Embracer is planning on splitting into three separate companies

by Benita

Despite
previously
saying
that
it
had

finished
its
restructuring
process,
Embracer
has
announced
a
massive
shift
in
its
business:
the
company
intends
on
splitting
into
three
separate
companies,
each
run
independently
of
the
others.

Embracer
announced
this
latest
undertaking
this
morning
in
several
press
releases
detailing
how
the
company
will
become
Middle-earth
Enterprises
and
Friends,
Coffee
Stain
and
Friends,
and
Asmodee
Group.
Each
new
group
will
be
listed
separately
on
the
Stockholm
stock
exchange,
and
it
was
noted
that
each
group’s
name
may
yet
be
changed.

https://platform.twitter.com/widgets.js

The
existing
Embracer
Group
is
to
be
renamed
to
Middle-Earth
Enterprises
and
Friends
and
will
essentially
be
the
triple-A
focused
company,
with
the
likes
of
The
Lord
of
the
Rings
and
Tomb
Raider
coming
under
its
purview.
Embracer
describes
it
as
a
“creative
powerhouse
in
AAA
game
development
and
publishing
for
PC
and
console,
as
well
as
the
stewards
of
The
Lord
of
the
Rings
and
Tomb
Raider
intellectual
properties”.

The
likes
of
Crystal
Dynamics,
4A
Games,
Tripwire,
Vertigo
Games
and
Warhorse
Studios
will
all
fall
under
the
new
Middle-Earth
Enterprises
and
Friends
group,
along
with
Dark
Horse
Comics.
That
means
IP
like
Metro,
Dead
Island,
Kingdom
Come:
Deliverance
and
more
will
be
developed
and
published
under
Middle-Earth.

The
Asmodee
Group
will
peel
off
from
Embracer
within
the
next
12
months
and
will
continue
its
focus
on
tabletop
gaming.
It’s
through
Asmodee
that
Embracer
also
announced
it
had
entered
into
a
new
financing
deal
with
JP
Morgan,
BNP
Paribas,
SEB,
Societe
Generale
and
Swedbank
for
a
total
of
EUR
900
million.
Embracer
describes
this
as
“important
part
of
the
debt
refinancing”.

Embracer
has
been
suffering
from
a
massive
debt
crisis
ever
since
a
massive
deal
with
Saudi
Arabia
fell
through,
and
has
resulted
in
Embracer
shutting
down
studios
and
laying
off
staff.
Of
course,
taking
on
more
debt
to
tackle
existing
debt
reeks
of
irony,
but
in
the
business
world
it
makes
sense.
Indeed,
even
in
the
regular
world
of
us
mere
mortals
it’s
a
commonly
used
tactic
–
think
moving
a
credit
card
balance
to
another
card.

As
for
Coffee
Stain
&
Friends,
it
will
split
off
in
2025
and
operate
under
two
segments:
premium
and
free-to-play,
and
it
described
as
being
the
indie/doube-A
group.
It
will
be
made
up
of
Coffee
Stain,
THQ
Nordic,
Amplifier
Game
Invest,
Ghost
Ship,
Tarsier,
Tuxedo
Labs,
and
more.
In
terms
of
games,
the
lineup
includes
Deep
Rock
Galactic,
Wreckfest,
Teardown,
Star
Trek
Online
and
many,
many
more.

This
move
could
be
a
stroke
of
genius
that
will
help
Embracer
finally
get
back
on
track.
On
the
other
hand,
the
decision
to
split
into
three
smaller
groups
could
also
be
viewed
as
a
method
to
attract
potential
buyers.
This
is,
of
course,
purely
speculative.


“This
move
has
been
made
with
the
intention
to
unleash
the
full
potential
of
each
team
and
provide
them
with
their
own
leadership
and
strategic
direction.
This
is
the
start
of
a
new
chapter,
a
chapter
that
I
intend
to
remain
part
of
as
an
active,
committed,
and
supportive
shareholder
of
all
three
new
entities,
with
an
evergreen
horizon.
This
move
towards
three
independent
companies
reinforces
Embracer’s
vision
of
backing
entrepreneurs
and
creators
with
a
long-term
mindset,
allowing
them
to
continue
to
deliver
unforgettable
experiences
for
gamers
and
fans
across
the
globe”, says
Lars
Wingefors,
co-founder
and
Group
CEO
of
Embracer
Group
in
a
press
release.

In
an
open
letter,
Lars
Wingefors
talked
about
the
decision
to
split
into
three
groups:


“History
has
shown
that
diversified
groups
like
ours
can
significantly
enhance
their
chances
of
success
by
adopting
a
more
agile,
fast-moving
approach
and
focusing
on
well-defined
core
market
segments.


“Numerous
inspiring
examples
from
Sweden
illustrate
how
large
enterprises
have
achieved
greater
success
by
dividing
into
multiple
separate
specialized
companies.
I
am
deeply
motivated
and
inspired
by
these
success
stories
and
believe
they
offer
valuable
insights
for
our
own
strategic
direction.
The
time
is
right
for
Embracer
to
become
three
public
companies,
each
boasting
sufficient
scale,
coherent
strategies,
specialized
business
models
and
empowered
by
visionary
leadership
teams.
Rather
than
imposing
conformity
on
thriving
businesses,
we
should
foster
an
environment
that
amplifies
existing
success.
I
am
confident
that
this
will
be
easier
with
three
distinct
winning
formulas
in
specific
market
segments.”

Recently,
Embracer
Group

sold
Borderlands
developer
Gearbox
to
Take-Two.
Saber
Interactive
was
also

sold
off
to
itself,
allowing
the
company
to
become
independent.
Before
that,
numerous
companies
were
shut
down
in
a
bid
to
reduce
Embracer’s
spiralling
debt
problems
after
the
group
spent
years
and
years
buying
entities
at
an
obscene
rate.
Saints
Row
developer

Volition
was
shuttered,
as
was

Free
Radical
Design
and
many
more.

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