The video game industry has been beset with layoffs and canceled projects in 2024, and one company in particular, Embracer, has received a wave of criticism for laying off staff, closing studios, and cancelling games after a huge hiring spree and growth period years earlier.
Embracer CEO Lars Wingefors said in a new interview that, as the CEO, he deserves criticism. But he says there is a job to be done, and he’s plodding ahead to try to “always maximize shareholder value in any given situation.”
“It’s been painful,” he told GI.biz. “But I still believe in what we do, I believe in my teams and the vision we set out. I also believe the public markets, if we do it right, are a fantastic place to finance your business and tap into both investors and the debt market.
“But you need to execute well. If you do, it could be a fantastic platform to enable growth and to really have a competitive edge.”
In February this year, Embracer disclosed that it canceled 29 unannounced games and laid off nearly 1,400 people in the previous six months as part of its previously announced restructuring effort.
Embracer made these drastic cuts in part due to a major deal falling through at the 11th hour, which has subsequently been revealed to be a pact with Saudi Arabia’s Savvy Games. Embracer previously took $1 billion from Saudi Arabia and defended that decision when people criticized Saudi Arabia’s position on human rights.
Wingefors said that as the leader of Embracer, he needs to “take the blame” and “be humble” about mistakes made.
“I’m sure I deserve a lot of criticism, but I don’t think my team or companies deserve all the criticism. I could take a lot of that blame myself. But ultimately I need to believe in the mission we set out and that is still valid, and we are now enabling that by doing this [new] structure,” he said.
The new structure Wingefors is referring to is Embracer’s decision to split the company into three divisions in an effort to become more profitable.
Wingefors also touched on why Embracer bought so many studios and staffed up so substantially years ago. The COVID pandemic led to a surge in revenue and potential opportunities for companies, and Wingefors said “everyone” was behind his decision to ramp up so significantly at the time. However, the reality today is “different and it’s painful and we need to adapt to it,” he said.
Some of the most high-profile moves from Embracer included the reported cancellation of a Deus Ex game and the closures of Saints Row studio Volition and TimeSplitters developer Free Radical. Embracer has also cut jobs at subsidiaries like Crystal Dynamics and Beamdog, among others. The company sold Gearbox to Take-Two for $460 million.
The video game industry layoffs are not limited to Embracer and its studios, as Microsoft cut 1,900 positions from its gaming team and League of Legends developer Riot also cut hundreds of positions, representing just a small number of gaming cuts so far in 2024.
For more, check out GameSpot’s deep-dive feature on video game industry layoffs.
