Tough Decisions at Embracer Group; Company Closes Studios and Cancels Games
Embracer Group, one of the gaming industry's largest corporations, has announced changes to the business it runs. The restructuring is expected to entail serious consequences.
Swedish media company Embracer Group, which includes publisher THQ Nordic, has announced plans to restructure and outlined changes to its business strategy. This is intended as a response to the corporation's unfavorable listing on the stock market. Unfortunately, the consequence of the new direction will be downsizing and the cancelation of some games.
Major changes in structure
In an open letter acting CEO Lars Wingefors talks about the company's future growth plans:
"[...] The program presented today will transform us this year from our current intensive investment mode into a highly profitable business."
The Swedish businessman's words allude to Embracer Group's previous strategy of aggressively acquisition of development studios and rights to well-known IPs.
However, the restructuring and change in the vector of operations will not be completely stress-free. Indeed, the company's CEO has indicated that they will result in the closure of some development studios, project cancellations, as well as staff reductions.
"The actions will include, among other things, the closure of some studios and the termination or suspension of some projects under development."
Wingefors reassures, however, that the cancellation process will mainly affect games in the early stages of development and those that have not even seen a public announcement.
"[The cancellations - ed.] will almost entirely concern unannounced projects [...] all announced, significant releases will be released as planned."
Crystal Dynamics announced in an official statement on Twitter that the projects they are preparing (Perfect Dark, the new installment of Tomb Raider) will not be affected by changes in the parent company's structure.
A harbinger of difficult times
Major changes in the structures of large corporations not infrequently entail serious and unpleasant consequences such as studio closures, job cuts or cancellation of promising projects.
Although Embracer Group still hasn't disclosed details of the restructuring, given how much capital the corporation now manages, the game industry must be prepared to receive unpleasant and disappointing news.
