Success of Remnant 2 Overshadowed by Layoffs at Embracer; Sales Exceed 2 Million Copies
Remnant 2 is doing well, but that's more than can be said for many of the games and studios owned by the Embracer Group, which laid off 900 people in the last fiscal quarter.
A wave of layoffs in the second half of 2023 is taking a heavy toll on game developers. Embracer Group alone laid off 900 people, or about 5% of the company's workforce, between July and September. The group broke the news in a report summarizing the past fiscal quarter.
Embracer Group CEO Lars Wingefors explained to the investors that the company was to transform itself "into a leaner and stronger company," though he took the layoffs "with pain" and thanked existing employees for their work (via Video Games Chronicle). He added that "restructuring" is progressing smoothly, although "business consolidation" is still at an early stage.
The report does not say which studios "ceased operations," reduced their teams or had to abandon some projects. Instead, it mentions that this is primarily to "improve the expected return on investment" for PC and console games.. In the fiscal second quarter, only this segment saw a decline in net sales. For the company as a whole, they increased by 13%, mainly due to the "entertainment and services" (up 25% year-on-year) and "board games" (up 76% year-on-year) segments.
However, we know from earlier reports that the list of studios affected by the company's "restructuring" includes Gearbox Publishing (reportedly intended to go up for sale, although the report does not confirm this rumor), Volition, Beamdog, Blackbird Interactive and Crystal Dynamics. Rumors mention also the possible closure of the barely resurrected Free Radical Design.
At least one developer has reason to be happy, and this is by no means the team responsible for PayDay 3 (which performed "positively, but below expectations"). Sales of Remnant 2 has surpassed 2 million copies.
The first million was reached on the fourth day after its release, but apparently the title is still relatively popular. Especially after the updates from August and the recent announcement of a DLC.
As for the company's next projects, the list still includes the remake of Star Wars: Knights of the Old Republic and Homeworld 3, although the developers of both also have their own problems (not necessarily related to the company's restructuring). For more information regarding Embracer Group's financial condition and future plans and games, we refer you to the company's quarterly financial report.
