After Embracer Group's acquisitions and subsequent troubles, the company is splitting into three oddly-named entities

[Windows Central]

The embattled Embracer Group is back in the headlines, but thankfully not for similar reasons to more recent times. It's being split up into three new companies, each with a different focus and operating independently of each other.

After Embracer Group's acquisitions and subsequent troubles, the company is splitting into three oddly-named entities : Read more

 

[fjtorres5591]

Looks like they're packaging the remnants for sale.
Embracer was always more about stock market "fun and games" (verging into Ponzi territory) than about the business of making games.

Their MO was to use their stock valuation as currency to buy random studios which raised the value of the stock, which they then used to buy more and bigger studios. Their biggest coup came when SQUARE divested their western studios at a bargain; their biggest mistake overpaying for GEARBOX.

They were, on paper, asset rich and cashflow poor, which is why the house of cards fell apart when their magic "billion dollar deal" (middle eastern sovereign fund, reportedly) fell apart leaving them unable to meet their operational expenses. They've been triaging the studios since, presumably based on operating expense vs cash flow.

Looking at the three "imaginatively" named IPO bundles, they are going back to the stock market in a bid to salvage something, anything, hoping the value of IP might bring in enough money to fund the next releases. Which might be hits but might be misses.

The problem is the bundles still need cash to run and selling stock is unlikely to generate enough to keep the bundles alive. Not in today's capital-limited money markets. The days of near zero interest rates when any non-zero return was better than nothing are over. With the return of inflation, what liquidity remains in the world markets will gravitate to "safe", conservative government bonds (mostly US, which is spooking the IMF) or high risk/high return gambles ("AI" startups).

Gaming studio bundles are neither.

There is value in those bundles; the IP and (some of) the staff. But it is mostly long tail revenues. Ergo, the bloodletting and fire sales are far from over.

It is unclear who would be buying the bundles, whole or in part. Disney maybe, as MS is still digesting ABK and Sony sees more value in Paramount. Ubisoft has troubles of its own, Tencent has its own troubles at home (staying alive, for one) and EA is being very conservative.

The soap opera has a ways to run still.