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Embracer is considering options for its U.S. game developer Gearbox Entertainment including a sale as Europe’s largest gaming company looks to shore up its finances, three people familiar with the matter told Reuters.
Embracer is weighing selling the unit, which is known for first-person shooter game Borderlands, after receiving interest from third parties, two of the people said.
Embracer, majority owned by founder Wingefors, purchased Gearbox in February 2021 in a deal that valued the business at up to $1.4 billion at the time.
Gearbox marketing materials are already available for potential buyers, which consist mainly of international gaming groups, said two of the people.
The sources, who requested anonymity as the matter is confidential, cautioned a deal may not happen.
A lot of studios accepted the sale to Embracer because of the decentralized studio model. I hope they took into account the risk of a subsequent sale to a more centralized owner…
Embraer because of the decentralized studio model
How is Embracer group a decentralized studio model? When ever I look them up I don’t get much information. I just hear them buying studios then shutting them down.
This is actually new. They very rarely shut down studios until last month.
When THQ fell apart a about a decade ago, they bought the trademark and were doing business as THQ Nordic for quite a while.
Changed their name to Embracer a few years ago for clarity because, confusingly, one of their publishing arms is THQ Nordic GmbH.
As THQ Nordic (and later Embracer), they’ve been buying up studios (and IPs) for years. Being a holding company meant they were relatively hands off when it comes to development.
Being bought by them actually majorly increased job security, because they tended to just let studios do their shit, and kind of “understood” that a lot of their studios focus on relatively niche audiences, so they didn’t mind taking a financial hit here and there.
All that really mattered was whether or not the IP in general was profitable.
Then they had some sort of deal fall through or something earlier this year and that’s when things got a little shaky. Basically, they lost a couple billion dollars and now need to make “cost-saving measures”.
Now the commercial failures and lack of interest in certain IPs means less job security than it did about a year ago.
This makes me worried about Eidos Montréal and Crystal Dynamics. Particularly Deus Ex, since it was looking like Eidos might eventually get to finish its Human Revolution/Mankind Divided trilogy.
Their strategy was always diversifying in ways that other big publishers stopped diversifying, buying old neglected and mismanaged IPs for pennies on the dollar. If this strategy doesn’t work, then I weep for what video games could have been, because this lack of diversification is why I can’t get a decent racing game or first person shooter anymore.
Yeah, I was really happy when they got Eidos and Crystal Dynamics out of Square’s hands. Deus Ex continuation finally looked like a possibility.
Losing Eidos would be especially bad for those of us who are fans of immersive sims.
And with Deep Silver, they excelled in giving us the great Eurojank RPGs we know and love (I’ll still die on the hill that Risen is an entertaining trilogy, probably because of the major tone shift after the first game).
Did not know they started as thq Nordic etc thanks for info. I tried looking them up a while ago but couldn’t find anything on it. Thnaks
Wikipedia is your friend for quick information: https://en.wikipedia.org/wiki/Embracer_Group
Beats Google very often, in my experience.
I always treat Wikipedia as a first stop for a general overview under the caveat that not all information may be accurate or complete. From there, I typically use google to look up more info on specific events and such, or sometimes check the referenced sources if they’re available.
Exactly what I do! I just wanted to keep my previous comment short.
That is reasonable. Short comments are easier to digest and quicker to write.
Unfortunately, I am not a particularly reasonable person.
Each publisher operates independently. So far, to my knowledge, they’ve shut down studios that were spun up to work that $2B deal that fell through; and Volition, who haven’t made a hit game in a decade.
Seems sorta weird they’d be looking to offload them for financial reasons. Gearbox seems like it’d be one of their more profitable studios.
Based off the article, it sounds like it was purchased quite recently as well. My personal guess is Embracer was buying up studios faster than it could support, counting on getting more funding down the line. Then Embracer had a deal fall through and realized they were laden with debt and had to drop the load.
Maybe Gearbox was giving the worst return on investment since it was such an expensive purchase which made it the prime target to sell.
after receiving interest from third parties
Someone came along and said they’d like to buy them. Perhaps at an attractive offer given the deal that fell through or perhaps at an even higher price than Embracer paid for it. Anyone would consider a sale at a decent price if someone approached them with the offer.
You think? The last game they put out was that Tiny Tina’s Wonderlands one, and I don’t think it did gangbusters.
They basically have one IP and it keeps getting staler and staler.
Gearbox is also a publishing arm, which recently put out Remnant II, and they seem to have a stake or ownership in Risk of Rain, Bulletstorm, and Torchlight.