Breaking News: Leading Publisher Set to Terminate Games and Shut Down Studios!
Leading global publisher takes strategic measures to optimize resources, resulting in game cancellations and studio closures to streamline operations
Swedish gaming giant Embracer Group has recently announced a significant restructuring plan that will lead to the cancellation of multiple games and the closure of certain studios. This move is expected to mark the end of Embracer Group's extensive acquisition spree, during which it acquired the rights to popular franchises such as Lord of the Rings, Tomb Raider, and Deus Ex, among others.
Despite expressing interest in acquiring more game companies as recently as April 2022, Embracer Group had already commenced extensive cost-cutting measures prior to that. As a result, it has already shut down and partially integrated various studios, including Onoma (previously known as Square Enix Montreal).
Those cuts are set to increase as Embracer Group CEO Lars Wingefors announces a significant restructuring effort aimed at enhancing the company's overall sustainability. In a June 13 open letter, Wingefors attributes the changes to a deteriorating global economy, prompting the Swedish conglomerate to revamp its entire strategy and shift from an acquisition-driven approach to a highly cash-flow generative business by the end of the year. Consequently, Embracer is actively evaluating its current operations, considering the closure of certain studios and the potential pause or cancellation of several ongoing game development projects.
The full impact of these cuts is uncertain, as Wingefors acknowledged that the company is still determining the extent of its ongoing restructuring. Prior to its recent acquisition spree, Embracer Group had 150 games in development, a number that has likely grown with the numerous studio purchases it has completed.
In addition to game cancellations and studio closures, Wingefors hinted at other measures that the conglomerate is currently considering. Although he did not provide further details, this could potentially have negative implications for projects within Embracer Group, such as the games archive dedicated to preserving gaming history, which only recently opened in mid-2022.
Some of Embracer's relatively young subsidiaries, including Alkimia Interactive, are at risk due to this development. Alkimia Interactive, a studio based in Barcelona, Spain, was established in 2020 with the aim of developing the Gothic remake. In the same year, Embracer also founded Ashborne Games and Nine Rocks Games, and in 2021, the company opened three more studios. However, most of these studios have not yet released any games.
