Embracer Being a Poorly Ran Company

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Open letter by Embracer Group CEO on restructuring program - Embracer Group

Everyone, This morning we announced a restructuring program across the Embracer Group that will make us a leaner, stronger and a more focused, self-sufficient company. I want to share some background and context to this decision – and what it means for us going forward. During the past years...
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Everyone,

This morning we announced a restructuring program across the Embracer Group that will make us a leaner, stronger and a more focused, self-sufficient company. I want to share some background and context to this decision – and what it means for us going forward.

The program is divided into different phases until March 2024 with focus on cost savings, capital allocation, efficiency and consolidation. The initial phase, which is initiated immediately, mainly targets cost savings across the group. The next phase, which also starts immediately, will require further analysis to determine specific actions. The last phase will focus on internal consolidation, further resource utilization and more synergies across the Group. The actions for each affected company will be implemented by the new interim COO and CSO in collaboration with each operative group CEO and management teams. Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this.
It is painful to see talented team members leave. Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position and I don't have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly.

The actions will include, but not be limited to, closing or divestments of some studios and the termination or pausing of some ongoing game development projects. It will also include decreased spending on non-development costs such as overhead and other operating expenses. We will reduce third party publishing and put greater focus on internal IP and increase external funding of large-budget games.



Actions will cover, but are not limited to:
  • Matthew Karch appointed interim Chief Operating Officer, and Phil Rogers appointed interim Chief Strategy Officer, to co-lead the program planning and implementation
  • Reduction of general overhead, corporate, publishing and SG&A costs
  • The closing of studios and termination of projects, that have not yet been announced and with low projected returns
  • Creation of a more comprehensive, centralized process for game investment and progress review, while maintaining creative freedom
  • Consolidation of companies and businesses, including review of operative group structures
  • Reduction of investments into external development with greater focus on internal development based on owned or controlled IP
  • Increased external funding of internally developed, large-budget games
  • Renewed focus on the Group's main business areas
  • Implementing a centralized and standardized, more data-driven and precise approach to game forecasting


From a few weeks ago

www.gamespot.com

Embracer Group Loses Undisclosed $2 Billion Deal Amid "Challenging Year"

Embracer Group's latest quarterly results revealed that the large publishing company recently had a deal fall through that was worth $2 billion.
www.gamespot.com www.gamespot.com
 
  • Informative
Reactions: menace-uk-
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www.tweaktown.com

Embracer will cancel games and close more studios to save costs

Embracer Group CEO Lars Wingefors tells investors that the digital games empire will shrink some as it attempts to shrink costs and reduce spending.
www.tweaktown.com www.tweaktown.com

"We are making good progress on the restructuring program. We are tracking towards the targets, including reducing capex by at least SEK 2.9 billion and overhead costs by at least SEK 0.8 billion by FY 2024/25, as well as reaching a financial net debt below SEK 8 billion by the end of this financial year.

"Initial actions have been taken on closure and other initiatives to reduce the number of projects and studios and overhead savings initiatives have been defined in co-ordination with the Operative Groups.

"With a series of initial actions now taken, we expect further savings after the completion of a global review of the existing pipeline, which is currently ongoing. This review will guide our capital allocation to optimize return on investment.

"The purpose of the program is to operate with efficiency across the group and to reduce business risk in the short-term."
 
karmakid said:
Word had it that xbox was gonna partner up with them on something and then they stepped away…. Maybe we’ll get some statement later saying something along the lines of “we’re reevaluating our impressions of Embracer/gearbox.
Click to expand...


That was guess work. They confirmed the Saudi group was the one that backed out and lost them $2Bn
 
  • Informative
Reactions: karmakid
The Wolf King said:
That was guess work. They confirmed the Saudi group was the one that backed out and lost them $2Bn
Click to expand...
Would still be cool if Xbox partners up or something…honestly they need to go after crystal dynamics, they’d be a great sister company to the coalition, with all their unreal engine knowledge they hold
 
I remember the BS theory going around last year that they bought the companies/IPs off Square with an agreement in place for MS to buy them as soon as the Acti deal was done.
 
Embracer is about to have a fire sale of talent and studios. Wonder who's in the immediate acquisition market?
 
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