Massive $2 Billion Embracer Group Partnership Shakes Up the Saudi Arabian Market

Highlights

Saudi Arabia-backed Savvy Gaming Group was reportedly the previously unknown partner in a failed multi-billion-dollar deal with Embracer Group.

Embracer Group, a leading player in the gaming industry, possesses a diversified portfolio of gaming companies and is currently working on developing a staggering total of 221 games.

The specific reasons for Savvy Games' decision to withdraw from the deal remain obscure, nevertheless, this turn of events has had detrimental ramifications, including the closure of studios and the loss of employment opportunities.

One year after the surprising collapse of a multi-billion-dollar deal, it has been revealed that Embracer Group, a well-known Swedish video game and media giant, may have had an undisclosed partner in the form of Savvy Gaming Group, which is backed by Saudi Arabia. This is significant as Saudi Arabia has been investing heavily in the gaming industry, with Savvy Gaming Group expressing interest in acquiring a major game publisher to expand its presence in the market.

Embracer Group, formerly known as Nordic Games Licensing AB and THQ Nordic AB, has gained recognition among gamers due to its aggressive approach to acquisitions. The company has acquired both small studios and well-established developers such as Gearbox Software, investing billions of dollars to expand its collection of gaming companies. Moreover, Embracer Group has also acquired publishers including 3D Realms and Saber Interactive. These acquisitions have positioned the company as one of the leading players in the gaming industry. In fact, a recent announcement stated that Embracer Group currently has 221 games in development.

In a recent report by Axios, it has come to light that Savvy Games Group, a previously undisclosed partner, was involved in the failed mega-deal of Embracer Group last year. Citing four sources who were unable to publicly discuss the matter, Axios was first informed about the potential involvement of this state-owned company. Despite reaching out for further details, Embracer Group's spokesperson chose not to respond to Axios' request. Savvy Games Group, which is fully owned by Saudi Arabia's sovereign wealth fund, is chaired by Saudi Crown Prince Mohammed Bin Salman. Earlier this year, Savvy Games made headlines as it emerged as Nintendo's largest external investor, acquiring slightly over 8% of the renowned Japanese company.

The failed deal would have involved Savvy Games making a significant investment in Embracer Group, the current owner of notable franchises like Tomb Raider and Legacy of Kain, in order to support game development and publishing. Sources from Axios indicate that in late 2022, both companies reached an agreement in principle to obtain funding for Embracer Group. However, Savvy Games unexpectedly withdrew from the negotiation table before the deal could be finalized, with the reasons for their sudden departure remaining unclear.

Although the exact motives behind Savvy Games' decision to abandon the deal may never be known, its failure has had unfortunate consequences in the gaming industry. Recently, Embracer Group closed down a studio that had been operational for less than a year as part of their cost-cutting measures, resulting in job losses for numerous developers in the aftermath of the unsuccessful investment.

Source: Axios