Arrowhead Studios previously announced that the team is working on a balance patch for co-op shooter Helldivers 2, but doing so has proven to be trickier than expected since weapons with higher kill rates don't always lead to successful missions.
16.02.2024 - 11:20 / gamesindustry.biz / Lars Wingefors / Phil Rogers
Embracer CEO Lars Wingefors said that the current reduction in workforce at the company and across the industry is "something that everyone needs to get through," later adding that the group's strategy has been to cut the things that have "the lowest chance of success going forward" and to only keep "the most iconic studios."
This conversation was part of the Q&A portion of the company's earnings call yesterday, as it announced its Q3 results.
Answering a question about the underlying games market, Wingefors said that the whole industry has been feeling a "significant shift" since last summer.
"More or less all companies are [going] through a restructuring program," he said, as transcribed by Seeking Alpha. "There is less investments made from the industry into content. I think the underlying consumer market is solid and is still growing, but the underlying changes – there's a lot of underlying changes made to the industry. That obviously affects all of us in the industry.
"I think looking at the 8% reduction in workforce [at Embracer], there is obviously – I don't know the number for the whole industry, but I think it's something that everyone needs to get through. I mean, as I said, it's more driven by the overinvestment in the previous years because everyone just put all capital into gaming and perhaps a bit too much capital in a few instances."
Embracer Group's chief strategy officer Phil Rogers told us in November that he considered the human cost of Embracer's restructure "significant" but "necessary." Since the restructuring program began in June, the group has laid off more than 1,400 people.
During the earnings call, Wingefors was asked about the company's contribution to the industry-wide situation, as the company went on a M&A spree in 2020 and 2021 before announcing its restructuring last year following the collapse of a $2 billion deal, leading to a wealth of studio closures.
One investor highlighted how Embracer's number of projects in development dropped by 20/25% following the restructure and how, "looking back, that was clearly contributing to the industry's overinvestment."
"I think we follow with a very clear strategy onboarding great entrepreneurs and backing their business plans," Wingefors replied. "I think everyone has been delivering according to those plans. The thing is, in the capital allocation, we put organic first, meaning the first investment came to organic growth, which we now see the outcome of. And then secondly, we made M&A.
"So it's kind of, okay, we had that strategy back then. Now, we need to adjust that, because the cost of capital has increased. So it's just the overinvestment into content that is not supported by the cash flow from the operations or external capital.
Arrowhead Studios previously announced that the team is working on a balance patch for co-op shooter Helldivers 2, but doing so has proven to be trickier than expected since weapons with higher kill rates don't always lead to successful missions.
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After the Helldivers 2 community had rounded on farmers for negatively impacting the game’s galaxy-wide war against alien bugs and bots, developer Arrowhead has clarified their traitorous actions are in fact harmless.
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Helldivers 2 has been plagued by server issues since its launch, and it seems like these issues cannot be solved by simply purchasing more servers.