Game news After a buyout worth 1.3 billion in 2021, Embracer is already letting the creators of Borderlands slip away… without creating anything or making its investment profitable
Publié le 11/03/2024 à 08:14
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Embracer Group. Just reading this name can now send shivers down your spine. After a phase of expansion allowing us to qualify the company as an ogre, the house of cards collapsed. Now in the final phase of its restructuring, Embracer could absorb its losses by letting one of its big names slip away.
Embracer: the ogre is now on dry bread and water
Born under the name Game Outlet Europe which, in 2007, launched Nordic Games, Embracer Group was for several years the European ogre of video games. Through takeovers and mergers, the company has become a juggernautamong others owner of THQ Nordic, Koch Media (now Paion) and Deep Silver, Saber Interactive, Gearbox, Piranha Byte, Eidos Montreal or Crystal Dynamics. According to ActuGaming calculations, Embracer Group employed more than 16,600 people in March 2023. Historic fundraising, massive investments, everything was done for Embracer to become a solid giant. However, society has perhaps put the cart before the horse.
Discussed for a long time and on the verge of success, a two billion dollar investment fell through. We learned later that this money was to be injected by Savvy Gaming Group, owned by Saudi Arabia. The announcement had the effect of a bomb, and the value of Embracer shares fell by 40%. Add to this the end of the boom concomitant with Covid, and we find ourselves with a society which simply can no longer bear its expenses. From June 2023, a gigantic restructuring operation has been announcedand everyone logically started to tremble within the group.
At the end of the year, these are 1205 developers who lost their jobs for global layoffs which affected 8% of the workforce or 1,383 people. Between project cancellations and cost cutting, Embracer is looking for other ways to speed things up, and one of these ways seems to be simply to let go of certain structures for hard currency. A few days ago, Bloomberg's Jason Schreier revealed ahead of time that Saber Interactive, a group comprising 32 studios for nearly 3,800 employees, would soon regain its independence for the sum of 500 million of dollars, paid by group of private investors.
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Gearbox would be about to be sold and relieve Embracer of more than 1,540 salaries
Another company, bought for $1.3 billion in 2021, should also set sail. It's Gearbox, and the formalization should take place before the end of the fiscal year, on March 31. According to InsiderGaming, Bloomber and Kotaku, Gearbox CEO and co-founder Randy Pitchford held a staff meeting to announce to employees that a decision had been made regarding the future of the studio, and that more information would be shared in March. Still according to Kotaku's sources, Pitchford explains to Gearbox employees that three scenarios have been studied since September 2023: staying with Embracer, being sold or financing a buyout and thus becoming independent again. The information collected suggests that a sale has been decided, and that an agreement will soon be signed. Asked about this by Kotaku, Randy Pitchford played the “nothing to declare” card:
I'm glad people are interested enough in what we do that you want to write an article about us for your readers. I am honored and humbled that our company is the subject of rumor, speculation and discussion. As always, we'll be happy to let you know about any projects we have to announce or any news we have to share as part of our mission to entertain the world.
As a reminder, Gearbox worked on 007: Nightfire, Counter-Strike, Halo, Brother in Arms, Duke Nukem Forever and Homeworld, but is best known for the Borderlands franchise which also includes Tiny Tina's Wonderlands.
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