Why is this video game company the most hated at the moment?

Game news Why is this video game company the most hated at the moment?

Things are still happening at Embracer Group: The developers of the Star Wars: KOTOR remake, Saber Interactive, have reportedly left the struggling parent company in a $500 million deal to go independent. The $500 million is far less than the $525 million the Swedish giant paid to acquire the company in 2020, just four years earlier. According to Bloomberg, the remake is still in production, although there are still minor doubts about its release. Recall that last November, Embracer CEO Lars Wingfors refused to answer a question about the remake during a financial presentation, saying only: “I notice that everything I say about this makes headlines, so this is my only comment“. We remind you that Saber Interactive is also developing Warhammer 40,000: Space Marine 2, a game eagerly awaited by fans of the license, and whose release is scheduled for September. For some, leaving the box at such a climax is insulting. At the same time, Kotaku claims that the studio Gearbox, better known to you for its Borderlands license, will be sold to an unnamed buyer and that sale is currently “being finalised”. Embracer Group acquired Gearbox in 2021 for $363 million. But what’s going on at Embracer, which has bad news and currently inherits the title of the most hated video game company of the moment?

Star Wars: Knights of the Old Republic

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Embracer: Breaker of dreams and jobs

In the “mass layoff” category, Embracer is currently the champion and 1,387 people have been laid off since restructuring began last June. Embracer’s total workforce decreased by 904 people during the second quarter of its fiscal year, and then another 483 during the third quarter. It’s simple 8% of total employees of the group. We recall that even the group 29 unannounced games cancelled In two quarters, an absolutely enormous figure. He also closed several of his prestigious studios, including Free Radical. who was working on a new installment of the TimeSplitters series

, now defunct, and Volition, the developer of Saints Row. Suffice it to say that the Swedish giant’s reputation has been in stark contrast in recent months, especially with thousands of nostalgic fans waiting for their beloved license, the spiritual successor to the GoldenEye license, to return in favor of what’s missing. For almost twenty long years. Series creators, Steve Ellis and David Dock were also invited to participate in this revival. In the eyes of the world, Embracer is now nothing more than a dream breaker. “Today we must confirm the official closure of Free Radical Design and say goodbye to many remarkable, talented and hardworking people.“, parent company Playon hinted on LinkedIn a few days before Christmas. This is the second time Free Radical has closed its doors, enough to break even more hearts.

Recently, Embracer was still leaving thousands of players injured Canceling Deus Ex game. Eidos Montreal lost 97 people in late January as part of the cancellation of the project, which had been in the works for two years. The studio resumed work on the franchise in 2011 with the excellent Deus Ex Human Revolution. The firm also released Deus Ex The Fall on iOS and Android, as well as Deus Ex Mankind Divided on PC and consoles in 2016. After an absence of more than eight years, suffice it to say that news about a new episode was eagerly awaited. If we first saw the Embracer Group as the saviors of forgotten licenses, they are now their terrifying executioners.

Deus Ex Mankind

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Embrace the greedy monster

For those who have never heard of it, Embracer is a holding company that, by definition, takes a financial stake in other companies and controls their activity. Since 2017, the behemoth formerly known as Nordic Games Publishing or THQ Nordic AB has been consolidating over several game publishers, accumulating buyouts and taking over major projects. YouTuber Monsieur Plouf talks about it very well in a video called “The Video Game Industry Is Going Bad”, in which he also reminds us that The group only paid for the rights to Lord of the Rings for a modest sum of $395 million. Until recently, these gourmands had no fewer than 138 in-house studios spread across 40 countries, including some brands with strong emotional value thanks to the studios behind Tomb Raider, Deus Ex and Borderlands. In 2022, Axios also reported that the group spent $1 billion on 20 acquisitions.

But now in 2023, Sweden announces a major restructuring, dedicated to making the company “lighter, stronger, more targeted and more autonomous”. Translation: the studio, and therefore a few thousand employees, will be drained down, as will some. Big video game projects. In an open letter, CEO Lars Wingfors says he wants to focus more on internal IP and seek external financing. For his big projects. “The era of big spending is coming to an end; This is the time to make your investments profitable,” says Bose, who was investing just a year ago. Eventually, the embracer’s eyes will be bigger than its belly.

“If you look at the 8% reduction in the Embracer workforce, it’s clear – I don’t know the figure for the whole sector, but I think it’s something that everybody has to overcome. I mean, like I said, it’s because of more. For the overinvestment of previous years because everyone put all their capital into the games and maybe a little more in some cases” – Lars Wingfors during a Q&A on the company’s results.

One analyst pointed out that the number of projects in Embracer’s development has dropped by 20-25% since the restructuring and that, “in retrospect, this is clearly contributing to greater industry investment.”

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Collaboration of failure

But why is this backpedaling so brutal? The CEO, for his part, appoints “The deterioration of the economy and the reality of the market“When experts actually saw another, more devastating cause. Embracer Group’s financial woes began in earnest after the collapse of a reported $2 billion deal with Saudi government-funded Savvy Games Group.. Savvy is more concretely the vehicle through which the Middle Eastern country invests in the video games industry; It has already invested in Nintendo, Take-Two and Capcom. Before this failure, the company had already invested $1 billion in the Swedish group, with the idea of ​​encouraging it in its mad quest for investment and strengthening Savi’s presence in the market. A collaboration that has naturally drawn heavy criticism due to numerous human rights violations committed by the Saudi government. And even if Wingforce insisted that the company’s Swedish values ​​remained “unwavering” whatever happened, it was careful not to reveal the identity of its benefactor before Axios did so in its stead. The reason for the abandonment was never made official, but at the same time, Embracer lowered its profit forecast for the year 2023 due to multiple delays in the games and ended the year with a debt net of 1.4 billion euros.

So let’s recap: Embracer, a newcomer to the games market, dreamed of being the savior of old, beloved licenses by buying up several stalled AA studios before demanding millions of dollars from the Saudi government and failing miserably, forced to dissolve. The studio was acquired by themA quick tour of s networks reveals the disillusionment felt by the company: “A classic case of foolish investors who gambled hundreds of careers on unrealistic plans and bad bets and then lost everything.” condemned an internet user on Reddit, while another recalled: “I remember 6-12 months ago I was really excited that all these classic studios and IPs were getting a second chance. Today, this is no longer the case” and on Twitter, a similar observation: “I hate the Embracer Group with a passion. Do you buy all these publishers/developers just to shut them down? Absolutely ridiculous“