Embracer open to divesting studios, confirms more closures on the horizon

Embracer CEO Lars Wingefors has said the Swedish conglomerate will need to "continue making tough decisions" to become a leaner, more cost-efficient company and signified that more studio closures and layoffs are on the horizon.

Speaking during a Q&A at the company's annual general meeting, Wingefors described the decision to close studios like Campfire Cabal and Volition and downsize others including Crystal Dynamics, Rainbow Studios, and Beamdog as "tough from many standpoints," but said the company is "determined" to see the process through.

"Ultimately we are making decisions to either restructure or downsize some teams, and there will be a few cases of closures. It's difficult and it takes time, but we announced this in June and now we're at the end of September and we're confident to deliver on the targets we set out for the end of the fiscal year," he added.

Notably, Wingefors claimed that when it comes to cost cutting, some outcomes are more desirable than others. Ideally, he suggested Embracer would like to find "new opportunities for [affected employees], even if it's outside Embracer Group through sometimes a divestment."

Could free-spending Embracer start selling?

This isn't the first time we've heard reports that Embracer is considering the sale of some assets. Earlier this month, Reuters indicated the company has been exploring the idea of selling Borderlands developer Gearbox Entertainment two years after it acquired the studio for $1.38 billion.

Speaking more on the possibility of divestment, Wingefors said there's currently a "strong vibrant market" with a number of active players, and indicated the company might have more luck attempting to sell its "more high-value assets."

"On the divestment side there is a strong vibrant market with many, many active players–both financial sponsors and big industry players," he continued. "It's easier to run proper processes for more high-value assets than smaller assets, and I think that's what we have experienced now as well."

We can expect to hear more about Embracer's restructuring program and those studios and employees affected when the company publishes its Q2 interim report on November 16, 2023.