After a period of layoffs, game cancellations, and studio closures, Embracer Group says its restructuring period is now over. This process began last year and lasted for nine months, but now that it’s over, don’t expect Embracer to start acquiring new studios anytime soon. During a recent investor call, CEO Lars Wingefors said that it was “way too early” to start talking about mergers and acquisitions again.
“We are ending the restructuring program now, end of March, and the Gearbox restructuring process has been part of that program,” Wingefors said (via Rock Paper Shotgun). “Now we are getting approached, I would say not quite daily, but on a weekly basis, by companies that would like to acquire certain assets within the group. And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward.”
Wingefors added that the companies Embracer sold had a “negative cashflow” and separating from them has made the company “cashflow generative”. Embracer won’t be going on a buying spree again for a while, as Wingefors added that the company will instead be focusing on increasing profitability by making “better products and games” using its available assets, IPS, and studios. “I think it’s way too early to start talking about restarting the merger and acquisitions engines again,” Wingefors said.
Since last year, there have been major changes at Embracer as Saints Row developer Volition and TimeSplitters studio Free Radical were closed, 29 games were canceled, and 1,400 people were laid off in six months. Recently, Saber Interactive divested itself of Embracer Group and Take-Two Interactive purchased Gearbox Entertainment from the company for $460 million.
All of these cuts and sales were partly made due to a major deal falling through, which was later revealed to be a pact with Saudi Arabia’s Savvy Games reportedly valued at $2 billion.
