Embracer CEO Lars Wingefors has acknowledged it’s “way too early” for the company to “start talking about” acquiring new studios.
Talking to investors – as transcribed by RPS – Wingefors said that after shedding 1300+ jobs, cancelling dozens of games, and shutting down studios like Timesplitters developer Free Radical and Saints Row dev Volition, the team’s “highest focus and priority” was to “increase profitability and cashflow generation by simply making better products and games”.
“Looking to do more [mergers and acquisitions] deals – I think it’s way too early to start talking about restarting the M&A engines again,” Wingefors said when asked about future acquisitions.
“Now we are in the late phases of the consideration into the future of the group, and that’s our highest focus and priority – how we set up ourselves and structure ourselves, and utilise our assets we have within the group, and have them work together, and how we leverage them better working together, utilising different functions.
“I think that’s our focus right now – to increase profitability and cashflow generation, by simply making better products and games,” Wingefors added.
Interestingly, Embracer said the companies it has closed or divested had “negative cashflow”, and what remains is “not for sale”.
“We are ending the restructuring programme now, end of March, and the Gearbox restructuring process has been part of that programme. Now we are getting approached, I would say not quite daily, but on a weekly basis, by companies that would like to acquire certain assets within the group,” Wingefors explained.
“And I’ve been very clear that they’re not for sale, because they’re a very important part for the group and for the shareholders of the group going forward,” said Wingefors.”
Embracer – which acquired Gearbox in just 2022 – has now entered an agreement to sell Gearbox Interactive to Take-Two for $460m.
Embracer initially purchased Gearbox for $363m in 2021. The swift sale of the studio – which had long been expected – is part of Embracer’s “comprehensive restructuring programme”, which began last year after the collapse of a $2bn “major strategic partnership” in May.
When this transaction is complete, Take-Two will acquire the Borderlands and Tiny Tina’s Wonderlands franchises, as well as Homeworld, Risk of Rain, Brothers in Arms, and Duke Nukem. Closing is expected to be finalised in Q1 FY 24/25, ending June 2024.
Embracer will still retain a number of assets such as Lost Boys, which Gearbox acquired in 2022.