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LONDON, Sept 11 (Reuters) - Embracer is considering options for its U.S. game developer Gearbox Entertainment including a sale as Europe's largest gaming company looks to shore up its finances, three people familiar with the matter told Reuters.

The maker of Tomb Raider video games, whose shares are traded in Stockholm, is working with Goldman Sachs and Aream & Co to explore a sale, the people said.

Embracer is weighing selling the unit, which is known for first-person shooter game Borderlands, after receiving interest from third parties, two of the people said.

Officials from Embracer and Goldman Sachs declined to comment. Aream did not respond to requests for comment.

In June Embracer's announced a restructuring to reduce its net debt to less than SEK 10 billion ($903 million) by the end of its financial year from SEK 16.7 billion at the end of June. The plans, which include studio closures, cancelled projects and layoffs, follows what CEO Lars Wingefors described as a "challenging year" for the company.

Embracer, majority owned by founder Wingefors, purchased Gearbox in February 2021 in a deal that valued the business at up to $1.4 billion at the time.

Gearbox marketing materials are already available for potential buyers, which consist mainly of international gaming groups, said two of the people.

The sources, who requested anonymity as the matter is confidential, cautioned a deal may not happen.

Gearbox, which sits under Embracer's PC console games segment, published its latest title Remnant 2 last month, which topped U.S. charts for July.

Embracer, which has a catalog of over 900 owned franchises, announced a review of its business to navigate challenging economic conditions last November, which could result in spin-offs of units.

In May, Embracer said it had reached a verbal commitment with an undisclosed party the previous October that would have resulted in more than $2 billion "in contracted development revenue" over six years. However, at the final hour it said it "received a negative outcome from the counterparty", causing its shares to drop by more than 40%.

Report: MX vs ATV studio Rainbow Studios impacted by Embracer layoffs

Embracer Group continues cutting jobs in pursuit of profitability.

www.gamedeveloper.com

Exclusive: Sweden’s Embracer weighs options for Borderlands maker Gearbox Entertainment –sources

Embracer is considering options for its U.S. game developer Gearbox Entertainment including a sale as Europe’s largest gaming company looks to shore up its finances, three people familiar with the matter told Reuters.

www.reuters.com

 

[azertydu91]

Who would've thought that this company going in a buying spree would lead to shit results? Oh almost everybody here.

 

[Tsaki]

WTF?! They are imploding. Did they buy everything the past years with the hopes of cashing out on Saudi money?

 

[Godot25]

Microsoft be like...

 

[feynoob]

Who would've thought that this company going in a buying spree would lead to shit results? Oh almost everybody here.

That is the reality of financial business.

Look at warner bros. At&t bought them. 3 years later, they sold them to Discovery.

 

[JohnnyFootball]

Who would've thought that this company going in a buying spree would lead to shit results? Oh almost everybody here.

Who is this "everybody" you speak of? I don't think anyone thought this would blow up in there face. Embracer was a relative unknown at the time and those acquisitions came for dirt cheap compared to something like Bungie and Bethesday.

I'm glad it as. I just want them to sell to someone who will bring back Deus Ex. Remake/remaster Deus Ex Human Revolution.

Meaning it will likely be the much worse and godawful Tencent who buys it up.

Take 2 should acquire the properties, not Sony or MS. They will stay 3rd party that way.

 

[feynoob]

Microsoft be like...

They are broke with shit management. I don't think xbros would like that. They are suffering enough right now.

 

[balls of snow]

Its over Deus Ex. Imagine being Eidos Montreal right now and watching the house of cards fall.

 

[TheAmazingSpiderMan]

Microsoft

 

[azertydu91]

Who is this "everybody" you speak of? I don't think anyone thought this would blow up in there face.

I'm glad it as. I just want them to sell to someone who will bring back Deus Ex. Remake/remaster Deus Ex Human Revolution.

Meaning it will likely be the much worse and godawful Tencent who buys it up.

Take 2 should acquire the properties, not Sony or MS. They will stay 3rd party that way.

They were buying too much compared to their size and lots of people were wondering if it was a smart decision, don't act like it was an attack or something they might've pulled it off too but apparently not.They lacked the financial backing for integration, as the workforce and management no idea but it seemed risky financialy nonetheless, I have no hatred toward them just was always vcurious what they intended to do with all those acquisitions.

 

[feynoob]

Its over Deus Ex. Imagine being Eidos Montreal right now and watching the house of cards fall.

Aren't they working with MS? They might be able to pick both studios from embracer.

Phil is smelling the blood now and will make offer for them.

 

[StueyDuck]

Ah well I guess borderlands is gonna be xbox exclusive now...

 

[azertydu91]

That is the reality of financial business.

Look at warner bros. At&t bought them. 3 years later, they sold them to Discovery.

I feel like they bought too many fish for an aquarium too small.

 

[feynoob]

I feel like they bought too many fish for an aquarium too small.

Plus that secret deal worth of $3b hurts them financially.
Maybe that is why they spent buying all those studios, because they gambled on that deal.

 

[Godot25]

They are broke with shit management. I don't think xbros would like that. They are suffering enough right now.

