STOCKHOLM, Sweden, June 13 – Swedish gaming group Embracer, which owns the Borderlands franchise and the Tomb Raider licence, announced Tuesday a vast restructuring programme that includes the closing of studios and cancelling game projects.
“During the past years, Embracer invested significantly both in acquisitions and into a strategy of accelerated organic growth,” Embracer CEO Lars Wingefors said in a statement.
“The programme presented today will transform us from our current heavy-investment mode to a highly cash-flow generative business this year,” Wingefors added.
Embracer has been on an acquisition spree for several years and recently announced the development of a huge Lord of the Rings game with Amazon.
However, its shares fell by over 44 percent in late May following the announcement that a “major strategic partnership”, valued at $2 billion, had fallen through, and that the company was lowering its projections for the 2023/2024 financial year.
According to Embracer, which is based in the western Swedish town of Karlstad, the deal would have also allowed catch-up payments for “already capitalised costs for a range of large-budget games” and would have notably improved “medium-to-long-term profit”.
The restructuring programme seeks to reduce capital expenditure by at least 2.9 billion kronor ($270 million) by Embracer’s 2024/2025 financial year, and reduce overhead costs by 10 percent.
It would also entail the “closing of studios and termination of projects,” the company said.
“Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this,” Wingefors said.
