Embracer Starts Shutting Studios as the Downsides of Consolidation Surface

The writing was on the wall, can't buy everything and expect to be able to manage all these studios, games development isn't cheap.

It's clear they expanded too fast.
I do hope we get a good and stable publisher from this.
I have hopes from them and they have already delivered cool stuff such as Darksiders 3, relaunched kingdoms of amalur, warhammer 40k space marine 2 and hopefully the return of legacy of kain and deus ex. There is also the kotor remake.

I get the impression Embracer are people new to this world and just thought splashing money around will work, its bit them on the arsw and now the workers suffer for it sadly.

Embracer always seemed like some wild scam. Ridiculous that they were employing so many people so recklessly.

Microsoft will do the same once they out of the console business.

If microsoft gets tired of losing money, probably start seeing it soon enough on their end

This is what is going to start happening to all of the studios that Microsoft has bought. I think Arkane Austin is going to be shuttered before long and MachineGames will be closed when their Indiana Jones game (and the next Wolfenstein) fails to recoup development costs because MS felt the need to exclude the PS5.

its THQ all over again

@DennisReynolds I wonder if Embracer is going to be acquired soon as they seemingly flew too close to the sun when that $2 billion fell through. My guess is that Tencent is likely to buy them, or maybe Amazon since they already bought the rights to Tomb Raider (Sony should've bought that).

Did they buy those studios then shut them down after?

embracer group worth in
2016 0.26 billion
2021 11.56 billion
2023 3.78 billion

the company is worth 1/3rd what it was 2 years ago

maybe the game the studio was making wasnt good. studios get shut rather than ploughing money into finishing doomed projects

Buy all the studios!
Close all the studios!
Profit!!

@DennisReynolds the CEO has been either in game retail or studio management (THQ Nordic) since the 90's so he knows the industry. Quite why the Saudi government is funding his consolidation of the industry is another question though.

@theSpectre If i was Jim Ryan i would just buy the studios they got from square enix from embracer before they shut them down.

Who saw this coming. "everyone"

@Flaming_Kaiser Embracer didn't.

I'm sorry, 131 STUDIOS AND ACROSS 15,000 EMPLOYEES??? What the hell are these guys even putting out with that many people on deck???

@theSpectre @Rmg0731 just like the unfortunate employees of Manchester Studio, Japan Studio & Pixel Opus over the last three years. Sony isn't immune either as its buying studios, closing them & making record profits from it now. Unfortunately it's business I'm afraid.
I can't see Microsoft closing Arkane Austin or Machine Games due to Games Pass needing regular content. Redfall was forced to be a live service by Bethesda & is being allowed to be fixed by Microsoft. Plus there next game will be single player they confirmed . If there AAA aren't successful they may be forced to make AA titles instead. But only time will tell as Microsoft also payed off 10,000 staff accross the board.

Didn’t Embracer also acquire other things like Theme Park material and other non video game bits? Or have I made that up?

Personally don’t think Microsoft end up going the same way. I know people like to bring them up in every single article like this but Microsoft are after studios to feed GP with consistent content.

They seem like a virus or a cancer, just consuming things for the sake of it. It feels like it shouldn't really be allowed to buy 1000s of people's careers and then terminate them - at least temporally.

Was any effort made to sell the studio to someone else or give it back to independent ownership before they closed it?

…or was the first thought of upper management to simply fire and forget?

131 studios confirms one thing to me. There are too many game devs and studios in the market overall even without Embracer. The market will inevitably shutter a huge number of them.

With regards to Embracer they bit more than they could chew and SE were smart to remove those western studios. Though even their own mobile and MMO games are struggling apparently.

I never understood what the Embracers group plan was never made any sense to me and they are not really releasing a massive amount of games. I would guess Dead Island 2 the biggest game they have released?

@4kgk2

Sony is no better than Microsoft because it would close its studios just like Microsoft.

@Areus

It's Sony's own fault for not buying the studios from Square Enix because Square Enix wanted to sell those studios.

@Rmg0731

Microsoft can easily make a lot of money from mobile games because mobile games are the biggest earners in the gaming industry. Mobile games make more money than PC+consoles together. Sony should buy as many mobile game developers as possible, because it will make more money from mobile games than from PlayStation games.