Microsoft: "We have an offer. You can keep Gearbox Software and we will instead buy Crystal Dynamics and Eidos Montreal. Deal?"

 

[JohnnyFootball]

They were buying too much compared to their size and lots of people were wondering if it was a smart decision, don't act like it was an attack or something they might've pulled it off too but apparently not.They lacked the financial backing for integration, as the workforce and management no idea but it seemed risky financialy nonetheless, I have no hatred toward them just was always vcurious what they intended to do with all those acquisitions.

who acted like it was?

 

[Black_Stride]

Embracer hoping to sell something else???


Is it Crystal Dynamics and Eidos?
If so MS:

 

[JohnnyFootball]

Microsoft: "We have an offer. You can keep Gearbox Software and we will instead buy Crystal Dynamics and Eidos Montreal. Deal?"

I want to know why everyone wants Microsoft to buy these studios.

It's like people have forgotten how poorly MS has managed the studios they acquired and what a piss poor track record.

Starfield being a success doesn't automatically make all of that stuff go away.

 

[azertydu91]

who acted like it was?

The everybody part man, it seemed to struck a nerve with you, because I clearly remember lots of people wondering if they could afford all this.
If this is a misinterpretation of your post then all my excuses, it seems that you were calling me crazy.

 

[feynoob]

Microsoft: "We have an offer. You can keep Gearbox Software and we will instead buy Crystal Dynamics and Eidos Montreal. Deal?"

That is very sensible deal. If they land that, then they get a talented studio.

 

[lh032]

LOL at people thinking Microsoft is going to make borderlands exclusive on Xbox, that would probably kill the franchise

 

[Mibu no ookami]

WTF?! They are imploding. Did they buy everything the past years with the hopes of cashing out on Saudi money?

They definitely thought they'd be able to turn a quick profit, but the market turned.

They bought heavy and then the value of these studios plummeted post covid and the operating costs have only increased. It's a really bad combination. They don't have the IP or management experience to really run as a publisher.

Only a matter of time until they sell Tomb Raider and those Eidos-based studios.

 

[NikuNashi]

I want to know why everyone wants Microsoft to buy these studios.

It's like people have forgotten how poorly MS has managed the studios they acquired and what a piss poor track record.

Starfield being a success doesn't automatically make all of that stuff go away.

Jury's still out on that one, 85 meta is hardly a success. Let's wait and see the Xbox hardware sales figures for this quarter.

 

[Unknown?]

Microsoft be like...

And they will do the same later on down the road when they aren't getting 100% hits.

 

[Mibu no ookami]

I want to know why everyone wants Microsoft to buy these studios.

It's like people have forgotten how poorly MS has managed the studios they acquired and what a piss poor track record.

Starfield being a success doesn't automatically make all of that stuff go away.

People think studios manage themselves.

Also way too early to call Starfield a success.

But to answer your question, it's because Microsoft still lacks content and established studios, so it's natural for people to want them to takeover companies that are clearly up for sale.

 

[ChuckeRearmed]

This Saudi deal heavily decimated Embracer. I wonder who would want to buy Gearbox with Randy on board. Not sure if there will be suitors for him at all. Maybe T2?

Curious to see what's gonna happen with other studios - I guess Embracer will keep something Eidos and Crystal Dynamics, but again them willing to sell Gearbox does not fill me with confidence that they won't consider selling those two.

 

[diffusionx]

This Saudi deal heavily decimated Embracer. I wonder who would want to buy Gearbox with Randy on board. Not sure if there will be suitors for him at all. Maybe T2?

Curious to see what's gonna happen with other studios - I guess Embracer will keep something Eidos and Crystal Dynamics, but again them willing to sell Gearbox does not fill me with confidence that they won't consider selling those two.

Randy's a giant piece of shit but he turned this studio into one of the major American devs and has a legit AAA IP on board. Somebody would buy them.

 

[Godot25]

I want to know why everyone wants Microsoft to buy these studios.

It's like people have forgotten how poorly MS has managed the studios they acquired and what a piss poor track record.

Starfield being a success doesn't automatically make all of that stuff go away.

Jeeez. I don't want Microsoft to buy Gearbox. I'm just having a little bit of fun considering "muh Microsoft monopoly" mantra

 

[funking giblet]

Go Microsoft, give Duke Nukem to id Software!

 

[Godot25]

This Saudi deal heavily decimated Embracer. I wonder who would want to buy Gearbox with Randy on board. Not sure if there will be suitors for him at all. Maybe T2?

Curious to see what's gonna happen with other studios - I guess Embracer will keep something Eidos and Crystal Dynamics, but again them willing to sell Gearbox does not fill me with confidence that they won't consider selling those two.

I mean...they are desperate to lower their debt. So if they won't be successful in shopping around Gearbox, they would not refuse cashing out on Crystal/Eidos combo.

They bought them for 300 mil. If someone will come and offer 500 mil. are they in position to refuse?

 

[ChuckeRearmed]

Randy's a giant piece of shit but he turned this studio into one of the major American devs and has a legit AAA IP on board. Somebody would buy them.

