After several months of waves of layoffs and studio closures, the European group Embracer announces its disappearance. It will now be divided into three completely separate companies with uncertain futures.
The Embracer Group adventure is about to conclude. You probably don’t know the name, but it’s one of the biggest studio groups in the world. And for good reason, Embracer spent several years multiplying the acquisitions of studios and publishers to arrive at a group of more than 110 studios and more than 12,000 employees around the world.
A great financial story, until May 2023 when the failure of a $2 billion investment contract from the crown of Saudi Arabia led the European group into torment. Since then, the group has been laying off, closing or reselling studios. Gearbox, the developers of Borderlands bought in 2021 by Embracer, was, for example, resold to 2K Games in April 2024.
Embracer Group now announces its disappearance, to separate into three different companies.
The little ones, the big ones and the board games
In its press release, Embracer announces the creation of three different companies, each separated on the stock exchange. Their destinies will no longer be linked at all.
- Asmodee
- Coffee Stain & Friends
- Middle-earth Enterprises & Friends
Acquired in 2022, the board game publisher Asmodee will therefore regain its independence. According to the press release, the synergy which had been put in place to allow Asmodee to adapt universes belonging to video game studios should continue after the separation. The independence of Asmodee should allow it to resume acquisitions in the field of board games, indicates the press release.
In the Coffee Stain & Friends group, Embracer places all small-scale studios. All specialists in free to play games, service games, mobile games, or even independent or AA games therefore find themselves linked in a common destiny, without their previous big budget colleagues. It is this group which will integrate franchises like Statisfactory, Goat Simulator, Valheim, Teardown, Deep Rock Galactic.
The third and final group Middle-earth Enterprises & Friends brings together all AAA game development studios for PC and consoles. We find there in particular 4A Games (Metro), the former western branch of Square Enix with the franchise tomb Raiderthe publisher Plaion (ex-Koch) but also the owners of the license The Lord of the Rings.
A long procedure
This enormous restructuring of a video game giant will inevitably take time. Embracer hopes to part ways with Asmodee within the next twelve months. The separation between small and large studios should take longer, with a target set at 2025 without further details.
All this must first be approved by the group’s shareholders. Each entity can be expected to carry out additional restructuring on its own once the divorce is consummated.