One of the big stories of the past year has been the collapse of Embracer Group, as the failure to secure a major $2 billion investment resulted in the company cutting loose several major studios, either by selling or shuttering them, and laying off 1,400 employees. One of the studios Embracer let go of was Saber Interactive, which was sold to new company Beacon Interactive for a relatively meager $247 million (Embracer originally paid $525 million for them). You’d think the head of Saber might be bitter about this, but instead the company’s founder Matthew Karch is still singing Embracer’s praises in a new GamesIndustry.biz interview.
Interestingly, Karch provided a bit more detail on how Embracer got in trouble, from his perspective as a former board member with the company. As most would agree, Embracer was acquiring things too fast, with each one of its many divisions making their own purchases, making it difficult to get a full-company view of what was going on. What ultimately put Embracer over the line was the 2022 purchase of French tabletop game publisher Asmodee for $2.75 billion. That acquisition put Embracer into debt, and unfortunately, a $2 billion investment from Saudi Arabia’s Savvy Games Group that would have cleared up the debt fell through.
Despite this, Karch insists Embracer boss Lars Wingefors and other company brass tried to minimize layoffs as much as possible.
“But in my mind, nobody has been guided by more of a sense of fairness and reasonableness than Lars [Wingefors]. The process that we’ve had to go through to terminate studios has absolutely been… it’s killed us. […] I would say Embracer tried harder than anybody to save as many jobs as it could.
Look at Gearbox. Gearbox just sold, right? The employees that were within that company remained in that company until after the announcement, right? Because Lars didn’t want to let anybody go, he really wanted to keep everybody. So I think he gets a bad rap.”
Going forward, Karch says he “wouldn’t bet against” Embracer, as they still have a rich collection of IP and studios and Wingefors is more confident than he’s seen him in a long time…
“But I wouldn’t bet against Lars right now. He’s really on top of it. I haven’t heard him this confident in a long time and I think they’ve made the company small enough – still big, but small enough – that it’s manageable… They have some great stuff that I know of in the works that’s unannounced that I think people are gonna love. So I’m bullish on them.”
From the outside, the situation with Embracer still doesn’t look great, but it’s interesting to see a more inside perspective. Can Embracer turn it around? Maybe, but only if they learn from their past mistakes.
What do you think? Any optimism about Embracer’s future? Or is it a steady downhill tumble from here?
