Monday, May 29, 2023

Embracer Group Stocks Plummet After Failed Partnership Deal Negotiations Cost Company An Estimated $2 Billion


Embracer Group has been on an acquisition spree, picking up companies such as Crystal Dynamics, Eidos-Montréal, Square Enix Montréal, Perfect World, and a catalog of IPs including Tomb Raider, Deus Ex, Thief, Legacy of Kain, and more. Hell, they are the ones that own Middle Earth Enterprises, who worked out a deal with Amazon Games recently to make their MMO.

But one undisclosed potential deal has fallen through and is costing Embracer a ton of money.

“Late last night, we were informed that one major strategic partnership that has been negotiated for seven months will not materialize,” Embracer said in a statement according to Reuters.

The deal that did not materialize has caused shares in Embracer to plummet 40%, an all-time low for the company. The deal was worth an estimated $2 billion in contracted development revenue over six years.

“The deal would have enabled a catch-up payment at closing for already capitalized costs for a range of large-budget games, but also notably improved medium-to-long-term profit and cash flow predictability for the duration of the game development projects.”

Embracer has said that this deal falling through has caused the postponement of a number of planned releases for games under development, cutting its profit forecast for the current year by 3-5 billion Swedish crowns (Krona).

There’s no word as of the time of this writing on who the potential partner was.

Troy Blackburn

Troy Blackburn, News Editor
Troy “Noobfridge” Blackburn has been reporting on the video game industry for over a decade. Whether it’s news, editorials, gameplay videos, or streams, Noobfridge never fails to present his honest opinion whether those hot takes prove to be popular or not.

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