The troubled gaming company Embracer Group, which has the licensing for “The Lord of the Rings” series, has declared its intention to divide into three distinct businesses. The business will split into Asmodee business, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The group underwent a massive reorganization this year and sold off key gaming studios including Saber Interactive and Gearbox to alleviate debt. According to Embracer, the separation will allow the three gaming and entertainment firms to operate as independent, publicly traded businesses and provide more unique and distinctive equity stories for both current and potential investors.
The news comes after a protracted reorganization process for Embracer that resulted in the closure of three studios, the sale of two studios, and widespread layoffs among Embracer-owned companies. The business also stated in a news statement that the Middle-earth Enterprises & Friends corporation would continue to be a part of Embracer Group, which will eventually change its name and will own the intellectual property rights to the Tomb Raider and Lord of the Rings brands.
Embracer Group’s Strategic Moves: Splitting Assets, New Finance Deals, and Future Plans
Furthermore, Asmodee and Coffee Stain & Friends shares will be listed on Nasdaq Stockholm and distributed as a dividend to Embracer owners. Additionally, Embracer has signed into a new finance deal with Asmodee Group for a sum of EUR 900 million, or about Rs. 7,991 crore. According to the firm, Embracer’s obligations will be paid off and its leverage will be decreased using the profits from the financing procedure. Asmodee will continue to publish and distribute tabletop games following the transition plan, and it will keep ownership of its intellectual property. Conversely, the business stated that Coffee Stain & Friends will continue to have a “dual focus on indie and A/AA premium and free-to-play games for PC/console and mobile.”
According to the press announcement, Embracer Group CEO Lars Wingefors;
“This move has been made with the intention to unleash the full potential of each team and provide them with their own leadership and strategic direction. This is the start of a new chapter, a chapter that I intend to remain part of as an active, committed, and supportive shareholder of all three new entities, with an evergreen horizon.”
The intellectual property rights of 23 studios owned by Asmodee include popular card, board, and tabletop games including Catan, Exploding Kittens, and 7 Wonders. Asmodee is in charge of supervising the creation of licensed tabletop games inspired by Star Wars, Lego, Marvel, Netflix, Game of Thrones, and The Lord of the Rings, according to Embracer.
Embracer’s Restructuring: A Shift in Strategy and Focus
A separate “Premium” and “Free to Play” section will govern Coffee Stain & Friends operations. The former will comprise studios such as Coffee Stain, Ghost Ship, Tarsier, Tuxedo Labs, THQ Nordic, and Amplifier Game Invest. Popular games including Deep Rock Galactic, Goat Simulator, Satisfactory, Wreckfest, Teardown, Valheim, and others have their intellectual property rights held by the Premium section. Easybrain, Deca, CrazyLabs, Cryptic, and IPs including Sudoku.com, Blockudoku, Jigsaw Puzzle, and more will be available on the Free-to-Play side of operations.
Following years of extravagant spending that saw Embracer purchase many gaming studios and intellectual property rights, the firm entered damage control mode when an investment agreement for $2 billion (about Rs. 16,672 crore) with the Savvy Group, located in Saudi Arabia, collapsed last year. Embracer sold over Gearbox to Take-Two Interactive, the parent company of Rockstar Games, and divested Saber Interactive in March as part of a major restructuring exercise this year to pay off a debt of more than $1.5 billion. During the reorganization process, Embracer also closed TimeSplitters studio Free Radical Design, the recently established firm Campfire Cabal, and the Saints Row producer Volition Games.
