After many years of unbridled absorptions Embracer Group collapsed under her own weight and fell apart into three companies. Chapter Embracer Lars Wingefors (Lars WINGEFORS) talked with Gamesindustry.Biz about the reasons for the failure: the crisis in the industry is largely to blame, but also personal responsibility Vincegefors still does not take off.

Three companies collected from three different parts of Embracer – Asmodee Group (board games), Coffee Stain & Friends (indie and services-services) and Middle-Earth Enterprise & Friends ("Lord of the Rings" and AAA-IGRA). The last two names are temporary.

About the causes of failures

Vincegefors confirmed that he is now criticized – both at the international level and in his native Sweden. He told how he reacts to criticism:

Leaders and business owners sometimes need to take guilty and with humility to admit that they made mistakes and had to do otherwise.

Of course, I deserve a lot of criticism, but I do not think that critics deserve my colleagues or companies. I can take on a lot of guilt for what happened. But in the end, I need to believe in the goals that we set for ourselves. We can achieve them thanks to the new structure.

About external causes Vincegefors says the following:

To create successful games in order to hire people and give them a job, the company must have a suitable environment. For Embracer (and for other companies similar to us) the environment has changed a lot. We had several years, in particular, 2019 and 2020, when the cost of capital was very cheap, and investors endlessly wanted to invest money for organic and inorganic growth. In addition, the gaming market grew (especially during Covid), there was a much more stable geopolitical situation, for example, in Russia. All these factors have changed a lot.

For years we thought how to adapt https://casinosnogamstop.co.uk/welsh-casinos/ to a change in the environment. But, of course, the 2023th hit especially strongly throughout the industry and on us. The capital market worsened, we needed restructuring and significant changes, including separation from Saber And Gearbox.

Vincegefors also called another reason: games Embracer were simply not successful enough.

The success of the games that we have released has decreased in recent years, because it was not enough appetite from buyers, and some products lacked quality. [The collapse was influenced by the mixture of these reasons and the cost of capital, which increased greatly. I would say that the desire of investors to invest new capital [in the game industry] completely disappeared at the end of 2022.

About why Embracer threw off her debt to the company’s production company

2023rd for Embracer ended with large debts – they amounted to $ 1.5 billion. Part was given by sale Saber And Gearbox, But the company still had about $ 963 million debt.

When Embracer They began to be divided into three branches, the remains of the debt were hung on the group Asmodee – She is engaged in board games. According to Wingforts, u Asmodee The most chances to close such a debt-business board games are much more stable than AAA-Videoigr business.

Banks adore Asmodee. The financial market does not like the volatility of the AAA-IGR. I do not think that AAA-IGR manufacturing companies should take on a lot of debts. We can say that the game business can take on a little debts, which will close thanks to mobile games and games with regular payments, but the capital market does not like to give such debts. So, in my opinion, in the business of digital games it is better to have a small debt – or not to have at all.

I firmly believe in capital, but I think that duty is a rather dangerous tool. In video games you need to be careful and not take over too much. With board games, everything is different – this is a very stable business with very stable cash flows. We greatly reduced financial risks Embracer and improved their balance and stability, [when they shifted the debt to Asmodee].

About the change of name

Vincegefors confirmed that from the name Embracer Group They will completely refuse. But this is not due to the fact that the owners want to avoid unpleasant associations after the failure of the group:

The change of names is strategic solutions that will allow all new companies to create their own unique brand, sharpened for specific business tasks and allows maximizing the potential in the market.

Sunset of the brand Embracer It looks like this:

Embracer Group will continue to formally exist at least another year, while the group is separated from it Coffee Stain & Friends. It is expected that the process will end in 2025.

Vincegefors will remain the president Embracer, And then he will focus on the new holding company, which will allow him to remain majority shareholder of all three new companies.

The name of the holding company and other details will reveal later. But she certainly will not be called Embracer Group.

In the hands Embracer There were many franchises beloved by gamers, who had to be continued before the collapse of the company – for example, TimesPliters And Deus Ex. Now these projects are canceled, and in a fresh interview Vincegefors calls not to wait from the new trio of the resurrection of all episodes:

You need to be able to adapt. We cannot blindly write out checks for everything. We cannot make all the sequels of all the franchises who want gamers and which are at our disposal. This is impossible. A company or owner who do not adapt to the environment will ultimately lose significance in business.