Earlier this year, Swedish company Embracer Group saw a deal fall through to the tune of $2 billion USD, something that caused its stock to plummet back in May. Now, thanks to a new Axios report, we know more about exactly who that deal was supposed to be with a Saudi Arabia-backed investment group.
The report by Axios sheds light on the collapsed deal, which saw the deal get pulled back in May, with Embracer CEO stating the deal had been in the works for "seven months" with the unnamed group. Axios reveals that the company that was set to invest $2 billion dollars on the company has bought practically everything from Middle-earth Enterprises to Gearbox Studios (the publishers of MMOs such as Star Trek Online and Neverwinter).
The fallout from the deal collapsing saw shares plummet while Embracer initiated layoffs to cut costs (thanks, Slapshot).
Axios' Stephen Totilo reports, based on conversations with multiple sources, that the $2 billion deal was going to be with a company called the Savvy Games Group, which is a subsidiary of the Saudi Arabian-funded Saudi Public Investment Fund.
While the report doesn't include why the deal fell through (Savvy and Embracer did not respond to requests for comment by Axios), it points to the larger narrative that has circulated around the gaming industry when it comes to investment sources for many of gaming's biggest names. According to Axios, the deal would have cemented the Saudi-backed group as a "major gaming label," something the government of Saudi Arabia is keen on doing in its effort to turn the Kingdom into a major gaming hub.
Savvy has investments in major companies such as Take-Two, Nintendo, and Electronic Arts, raising questions about companies taking money from a country with a poor human rights record. Embracer, for their part, had already received a $1 billion investment from the fund last year.