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Discussion Embracer: too early to start talking about future acquisitions

Lugia667

Lugia667

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Embracer say their restructure is over, but it's "too early" to start acquiring studios again

Embracer Group say that their restructure is complete after selling Gearbox, but they're not yet ready to start acquiring (or destroying) new studios.
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Earlier today, megacorp Embracer announced they were selling Borderlands developer Gearbox to Take-Two. During an investor call about the divestment, CEO Lars Wingefors confirmed that this brought an end to the restructuring process Embracer announced last year. He was also asked whether this meant Embracer had plans to start acquiring other studios again.


Wingefors said it was "way too early" to restart "the M&A engines."


"We are ending the restructuring programme now, end of March, and the Gearbox restructuring process has been part of that programme. Now we are getting approached, I would say not quite daily, but on a weekly basis, by companies that would like to acquire certain assets within the group. And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward," said Wingefors.



The companies that Embracer have chosen to sell had "negative cashflow", he said, and divesting from those businesses would make the Embracer that remains more "cashflow generative."


This doesn't mean that it's time to resume the group's previous strategy of hoovering up other companies, however.




"Looking to do more [mergers and acquisitions] deals – I think it’s way too early to start talking about restarting the M&A engines again," said Wingefors. "Now we are in the late phases of the consideration into the future of the group, and that’s our highest focus and priority – how we set up ourselves and structure ourselves, and utilise our assets we have within the group, and have them work together, and how we leverage them better working together, utilising different functions, I think that’s our focus right now, to increase profitability and cashflow generation, by simply making better products and games."


As of early 2023, Embracer owned 138 studios, including Gearbox, Crystal Dynamics, Eidos Montreal, Volition, Piranha Bytes, Ghost Ship Games, 3D Realms, 4A Games, Flying Wild Hog, Saber Interactive, Perfect World, Tuxedo Labs, Coffee Stain, Dambuster Studios, New World Interactive, Warhorse Studio and more. Most had been acquired in the past five years.


During the last twelve months, developer and publishing group Saber Interactive were split into a separate company, taking 3D Realms and 4A Studios with them; TimeSplitters developer Free Radical were closed; Saints Row developer Volition were closed; and 8% of Embracer's employees were laid off.


So hey, it's good news that they're not currently planning to restart the mergers-and-acquisitions engine, aka the creativity shredder, aka the human misery harvester, aka the C-suite fidget spinner. Maybe someone should hide their keys in case they change their mind.
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how about no, never again
 
OctoSplattack said:
Who was the madman who asked "so, now that you're done selling and closing a shitload of studios, when are you going to buy more studios?"
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I believe such a person needs to learn to read the room. Or perhaps complete a few pattern recognition exercises.
 
"So, acquiring every company within reach didn't go so well, but I just wanted to ask when you plan on trying that exact same strategy again?"

I don't know if this warrants "As always, fuck Embracer", but I wanted to say that anyway, so... I'm good now, I think.
 
I think that’s our focus right now, to increase profitability and cashflow generation, by simply making better products and games."
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Well, at least this sounds a more reasonable plan for a multinational corpo than ‘hoover everything that moves up into a package to sell to a state media fund in Saudi Arabia that totally put this master plan to purchase the assets in writing rather than whisper a promise in some backroom deal, and then run off with all the profits’.

A huge example of ridiculous, destructive (to staff) and astoundingly incompetent mismanagement in the pursuit of profit in an industry full of nonsense at its highest levels.
 
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I think that’s our focus right now, to increase profitability and cashflow generation, by simply making better products and games.
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What a novel and never heard of before concept. Making good games to sell and make money instead of gobbling up developers left and right and making money by closing them down a few months later? Preposterous!
 
Everything that exists around this company, the management, the shareholders, the restructurings, the stupid questions of the analysts, it looks like an entire season of Succession. Reality is reaching levels of absurdity that are absolutely staggering.
 
boodream said:
Everything that exists around this company, the management, the shareholders, the restructurings, the stupid questions of the analysts, it looks like an entire season of Succession. Reality is reaching levels of absurdity that are absolutely staggering.
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‘It turned out that, when buying video game studios, focusing on enabling them to make and release good video games might just be a more viable strategy than gambling on packaging half the industry for sale’
 
I hope this teaches Embracer a lesson, but realistically, it won't.

They are, above all, a holding company and the primary business of those is managing the companies under their umbrella, not making any sort of actual product.
 
Companies should probably stop gambling with Saudi money but I’m guessing no lessons will be learned
 
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