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Embracer open to divesting studios, confirms more closures on the horizon

Embracer CEO Lars Wingefors has said the Swedish conglomerate will need to "continue making tough decisions" to become a leaner, more cost-efficient company and signified that more studio closures and layoffs are on the horizon.
Speaking during a Q&A at the company's annual general meeting, Wingefors described the decision to close studios like Campfire Cabal and Volition and downsize others including Crystal Dynamics, Rainbow Studios, and Beamdog as "tough from many standpoints," but said the company is "determined" to see the process through.
"Ultimately we are making decisions to either restructure or downsize some teams, and there will be a few cases of closures. It's difficult and it takes time, but we announced this in June and now we're at the end of September and we're confident to deliver on the targets we set out for the end of the fiscal year," he added.

Notably, Wingefors claimed that when it comes to cost cutting, some outcomes are more desirable than others. Ideally, he suggested Embracer would like to find "new opportunities for [affected employees], even if it's outside Embracer Group through sometimes a divestment."
Game Developer

Remember when people were surprised this company out of nowhere was acquiring studios left and right and Sony was doing nothing? Well...maybe there's a reason for it.

This looks more and more like a company that had no idea how videogames worked and how long it would take them to get their invested money back. What a trainwreck. I really hope some of those Eidos studios won't close like Crystal Dynamics.
 

DeepEnigma

Gold Member
I for one am shocked.

I called it way back when they went on a buying spree that they're going to be a proxy shell for platform consolidators to swoop in.

plan-planned.gif
 
Crystal Dynamics seems like an easy bet for Microsoft to pick-up if this divesture takes place as they are already actively engaged with development of the Xbox first-party Perfect Dark reboot. I would also look into Eidos Montreal, but only if they came attached with the Deus Ex IP. A sequel to Mankind Divided or a new open-world entry in the franchise would be a killer exclusive for any company.
 

havoc00

Member
Apparently Take-Two has turned down Embracer Group's sale offer on Gearbox. Take-Two doesn't want them, Xbox is locked up on ABK still for the next several weeks and may not want to rock the boat by announcing any new acquisitions for at least several months afterward. Embracer Group is so screwed, I doubt anybody else will offer them anywhere near the overvalued $1.3b Embracer paid for them.

They should sell Crystal Dynamics and Eidos to Xbox in a few months instead, far better grabs for Xbox than Gearbox, especially since both are currently assisting on 1st party games, Crystal on Perfect Dark and Eidos on Fable.
 

havoc00

Member
Crystal Dynamics seems like an easy bet for Microsoft to pick-up if this divesture takes place as they are already actively engaged with development of the Xbox first-party Perfect Dark reboot. I would also look into Eidos Montreal, but only if they came attached with the Deus Ex IP. A sequel to Mankind Divided or a new open-world entry in the franchise would be a killer exclusive for any company.
Agreed esp over Gearbox. They come with IP's that are actually worth acquiring. With Gearbox, their biggest IP is Borderlands, which Take-Two already has partial ownership of, so Xbox wouldn't be getting any exclusive or even multiplat but day one Gamepass Borderlands games from the deal, so the only IP they would get would be Duke Nukem (dead and pretty much unrevivable without losing it's identity as a franchise, because even in 2011 people found Duke offensive, and they'd find him even more offensive now in the 2020's), Brothers in Arms (dead, was never particularly popular to begin with, as the biggest game in the series only sold like 2m copies), Homeworld (fairly niche RTS series), and Battleborn (dead and flopped the first time around).

Crystal and Eidos, in addition to already assisting on Xbox 1st party games, come with two relevant, fairly popular IP's in Tomb Raider and Deus Ex, as well as dormant but possibly revivable IP's Thief and Legacy of Kain. They're just a much better fit for Xbox.
 
