In a surprising move, Embracer Group has announced that they will be dividing into three separate companies, each to be listed individually on Sweden’s stock exchange. This decision marks a significant change for the famed mass-layoff-manufacturing corporation. The three companies include Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends, each with its own unique focus and goals.
The decision to divide the company comes after a period of massive cost-cutting within Embracer Group. The investment firm, led by CEO Lars Wingefors, will retain approximately 20% of the capital and 40% of the votes, forming a new long-term ownership structure. This restructuring aims to create clearer operational strategies and financial profiles for each entity, attracting a larger pool of investors.
The announcement emphasizes that the new structure will allow each company to fully utilize its balance sheet, financial targets, and growth ambitions. By separating into three entities, Embracer Group aims to optimize the greenlighting models, portfolios, and go-to-market strategies for both indie and AAA games. The collaboration around intellectual properties, companies, and talent will continue across the entities on market terms.
Coffee Stain & Friends will focus on a variety of games for PC, console, and mobile, with a dual emphasis on indie and AA premium and free-to-play games. The premium game development side includes well-known studios such as Ghost Ship, Tarsier, and THQ Nordic. On the other hand, the free-to-play segment features companies like Easybrain, Deca, and CrazyLabs.
Middle-earth Enterprises & Friends will encompass a diverse range of game developers, including Crystal Dynamics, Warhorse Studios, and Vertigo Games. This new entity will oversee iconic franchises like Dead Island, The Lord of the Rings, and Tomb Raider. The companies under this umbrella will remain within the current listed company Embracer Group.
With the restructuring now complete, Embracer Group aims to move forward without any further mass layoffs or closures. The recent sales of Saber Interactive and Gearbox mark the end of this phase of transformation for the corporation. The ultimate goal is to ensure stability and growth for each of the three new entities moving forward.
As Embracer Group embarks on this new chapter, it is clear that significant changes lie ahead for the organization and its subsidiaries. The strategic division into three distinct companies reflects a desire to streamline operations, attract investors, and foster growth opportunities. Only time will tell how successful this restructuring will be, but one thing is certain – the games industry is in for a period of exciting transformation and innovation.
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