@Dark_Knight It's true - just ask Studio Liverpool, Japan Studio, Evolution, etc. And just look at what a repetitive, lack-of-imagination state we're in now.

@DennisReynolds The gang has money to spend.

Well if that doesn't sound like a great reason for studios to stay independent I don't know what will...

On the one hand there’s independent Larian Studios and then there’s studios who get embraced by death’s embrace in the form of Embracer group

@sanderson72

Sony recently closed the PixelOpus studio, which clearly shows that Sony is no better than other publishers, eg Microsoft, Embracer Group....

@Areus

@Dark_Knight Buying everything isn't feasible you still have to create games and that isn't cheap.

What's most important is the IP's as its IP's that will make Money - assuming you have Studio's you can rely upon to keep making those IP's.

Studios - especially the 'creative' talent behind those IP's often leave and form new Studios to create 'new' IP's instead of churning out sequels etc. When MS acquire CoD for example, acquire Infinity Ward, they won't acquire the 'creative' talent behind CoD as they left Infinity Ward nearly 2 decades ago and went on to form ReSpawn (Titanfall, Apex) and now the co-creator of Activision's CoD is the 'head' of EA's Battlefield, the game CoD was created to compete with...

Whilst no-one wants to hear about Staff losing Jobs and hope that they can find new employment quickly, Gaming is growing and new Studios are being created all the time, need staff to get projects out etc so hopefully they will find new employment quickly...

@theSpectre You mean that Arkane Austin that is expanding even after Redfall fiasco? Yeah. It really sounds like closing of the studio is imminent

Again, can't wait for that THQ Nordic summer showcase.

Aren't conglomerates fun

I’m surprised that anyone is surprised by this. Embracer didn’t hoover up all these companies to let them carry on doing their own thing.The point of mergers and acquisitions is to boost shareholder value by removing redundancies (firing lots of people) and increasing profit by squeezing as much efficiency out of the new conglomeration as possible. It’s how companies increase their worth without having to get better at what they actually do.

Microsoft buying ABK makes it less likely the studios will close or be forced to work endlessly on COD.

They founded a company and then really just said nah shut it down. A+ job there Embracer really good job.

They obviously grew too large way too fast

Basically buying the IP's and not the staff of the studios.

Hopefully they find jobs quickly.

@Areus I'm not the biggest Crystal Dynamics fan, especially after The Avengers debacle. But they would probably be a good get if they were to stick to what they do best (Tomb Raider). Eidos Montreal would be great for Deus Ex and getting The Avengers and Guardians of the Galaxy could help with Insomniac's Marvel Universe.

@Godot25 Just wait.

@cragis0001 MS has had 2 massive layoffs in the last 6 months. If Xbox's plan doesn't work out and Game Pass adoption continues to stagnate, MS is eventually going to stop opening its checkbook to bail out Phil Spencer and yes we'll see studio closures.

Very worried about deus ex now.

@DennisReynolds it is just old thq they made collectors edition no one buys unless they were 40 bucks.
Spongebob had multiple collectors edition.
From 100-200-300.
No one is going to buy that.

Yup. Love where the gaming industry is going with its all-digital, subscriptions push and the constant buyouts.

@theSpectre

I expect massive layoffs at PlayStation after Microsoft's acquisition of Activison goes through because Sony will feel a drop in their revenue since COD brings them the biggest profit.

@theSpectre

Sony could easily buy Western studios from Square Enix, and I don't understand why they didn't do that

@BacklogBrad

Phil Spencer promised, eg Starcraft if Microsoft's acquisition of Activison goes through

https://www.videogameschronicle.com/news/phil-spencer-wants-to-talk-to-blizzard-about-classic-rts-games-like-starcraft/

@theSpectre lol. Every technology company had layoffs in past few months. It doesn't mean ***** since Microsoft posted record profits. Only studio that was hit by this layoffs in any meaningful way was 343. And that wasn't because "Xbox is in trouble" but because they ***** up live service of Halo Infinite and whole studio was restructured.

Or did you forget that Sony also shut down one of their studios? Does it mean PlayStation is in trouble?

