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Embracer announces plan to split into three companies, including “Middle-earth Enterprises and Friends”

After numerous studio closures and thousands of job losses, embattled publisher Embracer will now split into three distinct entities, including one focused on its big bet to successfully develop games set in the same world as The Lord of the Rings.

Embracer announced details of the plan this morning, and charted how parts of the company would now be named: Middle-earth Enterprises and Friends, Coffee Stain and Friends, and Asmodee Group. Each of the three will be separately listed on the Stockholm stock exchange.

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Middle-earth Enterprises and Friends will encompass many of Embracer’s biggest studios and brands, including developers such as Crystal Dynamics (Tomb Raider), Eidos Montreal (Guardians of the Galaxy), 4A Games (Metro), Plaion and Deep Silver Dambuster Studios (Dead Island 2), Warhorse (Kingdom Come Deliverance 2), plus Tripwire, Flying Wild Hog, Vertigo Games and Freemode.

Embracer says this portion will be the “creative powerhouse in AAA game development and publishing for PC and console, as well as the stewards of The Lord of the Rings and Tomb Raider intellectual properties”.

Last year, interim exec Matthew Karch said Embracer “need[s] to be exploiting Lord of the Rings in a very significant fashion and turning that into one of the biggest gaming franchises in the world”.

“That’s a much better use of resources than some of the other projects that some of our teams have been working on,” Karch continued.

Coffee Stain and Friends will meanwhile include more indie outfits, including Coffee Stain itself (Goat Simulator, Valheim), Ghost Ship Games (Deep Rock Galactic) and Tarsier (Little Nightmares), plus free-to-play developers.

Lastly, Asmodee is the company’s tabletop arm, which owns brands such as Ticket to Ride, Exploding Kittens, Azul and Catan.

The move follows last month’s sell-off of Embracer’s Saber assets to Karch, who will run that portion of the business mostly separately, and the sale of Borderlands developer Gearbox to Take-Two for $460m.

After a huge acquisition spree, Embracer has subsequently shed thousands of staff and numerous development studios over the past year as it struggles to balance the books – it says, after a major $2bn investment fell through.

Embracer has since laid off eight percent of its workforce – a total of 1387 employees – and shut a number of its high-profile studios, including Free Radical, which was working on now-cancelled TimeSplitters game, and Saints Row developer Volition.


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