Embracer Group’s mystery partner in the collapsed $2bn publishing deal which saw dire financials taking a turn for the worse and even precipitated a period of restructuring and layoffs at the company, has been outed as Savvy Games Group.
Axios Gaming author Stephen Totilo made the revelations in his newsletter and credited four unnamed sources close to the matter. Totilo also says he was provided with documents related to the deal gone awry. However, he also notes that the sources were unclear – or unable to say – why Savvy stepped away from the deal. At the time of writing, Savvy or Embracer are yet to provide comment.
Savvy Games Group is the gaming subsidiary of Saudi Arabia’s Public Investment Fund, the group which has ambitions to invest more than $38bn in the gaming industry.
Savvy have become a major force to be reckoned with in mobile gaming, with their acquisition of developer and publisher Scopely but this latest twist in the Embracer tale may raise questions about their level of commitment to their investments and their overall strategy going forward.
Too many cooks?
Embracer had been on a winning streak with their approach of high profile acquisitions continuing to build out a star-studded portfolio. However, on the eve of the announcing their financials, an as yet incomplete unannounced deal worth approximately $2bn to company, fell through. This lead to Embracer Group head Lars Wingefor having to deliver a double-whammy of strained financials, plus no big deal to brighten the outlook. This sent Embracer stock into a free fall as the company went in damage control and a raft of measures to set the company’s finances right, that continues as the company prepares for their new financial report.
It has already been asked as to why Embracer put so much weight on a deal that had only been verbally agreed, however these new revelations will raise questions as to why Savvy committed to the deal and what made them pull out with such timing.