And regarding Arkane Austin. If they can't produce solid game after Redfall I would even welcome restructuring that studio. Because yeah, Redfall was sad circumstance of game that was forced onto developers because Bethesda wanted that GAAS money and Microsoft did not have the balls to cancel it entirely. But now they have "freedom" to make whatever they want. If they don't produce great game, Microsoft should do something about that

@BAMozzy You still need a ton of money to make games. So a ton of IPs does not necessarily mean massive money.

@BacklogBrad Sorry what? You know how much money they dropped on the acquisition they probably need to keep pumping out games.

@Flaming_Kaiser true - but the point is you can still earn money on your IPs without necessarily the costs of making a 'brand new' game. Disney will be making some money off of Spider-Man, Wolverine, Star Wars games etc without having the 'costs' of developing games by licensing out their IP's - not just for games, you also have merchandising, TV/Movie rights etc.

Remakes/Remasters/Ports to new hardware is another option that isn't going to 'cost' the same as a new game but because the IP was popular, it will likely sell and bring in more money than creating a 'new' IP from scratch, marketing it etc. As soon as a 'new' Tomb Raider is announced for example, it already has a big 'fanbase' of the IP eager to buy...

Studios make money by having Products out that sell, IP owners can make money just on the IP by Licensing it out - not just for games, but for TV, for Merchandise, for Movies etc etc

@BAMozzy But the games were really nice but the sales were not that great though of Tombraider. And for people who said Sony should have bought Tombraider what's the use of it competes with your own IP's.

@Flaming_Kaiser The point I was trying to make is that Tomb Raider still sold and has movies, merchandise etc etc to make money. Square Enix are 'never' satisfied with the Sales but the point is, it still sells, still has fans that will buy it because its an IP they know/like etc.

I could have used GTA which has 'milked' the SAME GTA V now across multiple generations and 'porting' the OG RDR game to Playstation/Nintendo to 'sell' but picked Tomb Raider as that has movies and a lot of merchandise associated with it - all of which also brings in money for that 'IP'.

I never suggested Sony should buy or should have bought Tomb Raider at all - I only used that as an example of an IP that can continue to make money whether a 'new' game is being developed or not. Zelda, Mario, Pokemon etc all make Money for Nintendo whether they have games out or not - those 'IP's' make money from licensed merchandise, TV/Movies etc. People will buy Hardware just to play Zelda and get hyped as soon as they know a new Zelda is in development - its the IP's that ultimately bring people in...

@Flaming_Kaiser I don't know where you got the idea that I was saying they would make less games....

MS owning ABK makes it less likely that a studio like Toys For Bob will be relegated to CoD work forever. It is more likely than it was a year ago that they get creative freedom to make whatever they want. Vicarious vision (blizzard albany) might not be forced to remain in their support role either.

MS success does not hinge on call of duty/WoW like ABK's did. Some times acquisitions are a good thing for the industry.

@Dark_Knight I would love another starcraft or a remaster. I hope a lot of those rts games come back.

@BacklogBrad MS is going to push their biggest franchises even harder so I think we will see the opposite of what you you think. Most of their acquired studios didnt diversify I think their output more of the same.

@Flaming_Kaiser that hasn't been the case so far. MS has been very hands off and not only allow games like pentiment but encourage them.

There will be much more freedom for ABK reporting to Phil spencer and not their shareholders.

@Godot25 Sony did close Pixelopus which is unfortunate. That said, MS is on another level from Sony. It's not a great look when you lay off 20,000 employees whilst trying to spend $69 billion to buy a company. They could use $1 billion of that money, retain their employees, and buy ABK for $68 billion. As for Arkane Austin, they were made the scapegoat by both Bethesda and MS. Bethesda forced them to make a game they had no interest in, resulting in over 70% of the staff from Prey leaving the studio during Redfall's development. MS was then so hands off with Arkane, that they had no idea what the game was or what state it was in. That failure falls to MS. Then, Spencer and Matt Booty blamed Arkane for 'not understanding what it means to be an Xbox Games Studios first party developer' instead of being like, yeah, we messed up and should have done more quality control. Honestly, with developing and releasing the turd that is Redfall, it would seem that Arkane Austin understood exactly what it means to be an Xbox Games Studios developer.