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Swedish gaming conglomerate Embracer Group announced plans on Monday to split itself into three distinct games and entertainment companies
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- Title
- Gaming giant Embracer Group is splitting into three companies
- Authors
- Jess Weatherbed
- Published
- Apr 22 2024
- Word count
- 437 words
The lists of game IP held by Embracer is kind of sobering. I didn't realize that they'd bought up quite so many studios that had made good things. I knew they were essentially the gaming Borg, but hadn't realized how far it had gone.
That said, splitting into divisions that can focus more on a given kind of game might be a sensible move. In a giant conglomerate, if you don't have subject matter experts who can keep the new product development going, you're just buying things for them to die on the vine. But if they didn't have the talent to keep things going before there's no reason that splitting in three will make the right staff appear. There's nothing inherently special about splitting into three new companies that'll fix any of their operational woes.
I'm not sure. I think splitting into smaller corporations could greatly improve focus in each. Sometimes you do actually need more management and business people per project to make sure the right goals are being prioritized and reviewed!
Ok, but there wasn't anything stopping them from finding the right level of management for all of their many, many subsidiaries when they were still one company. Splitting in three forces a higher number of administrators, but not in a way that forces better management.
I agree. There's no guarantee their new corporate structure will improve things. Hopefully, the new C suite of the smaller companies will be more familiar with the day to day operations and priorities since they'll have fewer projects. At the very least, the new companies won't drag each other down since they'll be fully independent.
They'll be separate corporations, yes, but I'm not sure why you're saying "independent." Their own PR release makes clear that shares in the the two that are being spun off are going the be distributed to the existing shareholders of Embracer. Beyond shareholding...
So the C suite will be running individual companies, but the person who led Embracer to such massive losses is still going to be the "long-term, active, committed and supportive owner of all three entities."
Here's another reason for the split: Embracer saddles the board game arm Asmodee with all the debt when dividing up the company
Sounds shady, they're basically using that branch as a scapegoat not to run the entire thing to the ground. Sad for board game enjoyers.
Didn't read that link, but I read about the deal earlier this week and it's super shady. They are saddling Asmodee with close to $1B in debt to pay down other Embracer (but not Asmodee) debts.
TIL Exploding Kittens is owned by Asmodee which is owned (right now, not for long) by Embracer. Luckily from Google my understanding is that it's partial ownership, so they're safe even if Asmodee crashes and burns.
Either way, Embracer is a lesson in corporate greed - they wanted everything with no regard for sustainability or feasibility, and now they have to split it up and sell it.
They're splitting up, but notice that they're "...offer[ing] more differentiated and distinct equity stories for existing and new shareholders.” For better or for worse, the people in control are going to stay in control. They're just working to provide a more compelling narrative and tailored investing experience for outside investors who might want to invest in "indie" experiences rather than AAA or board games, or vice versa.
This is what happens when your entire business plan hinges on a cash injection from a sketchy Saudi businessman who backs out of your deal last minute. I have no sympathy for this company, they purchased everything under the sun and wasted so much money, not to mention all the games they've cancelled recently. It's really no wonder they've had to do something like this to stay relevant.
It still amazes me that Embracer doesn't seem to have ever had a plan beyond "acquisitions make stock go up".
I don't know if this is good or not for the remaining developers stuck under Embracer but I sure hope so.
Does any corporation ever do? That's what they do, sometimes it goes catastrophically wrong like this one
Of course they do. Specifically in the gaming space, many actually make games.