This morning, the Embracer Group announced a major transformation of the company, which will be split into three separate publicly listed companies: Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The existing Embracer Group listing on Nasdaq Stockholm will be renamed to Middle-earth Enterprises & Friends, and shares of Asmodee Group and Coffee Stain & Friends will be distributed as dividends to shareholders of Embracer Group. The listing and distribution of Asmodee Group shares is expected to occur within 12 months, and Coffee Stain & Friends shares during calendar year 2025.
Asmodee will continue its business in the tabletop market; Coffee Stain will focus on making indie and double-AA games, while Middle-earth Enterprises will produce triple-A games. Coffee Stain will include Ghost Ship, Tarsier, and Tuxedo Labs, as well as THQ Nordic and Amplifier Game Invest, featuring IPs like Deep Rock Galactic, Goat Simulator, Satisfactory, Wreckfest, Teardown, Valheim, and a couple hundred more. Coffee Stain will also continue publishing the F2P games Star Trek Online and Neverwinter Online, which are based on licensed intellectual properties. Coffee Stain & Friends will be led by Anton Westbergh, current CEO of the operative group Coffee Stain.
Middle-earth Enterprises & Friends will be composed of Crystal Dynamics, Dambuster Studios, Eidos-Montreal, Flying Wild Hog Studios, Tripwire, Vertigo Games, Warhorse Studios, and 4A Games among others, featuring IPs like Dead Island, Killing Floor, Kingdom Come: Deliverance, The Lord of the Rings, Metro, and Tomb Raider. Phil Rogers, current CEO of the operative group Crystal Dynamics—Eidos, will take the helm of Middle-earth Enterprises & Friends.
Embracer Group CEO Lars Wingefors shared an open letter to investors, highlighting the benefits of the transformation:
History has shown that diversified groups like ours can significantly enhance their chances of success by adopting a more agile, fast-moving approach and focusing on well-defined core market segments.
Numerous inspiring examples from Sweden illustrate how large enterprises have achieved greater success by dividing into multiple separate specialized companies. I am deeply motivated and inspired by these success stories and believe they offer valuable insights for our own strategic direction. The time is right for Embracer to become three public companies, each boasting sufficient scale, coherent strategies, specialized business models and empowered by visionary leadership teams. Rather than imposing conformity on thriving businesses, we should foster an environment that amplifies existing success. I am confident that this will be easier with three distinct winning formulas in specific market segments.
There is significant untapped potential within the group, which I am confident the new structure will unleash. This will empower each individual and each team to grow and excel further in their careers as well as provide them with their own leadership and strategic direction.
After acquiring dozens of developers, the Embracer Group encountered major issues following the cancellation of a $2 billion deal. The company stock crashed, and Embracer had to enter a long restructuring process that included shutting down several studios (chiefly Volition), laying off many employees across the group, and the sale of Gearbox and Saber.
