Embracer says it spends more money on platforms than game development

CEO Lars Wingefors thinks revenue programs like Epic Games' First Run program can help developers reduce the cost of bringing their games to storefronts.

According to Embracer CEO Lars Wingefors, the struggling company has been spending a lot of money to put its games on storefronts like Steam and PlayStation Store. During the company's recent annual general meeting, he mentioned how costly it is to release titles nowadays, calling it "crazy if you just think about that number." 

Wingefors' aside was in relation to Epic Games' First Run program, wherein third-party developers can receive 100 percent of revenue if their game has six-month exclusivity to the Epic Games Store. He admitted it'd be nice to "pay less fees to platforms," as Embracer already spends more money on that than developing its games.

"There are margins with the platforms that I would preferably have within building more games and some more margins," he continued. "[But] I think it’s good having competition to Steam, because it puts them on their toes to deliver their best experience."

Outside of First Run, Epic's revenue split is 88/12, with the former going towards the developer. Compared to Steam's 70/30 split, it's more favorable, and is one of several store-related initiatives made by Epic to bring studios into its ecosystem. 

Embracer already has a solid relationship with Epic's store exclusivity: 2019's Metro Exodus was a one-year exclusive for Epic, and Dead Island 2 from earlier this year has a similar agreement. And though it didn't acquire Gearbox until 2021, Borderlands 3 and 2022's Tiny Tina's Wonderlands were exclusive for three to six months.

Games with exclusivity towards the Epic Games Store have been subject to hostility and review bombing, which Wingefors briefly touched on. He noted players have "different perspectives" on such matters, which makes favoring a particular storefront, even if only for a little while, a bit of a challenge. 

While preaching to the benefits of competition, he was correct in saying that ultimately, players "want to be able to pick their platform" to buy and play games on.

While Embracer is seeing wins with Epic Game Store exclusives, it sure isn't sharing them with the studios where it's laying off employees.

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