GamesAfter taking on $1.5 billion in debt over a $2 billion gamble, embattled Embracer CEO responsible for over 1,400 layoffs breaks out classic scapegoats: Russia and CovidWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.
GamesAfter taking on $1.5 billion in debt over a $2 billion gamble, embattled Embracer CEO responsible for over 1,400 layoffs breaks out classic scapegoats: Russia and CovidWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.
When you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.
(Image credit: Deep Silver)
The embattled CEO behind more than 1,400 industry layoffs, seven total studio closures, and nearly 30 canceled games has blamed his calamitous premiership of the Embracer Group on two classic scapegoats: Russia’s invasion of Ukraine and the Covid-19 pandemic.
In an interview withGamesIndustry.biz, Lars Wingefors - who acknowledged that he"deserved a lot of criticism for his disastrous impact on the industry"- explained that as a public company, Embracer Group needed to have the “optimal structure” in order for the many, many studios it spent the last few years acquiring to succeed. Sadly, the company had failed to ensure that optimal structure.
According to Wingefors, that’s because “to create successful games, and to retain and hire people, the company needs to have that [optimal] environment, and the environment for Embracer - and similar companies for that matter - has changed a lot.” Through 2019 and 2020, Wingefors points out, “the cost of capital was really cheap and the willingness from investors to invest into growth organically and inorganically via M&A was endless.”
“We also had a gaming market booming, especially during Covid, and we had a much more solid geopolitical situation, for example, in Russia. All those factors have changed a lot.”
There’s no denying that the conflict in Ukraine and the ongoing impact of the pandemic have left their mark, but Wingefors appears to be singing from the same hymnbook as the UK’s Conservative Party here, not least because, like his political peers, he appears to be glossing over the self-inflicted elephant in the room. While it’s a fair assessment that investment in the games industry has dried up significantly in recent years, it’s also worth pointing out that, at around the same time, “we also decided to take on debt for the first time in our history.”
To try and fix his mess, Wingefors has announced that Embracer Group will be split into three different companies - includingone dedicated to Lord of the Rings- changing the parent company’s name, and parceling roughly $960 million in remaining debt out to one of those child companies. That company, which will be known as Asmodee Group - is reportedly responsible for much of the remaining debt, and is also thought to be best-positioned to earn that money back.
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Embracer Group quietly cancelled 29 unannounced games and shut 7 studios within six months last year.
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1Nemesis review: “A magical sense of tension”
1Nemesis review: “A magical sense of tension”
1
Nemesis review: “A magical sense of tension”
2Arcs review: “A whole lot of game in a small package”
2Arcs review: “A whole lot of game in a small package”
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Arcs review: “A whole lot of game in a small package”
3Path of Exile 2 review: “A stellar start to a thrilling and brutal dark adventure”
3Path of Exile 2 review: “A stellar start to a thrilling and brutal dark adventure”
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Path of Exile 2 review: “A stellar start to a thrilling and brutal dark adventure”
4Indiana Jones and the Great Circle review: “The best adventure Indy has embarked on in over 30 years”
4Indiana Jones and the Great Circle review: “The best adventure Indy has embarked on in over 30 years”
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Marvel Rivals review: “So preoccupied with trying to be like Overwatch that it forgets to play to its own strengths”
1Sonic the Hedgehog 3 review: “Keanu Reeves as Shadow is wasted whilst Jim Carrey steals the show”
1Sonic the Hedgehog 3 review: “Keanu Reeves as Shadow is wasted whilst Jim Carrey steals the show”
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2Mufasa: The Lion King review – “It’s no Hakuna Matata but this Disney origin story is a class above the 2019 movie”
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4The Lord of the Rings: The War of the Rohirrim review – “An uninspired expansion of the most iconic screen take on Tolkien”
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5Cobra Kai season 6, part 2 review: “Returns to the sort of hard-hitting form that made it such a fan favorite in the first place”
5
Cobra Kai season 6, part 2 review: “Returns to the sort of hard-hitting form that made it such a fan favorite in the first place”