Embracing disaster | Opinion

17.11.2023 - 12:35 / gamesindustry.biz

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It’s hard not to feel cynical about the state of the games business this year.

On one hand, it has been a banner year for games; from much-anticipated sequels to note-perfect remakes and smart, innovative indie titles, the year has been filled end to end with critical darlings and commercial success.

On the other hand, every week brings news of a new set of companies laying off staff – in some cases, “restructuring” in ways that cut out a significant fraction of their overall workforce. It’s a great year for games and yet a terrible one for many of the people who make them.

In the midst of all the layoffs happening across the industry, the news that Embracer Group has now laid off over 900 staff as part of its ongoing restructuring looks like just business as usual; just another major company slashing headcount to save money. What’s actually happening here, however, is on a different level to most of the other restructuring being done around the industry – even if some of the root causes are the same.

Embracer Group spent the best part of the past decade in a hyper-aggressive acquisition mode, building itself from a small publisher of mid-range AA games into the parent company of one of the largest networks of development studios ever assembled, plus a huge library of IP and a variety of side businesses in other media. Now, that rapidly assembled house of cards is wobbling precariously and threatening to tumble. If it does, if things play out as badly as they could, then this ten-year rise and fall will ultimately turn out to have been the worst case of corporate vandalism in the industry’s history.

If things play out as badly as they could, this ten-year rise and fall will turn out to be the worst case of corporate vandalism in the industry’s history

In a sense, the Embracer story is simple – and is just an exaggerated version of what has happened at many other companies recently. The firm took advantage of the ready availability of investment cash during an era of incredibly low interest rates to go on a decade-long spending spree that saw it acquire dozens of game studios and various other businesses. The original idea was to bring together a lot of “AA” studios – studios which pretty consistently released smaller games that were popular with relatively niche audiences, rather than spending years of development time and tens of millions of dollars on big swings at the AAA market – with the theory being that in doing so, you could create a robust publisher supported by dozens of minor franchises, unlike existing major publishers which often rely on a small number of tentpole franchises to keep the business afloat.

That