Embracer is done with their long-term restructuring.
As reported by GamesIndustry.Biz, Embracer’s CEO Lars Wingefors officially made this announcement in the company’s latest financial call. And yes, Wingefors really had to explain this to their own investors. This is what Wingefors told them:
“We are getting approached… on a weekly basis by companies that would like to acquire certain assets within the group.
And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward.”
Wingefors also confirmed that the divestitures of both Saber Interactive and Gearbox Software were ‘two important milestones’ to this process. GamesIndustry later received a statement from Saber when they inquired if the company could still do any layoffs:
“Our commitment to continuously evaluate options to make us more successful as a company remains.
Further, we will come back and summarize the program no later than in connection with the Q4 report on May 23.”
In this wave of layoffs that has hit the video game industry, which affected both Microsoft and PlayStation, and even recently, Nintendo of America, the biggest company that featured the most stunning and outrageous series of layoffs and studio closures was from Embracer Group.
Embracer went through an ambitious acquisition spree of big and small independent video game studios, with the seeming goal of becoming a publisher at the same scale as the likes of Electronic Arts and Activision Blizzard King. It turned out that this acquisition spree was in service of a giant investment the company was counting on. But when that deal did not push through, Embracer was put in a terrible position.
Embracer laid off hundreds of workers, and shut down a few video game studios, including the veteran studio behind the Saints Row franchise, Volition. Another painful cut was their decision to shut down the TimeSplitters revival that they had set up. Doing this included closing the studio that Embracer brought back to life with many original employees, Free Radical. It’s noteworthy to point out that Embracer still owns the IP.
Many of us gamers and even games press have villainized Embracer for all this. While it’s true that Embracer and their bad choices are responsible for this state of affairs, they are hardly the only company that has gone on an acquisition spree of game studios.
We can point to many examples, but the one we will look to here is Electronic Arts. Their acquisition of Westwood, Bullfrog, and Origin Systems, all the way back in the 1990s, was criticized as a “buy and assimilate” strategy, by, of all people, their CEO John Riccitiello in 2008.
Riccitiello claimed that consolidation was an unavoidable reality of the video game industry. Indeed, under his watch, EA acquired Maxis and Bioware. These moves from EA that go all the way back do seem to support the claim that these consolidations and studio closures are an inevitable part of the cycles of the video game industry.
