Embracer Group announces plans to split into three separate companies

[Pelican Press 0]

Embracer Group announces plans to split into three separate companies

Swedish game and media holding company Embracer Group has announced its plans to split into three separate entities.

The group will separate into three companies – Asmodee, Coffee Stain & Friends and Middle-earth Enterprises & Friends – each of which will be listed as a separate company on Nasdasq Stockholm.

As part of the separation process, Embracer has entered into a new financing agreement, through Asmodee, which is worth €900 million. Embracer says the proceeds from this will “repay existing debt and reduce leverage in the remaining Embracer Group”.

Asmodee will continue to operate as a publisher and distributor of board games, trading cards and digital board games, and will consist of 23 fully owned studios.

Coffee Stain & Friends will focus on PC, console and mobile games, including “community-driven free-to-play games, LiveOps games and indie / AA games”.

It will operate under premium and free-to-play divisions. The premium segment will consist of Coffee Stain, THQ Nordic, Ghost Ship, Tuxedo Labs, Tarsier, Amplifier Game Invest and others.

Finally, Middle-earth Enterprises & Friends will be a “creative powerhouse in AAA game development and publishing for PC / console” and will own the Lord of the Rings and Tomb Raider IPs, along with the likes of ***** Island, Metro and Kingdom Come Deliverance.

Studios joining Middle-earth Enterprises & Friends will include Crystal Dynamics, Dambuster, Eidos Montreal, Flying Wild Hog, Tripwire, Vertigo Games, Warhorse Studios and 4A Games.

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In an open later to shareholders, Embracer Group CEO Lars Wingefors said the decision to split the group into three separate entities will help them to work to different strategies.

“There is not one way to do business, but some business models are more similar than others,” he explained. “The same goes for businesspeople. The ambitions may be similar, but the approach differs.

“The similarities between the businesses that will make up Asmodee, Coffee Stain & Friends and Middle-earth Enterprises & Friends are striking, but so are also the differences when it comes to go-to-market strategies and business profiles. All the companies have bright futures ahead, by perfecting what is working for each of them, and by continuing to cooperate when it makes sense.

“There is significant untapped potential within the group, which I am confident the new structure will unleash. This will empower each individual and each team to grow and excel further in their careers as well as provide them with their own leadership and strategic direction.”

After several years of rapid expansion through mergers and acquisitions, the Embracer Group announced last May that a $2 billion deal had collapsed at the last minute, leading it to embark on a restructuring programme that would involve the closure of studios and the cancellation of multiple projects.

Now completed, this restructuring resulted in almost 1,400 job cuts, and the cancellation of 29 unannounced games during a six-month ******* in 2023.

As part of its restructuring, Embracer closed Saints Row developer Volition, Campfire Cabal, and TimeSplitters studio Free ******** Design, while the likes of Borderlands maker Gearbox and Saber Interactive were sold.

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