Maybe, but it is hard to say. Not sure there were a lot of suitors when Gearbox was on sale - especially with no indication that Borderlands IP is growing at all.

I mean...they are desperate to lower their debt. So if they won't be successful in shopping around Gearbox, they would not refuse cashing out on Crystal/Eidos combo.

They bought them for 300 mil. If someone will come and offer 500 mil. are they in position to refuse?

But the thing is both Eidos and Crystal are (at least should) bringing money? Eidos and Crystal get money from MSFT and Crystal with TR IP and Amazon.

 

[diffusionx]

Maybe, but it is hard to say. Not sure there were a lot of suitors when Gearbox was on sale - especially with no indication that Borderlands IP is growing at all.


But the thing is both Eidos and Crystal are (at least should) bringing money? Eidos and Crystal get money from MSFT and Crystal with TR IP and Amazon.

There is evidence Borderlands is growing, both Borderlands 3 and Tiny Tina Wonderland were huge hits.

 

[Godot25]

But the thing is both Eidos and Crystal are (at least should) bringing money? Eidos and Crystal get money from MSFT and Crystal with TR IP and Amazon.

Currently, Eidos and Crystal are financial burden since their games are deep into development.
Although, they are getting cheques from Microsoft since Crystal is helping with Perfect Dark and Eidos is helping with Fable.

 

[Neon Xenon]

The Hydra Bleeds?

 

[Roni]

Praying Eidos Montreal pulls an IOI and ends up going independent with the Deus Ex license, seems more and more like the only fucking way we're getting the conclusion to Jensen's trilogy.

 

[Ozzie666]

Would Microsoft dare buy anyone else until the Activision deal is fully across the line ?

Bold move

 

[Black_Stride]

LOL at people thinking Microsoft is going to make borderlands exclusive on Xbox, that would probably kill the franchise

Gearbox is likely worth 1 billion or so dollars.
Even at that price I dont think MS would be interested.

Borderlands, Homeworld and Brothers in Arms are pretty much the only titles they own that are worth anything.

If anyone is gonna be interested it would like be Take-Two as they already have a good working relationship.

 

[Three]

WTF?! They are imploding. Did they buy everything the past years with the hopes of cashing out on Saudi money?

That was kind of my guess in 2022 but I don't think it's going to be the Saudis.

Who wants to bet Embracer themselves will be bought? Seems more like a fish net.

Then in May this year Colin predicted they're going to be in trouble.

Colin Moriarty said Embracer was going to be in trouble soon, it seems like he was right.

That trouble will be to lower the price for that shareholder vote.

The firesale will begin soon enough.

 

[Punished Miku]

Eidos and Crystal Dynamics are fairly organic fits for MS. But yeah, who knows. Not holding my breath.

 

[Godot25]

Would Microsoft dare buy anyone else until the Activision deal is fully across the line ?

Bold move

Theoretically they should be fine if they attempted this. If they have interest of course.

Only regulatory body that have problem with ABK is CMA and they are laser focused on cloud gaming.

 

[Dane]

Microsoft be like...

Actually this was supposedly close to happen in 2021, some insiders reported that there were conversations but it didn't go through, there was speculation that one of the demands was to have Randy leaving the company for obvious reasons.

 

[Dr. Samuel Hayden]

What a shitshow. I'll be surprised if Embracer still exists a few years from now.

 

[splattered]

Go Microsoft, give Duke Nukem to id Software!

Holy fuck that's an amazing idea

 

[graywolf323]

I want to know why everyone wants Microsoft to buy these studios.

It's like people have forgotten how poorly MS has managed the studios they acquired and what a piss poor track record.

Starfield being a success doesn't automatically make all of that stuff go away.

pretty much, it’s hilarious to see because there’s no reason for it aside from fanboyism

Embracer sucking up a bunch of studios didn’t work out and now they’re selling? well then Microsoft (the other company that’s been sucking up a bunch of studios with mixed results so far) should buy them! what could possibly go wrong… (especially when studio management has been a weak point for Xbox for a long long time now…)

 

[splattered]

I feel like this was predicted the day embracer bought up the square studios and IPs... it's sort of been expected for a while now.

Gaf once MS actually does buy the studios as expected:

 

[Adam_802]

Lol fuck gearbox. Embracer should shut them down for good.

 

[Mr Moose]

Randy Pitchford:

Seems about right.

 

[drganon]

I want to know why everyone wants Microsoft to buy these studios.

It's like people have forgotten how poorly MS has managed the studios they acquired and what a piss poor track record.

Starfield being a success doesn't automatically make all of that stuff go away.

The acquisition begging never ends sadly.

 

[M1chl]

What kind of stupid ass project is this Embracer group, they were buying everything and now, even without games, they are crashing down. What kind of retard does business this way? Well if it isn't someone from Sony, MS, Amazon, etc to lower the price that is.

 

[Xyphie]

It's not really surprising. It's been really apparent for years that Embracer is nothing but a rollup strategy hoping to get a big buyout from a major player either existing or trying to enter the gaming market. If they can't find a big buyer the company is probably a zero.