Video game holding company Embracer Group has announced that it is “restructuring” and will undergo a series of employee layoffs, studio closures, and game cancellations in the process.
In an open letter published today (June 13), Embracer Group CEO Lars Wingefors shared that in response to “the worsening economy and market reality,” the company will be undergoing a period of cost-saving and “optimisation”.
Set to run until March 2024, Wingefors claimed the restructuring will create “growth in profitability” for the company — although it will also see workers hit with layoffs, along with game cancellations and the closure of studios within Embracer Group’s portfolio.
“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,” shared Wingefors. “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.”
While it is “too early” to say how many employees will be affected, Wingefors noted that only unannounced games have been cancelled.
Embracer Group is the owner of numerous game companies, including Gearbox Entertainment, Plaion, Saber Group and THQ Nordic. In turn, each of those groups are home to numerous studios — including the developers behind Dead Island 2, Borderlands, Saints Row, and Warhammer 40,000: Space Marine 2, to name a few.
Last year, Embracer Group purchased Crystal Dynamics (Tomb Raider) and Square Enix Montréal from Square Enix, though closed the Montréal studio just two months after buying it.
2022 also saw Embracer Group buy Middle-earth Enterprises, which gave the company rights to The Lord Of The Rings and The Hobbit.
Looking ahead, Wingefors has claimed that restructuring will make Embracer “a stronger, more efficient company” — though it remains to be seen how many studios will be closed, or workers laid off, as a result.
In other news, Bethesda‘s Todd Howard has suggested that The Elder Scrolls 6 may be his last game.
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