Embracer Group's long, painful restructuring ended earlier this year, and the company’s most recent financial report shows some of the results of the efforts that began last summer, including 80 canceled development projects and a reduction in employee headcount of 4,532 people, including more than 3,700 game developers.
The process was intended to help the company become less weighted down by debts and to help right some slides in financial performance. The latest financial report shows that from April 2023 through the end of March 2024, net sales increased by 12% YoY. This was driven by a 34% rise in entertainment and services and a 13% rise in sales in their tabletop games division. PC and console games, as well as mobile games, had moderate rises. They continue on now that they're restructuring plan was finalized, and the decision announced to divide the company into three different publicly listed companies, everything is, according to CEO Lars Wingefors, “tracking according to plan”.
As for fiscal year 2024/2025, they are planning to release more than 70 projects and predict that Kingdom Come: Deliverance II and Killing Floor 3 will deliver for them on PC and console.
Embracer Group’s restructuring came as part of a very difficult time in the industry, with some slowdowns and many companies laying off employees, canceling projects, and sometimes pulling back on taking risks on new IP in order to pledge to make more sequels, reboots, and spinoffs, as many stated they wanted to concentrate on what IPs and services that players wanted the most (or sold the most, anyway).
Because Embracer Group had gone on an acquisition spree in the previous few years, the company’s restructuring (quickly begun after a $2 billion deal fell through), the losses here represent some of the largest. The total reduction in employees comes as a result of layoffs and selling companies, as when they sold most of Gearbox to Take-Two Entertainment (which then laid off employees too).
They are also heading into a period of time where their concentrating on IP that they own or control, including Tomb Raider, Dead Island, Darksiders, The Lord of the Rings, Metro, Kingdom Come, and more. This extends to other media in their entertainment segment, as “ After the quarter, Middle-earth Enterprises could finally confirm that two new films from Tolkien’s Middle-earth are in the works and, separately, Crystal Dynamics announced a new partnership to create new films and TV series for Tomb Raider”.
