Embracer Group announces plan to split into three separate companies

Posted on April 23, 2024

Embracer Group, the Swedish conglomerate which has been making news over the last few years for gobbling up studios and franchises and then promptly shutting down or selling them for a massive loss, is splitting itself up. The company has announced that it will be dividing itself into three separate entities. One of these entities will be dedicated to the Middle-Earth franchise, to which it acquired the rights back in 2022.

As per the official press release, Embracer Group will be dividing into three separate companies: Asmodee Group, Coffee Stain & Friends and Middle-Earth Enterprises & Friends. The “& Friends” aspect of these titles is a little ambitious; after ravaging the gaming industry like a bull in a china shop by closing down, laying off or selling so many of its assets, it would not seem that Embracer exactly has a surplus of friends at the moment. The expressed intention for the split is to enable “each entity to better focus on their respective core strategies and offer more differentiated and distinct equity stories for existing and new shareholders.

The three separate entities into which Embracer Group is splitting up will have different focuses on the different elements of Embracer’s businesses. Asmodee is described as “a global leading tabletop games publisher and distributor with an extensive studio network and IP catalogue“. Coffee Stain & Friends is set to be “a diverse gaming entity with a dual focus on indie and A/AA premium and free-to-play games for PC/console and mobile”. The release also points out that Coffee Stain’s focus will include “a high degree of recurring revenues“, so be on the lookout for plenty of additional monetisation in its products. Finally, Middle-Earth Enterprises & Friends is predictably supposed to focus on “AAA game development and publishing for PC and console,” as well as developing games for the Middle-Earth and Tomb Raider franchises, among others.

It certainly remains to be seen if this dissolution will be the saving grace that Embracer Group needs. The gaming industry has been plagued by significant layoffs across the board in the last few years, even at big companies like EA, Microsoft and PlayStation. Thus, a drastic strategy like this to streamline what was otherwise an unwieldy and unfocused entity may be the right move in the grand scheme of things. Still, these kinds of massive business overhauls are rarely without turbulence, As such, we can likely expect more layoffs and restructuring in the months to come. The dissolution of Embracer Group into Asmodee Group, Coffee Stain & Friends and Middle-Earth Enterprises & Friends is expected to occur in 2025.