Apparently Take-Two has turned down Embracer Group's sale offer on Gearbox. Take-Two doesn't want them, Xbox is locked up on ABK still for the next several weeks and may not want to rock the boat by announcing any new acquisitions for at least several months afterward. Embracer Group is so screwed, I doubt anybody else will offer them anywhere near the overvalued $1.3b Embracer paid for them.

They should sell Crystal Dynamics and Eidos to Xbox in a few months instead, far better grabs for Xbox than Gearbox, especially since both are currently assisting on 1st party games, Crystal on Perfect Dark and Eidos on Fable.
I understand the closure of Volition since their last game bombed hard, quality wasn't there, and management was clearly out of touch with their former fanbase.
I understand less Gearbox, but we don't know how Tiny Tina and New Tales actually performed and if their publishing branch is doing well aside for the recent success of Remnant II.
But why on earth they should sell the former Square Enix studios after a year without even see what they can do on the market? Crystal Dynamics is developing a new Tomb Raider with amazon games, let's see how things will work for them
 
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Hudo

Member
So was their plan to buy everything up, lose money and sell everything again (or close it down)?

I guess the real retards are the investors who are backing this.
 

Robb

Gold Member
This is why broad industry consolidation is going to suck. Everyone will just become a number on a sheet, and if that number is not in line with expectations you’re gone.
 
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March Climber

Gold Member
This is why studios and publishers should not be gathering under a couple unbrellas in the entire industry.
In order for this to happen, gaming audiences have to stop expecting AAA projects from companies that simply can't afford the budget to release that level of content.

Crystal Dynamics should go back to AA., THQ should go back to AA or B-level, Volition(RIP) should never have tried to be AAA, etc.
 

Thirty7ven

Banned
Of course that people think MS will buy the studios that Embracer actually can count on, like Tomb Raider and its deal with Amazon.

They will close off/sell studios that are nobodies.
 
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Darsxx82

Member
People regret the consolidation process but there are more and more cases of Studios that are put up for sale or closed/dissolved without anyone being interested in buying them....

It looks more and more like Embracer is planning to open a clearance sale and will have many neighbors taking a look at what they can buy on sale. What is not sold will go directly into the trash can.

I don't think so, but if the situation arises in which Eidos and CrystalDynamic are put up for sale or are in danger of being closed..... MS would have to consider what to do while without those Studios two great projects (PS, Fable) would be in trouble...
 

Heisenberg007

Gold Journalism
Most of their studios are useless, worthless, and leftovers.

Microsoft may buy Eidos and Crystal Dynamics because they are working on XGS games anyway. But they are SquareEnix leftovers, so that'd be a new low.

I think Saber is the only studio worth having from Embracer's portfolio, and Sony might be interested in it because of KOTOR's Remake and the talent that studio has.

Otherwise, it will be a free-for-all for pennies for the rest of their portfolio they decide to divest.
 

Embearded

Member
In order for this to happen, gaming audiences have to stop expecting AAA projects from companies that simply can't afford the budget to release that level of content.

Crystal Dynamics should go back to AA., THQ should go back to AA or B-level, Volition(RIP) should never have tried to be AAA, etc.

I totally agree, in the end we don't need everything to be AAA. It's not only the audience though, as studios tend to go after the most recent fad and of course by the time they release the game, it's already passed.

Industry is in dire need of more people like Miyamoto and less Ryans and Spencer's.
These god damn career fixated fools are destroying the industry.
 
Seamless plan, buy a bunch of companies and then when the accounts don't work out (because it's impossible for them to work out) to fire, sell and close, the same thing will happen to all the companies that are going down the same path as MS, a matter of time.
 

Dr_Ifto

Member
Microsoft would have been better to buy embracer and put all that catalog on gamepass. Now i dont think they can buy them. Maybe the smaller studios, but are they worth it individually?
 

Bkdk

Member
First embracer over expanded, now recession is here and gaming usually get hit super hard during recession so it makes things even worse. MS certainly won’t be interested into buying any of them as disastrous redfall and underwhelming starfield will push them into prioritizing managing their own studios much better.
 
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