Embracer sell Borderlands devs Gearbox to Rockstar parent Take-Two for $460 million in shares

28.03.2024 - 15:01 / rockpapershotgun.com / Lars Wingefors / Interactive / Saber Interactive

Embracer have announced that they're selling Borderlands developers Gearbox Entertainment to Take-Two Interactive, owners of 2K Games and GTA 6 developers Rockstar, for $460 million in Take-Two shares. Three Gearbox Software studios - the flagship studio in Texas, together with Gearbox Montréal and Gearbox Quebec - will change hands as part of the deal. Take-Two will also acquire the Borderlands and Tiny Tina's Wonderlands franchises, together with Homeworld, Risk of Rain, Brothers in Arms and Duke Nukem.

Embracer will keep and rename Gearbox Publishing San Francisco, previously known as Perfect World Entertainment. They're also hanging onto Cryptic Studios, who went through a round of layoffs in November, together with their MMOs Neverwinter Online and Star Trek Online. They're also clinging onto Borderlands 3 support studio Lost Boys Interactive, who went through a round of layoffs in January, plus 3D scanning and reconstruction outfit Captured Dimensions. Last but not least, they'll keep the publishing rights to the Remnant series, Hyper Light Breaker and "other notable unannounced game releases".

Once the deal is done, Embracer will sell their newly acquired Take-Two Interactive shares for an expected $300-330 million. Embracer acquired Gearbox in 2021 for $363 million in cash and Gearbox shares, with up to $1015 million to follow if Gearbox met certain targets in the following years.

The sale forms part of Embracer's on-going restructuring programme, which has seen them lay off many hundreds of developers, shutter beloved studios like Volition and cancel games in a bid to recoup debts following an infamous acquisition spree and the reported collapse of a Savvy Games investment deal last year. Earlier this month, Embracer sold one of their largest subsidiaries, Saber Interactive, to Beacon Interactive, a company founded by Saber's own original founder.

Speaking in an investor Q&A today, Embracer's CEO Lars Wingefors reiterated that the Swedish conglomerate's "restructuring" will conclude at the end of March, "and we are now looking into the future."

Wingefors also elaborated a bit on the reasoning behind the Gearbox sale. "I think Gearbox is one of the best developers in the world, but they had ambitions to entertain the world and grow their business significantly, both by publishing other game titles as well as creating more new titles on their own," he said.

"That was a very ambitious growth business plan over the coming six years we agreed into. They were in the middle of that, which meant we had a significant growth [capital expenditure], which created a negative growth cashflow. It also added a lot of business risk into the pipeline. Because yes, they had a very good success with