Embracer Group, That One Company That Owns Everything, Becomes Three Companies That Own Everything

Like getting gremlins wet, we now have more Embracer Groups–the company announced today that the one giant company is splitting into three companies–but also no Embracer Groups, since none of these companies are called Embracer. Lars Wingefors, the man who oversaw the Embracer “restructuring program” that decimated the games industry, will stick around to keep making money.

Embracer will spin off into three separate publicly listed companies, each holding a different slice of the Embracer pie. Asmodee Group will focus on tabletop series like Catan, Ticket to Ride, and the rest of its “300+ owned IPs.” Coffee Stain & Friends (and friends!) will consist of mobile, free to play, and indie games including the Deep Rock Galactic and Goat Simulator series and licensed games like Star Trek Online. Lastly, Middle Earth & Friends (feel free to pause if you need a moment) will focus on Embracer’s tentpole AAA offerings like Lord of the Rings, Tomb Raider, Dead Island, and Metro. Middle Earth & Friends “will remain within the current listed company Embracer Group, which will eventually be renamed” when the splits happen through this year and 2025.

Why is this happening? The short answer–prepare to be shocked–is money. The press release notes that “Embracer Group has, through Asmodee Group, entered into a new financing agreement amounting to EUR 900 million. The proceeds from the financing are used to repay existing debt and reduce leverage in the remaining Embracer Group.” It also notes that “Each entity will be able to fully utilize its own balance sheet, its own set of financial targets and optimal financing structure and capital allocation strategy that enable their growth ambitions.” As three separate companies, Embracer can do more of the mystical business math that lets it fail upward while putting money in shareholders' pockets. In fact, Embracer stock is up 18% on the back of this news.

In an open letter, Wingefors writes, “For me, building a business is not about reaching a certain size or position, it is about the journey to turn many small and sometimes a few large steps into something greater.” Those steps have included laying off around 1400 people, closing studios and cancelling games, and basically smashing every toy Wingefors crammed into his toy chest. Wingefors also writes, “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… Rather than imposing conformity on thriving businesses, we should foster an environment that amplifies existing success.” That Embracer spent years consolidating the games industry only to hit on the idea of diversifying it again but worse off is the kind of punchline you’d expect from 2024. Wingefors writes that “I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon.”

I look forward to the Mormon Church-style scoldings that will inevitably follow any time we call these companies Embracer once this process is complete. While I don’t entirely think this was some kind of rebrand due to how tainted the Embracer name has become, at least we can now associate Embracer with ridiculous names (and friends!!) as well as layoffs, which is a small bright spot in Embracer’s dark legacy.

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