Report: Embracer might sell Gearbox two years after $1.38 billion acquisition

Update: Gearbox CCO Dan Hewitt sent an email to staff confirming Embracer was looking at the studio's options, including selling it or making it independent.

Embracer is reportedly considering the sale of Borderlands developer Gearbox Entertainment just over two years after it  purchased the company for $1.38 billion.

According to a report from Reuters, the Swedish conglomerate is exploring a sale with the help of Goldman Sachs and Aream & Co and has already received interest from two unnamed parties.

Marketing materials have apparently been made available to potential buyers, which two people familiar with the matter claimed mainly consist of international gaming groups.

Embracer and Goldman Sachs declined to comment when approached by Reuters.

Gearbox has expanded significantly under the Embracer banner. Last year, Embracer turned Eidos Shanghai into Gearbox Studio Shanghai, sanctioned the acquisition of Tiny Tina's Wonderlands developer Lost Boys Interactive, and rebranded Perfect World Entertainment as Gearbox Publishing.

Back in 2021, shortly after it was purchased by Embracer, Gearbox also opened a Montreal studio to work on Borderlands and new franchises. More recently, the company bought 3D tech firm Captured Dimensions and secured the rights to the Risk of Rain franchise.

Free-spending Embracer Group might start selling

Those deals, however, were made before Embracer announced it would making a number of layoffs to pivot away from its "current heavy-investment model" to become a "highly cash-flow generative business."

Announcing a restructuring program in June, Embracer CEO Lars Wingefors said the company needed to become more "self-sufficient" and "focused." To achieve that goal, he explained Embracer would be shuttering or downsizing a number of studios and pausing or scrapping ongoing development projects with "low projected returns."

"We need to better leverage our scale, the quality of our portfolio and our capabilities. Our commitment to our transmedia strategy remains intact," said Wingefors at the time. "That strategy alone has great potential to deliver substantial value across the group over the coming years."

Since then, the company has been true to its word, shuttering studios including Volition and Campfire Cabal while also reportedly laying off staff at Rainbow Studios and Gearbox Publishing.

All signs suggest there'll be more layoffs and closures to come. Earlier today, in response to a question about potential layoffs at Rainbow Studios, Embracer reiterated to Game Developer that its current restructuring program will run until the end of the current fiscal year on March 2024.

Update: According to a new Bloomberg report, Gearbox emailed staff about Embracer potentially selling it off. In that email, Gearbox CCO Dan Hewitt acknowledged there were "many options under consideration, including Gearbox’s transfer, taking Gearbox independent, and others."

Prior to being acquired by Embracer, Gearbox operated as an independent studio. Beyond partnering with 2K on Borderlands and Battleborn, the studio also teamed with Sega (Aliens: Colonial Marines) and Ubisoft (Brothers in Arms).

Hewitt went on to stress that "nothing has been decided yet. [...] Ultimately, we’ll move ahead with whichever path is best for both Gearbox and Embracer."

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