Gearbox and Crystal Dynamics owner Embracer announce 900 layoffs after "one of our strongest quarters for new releases ever"

16.11.2023 - 13:26 / rockpapershotgun.com / Rain Returns / Lars Wingefors

Everybody's favourite bulk-buyer of studios and licenses Embracer Group have announced that they've laid off 900 people over the last three months, as per restructuring plans revealed this summer - around five percent of their total workforce.

That's despite the company's net sales increasing year-on-year by 13 per cent for the second quarter of 2023 (July to September). In their latest investor earnings report, Embracer say that their PC/Console Games segment in particular has seen a year-on-year decline of five per cent in sales in that period, but that this remains one of the conglomerate's "strongest quarters for new releases ever", buoyed by increased returns from the table-top, mobile and entertainment and services divisions.

According to the report, Embracer's "soft free cash flow" - "free cash flow" essentially describes the amount of money a company can distribute to investors and creditors as dividends and so forth, without breaking itself - is "more or less only driven by an imbalance between investments into ongoing development and completed development within the PC/Console Games segment, which we are now addressing through the implementation of the restructuring program".

Embracer CEO Lars Wingefors comments that "over the past two years, our internally developed games have had [a return-on-investment] over twice as high compared to externally developed games". Even in the wake of Embracer's restructuring, he goes on, the company "will still be investing more than the value of our released games, laying the foundation for future organic growth in the PC/Console Games segment".

Wingefors had a bit to say about the fortunes of specific Embracer releases, spanning internal and external development studios and publishers. Apparently, Gunfire and Gearbox's fantasy procedural Gears of roguelike Remnant 2 has done rather well, selling over two million copies. Starbreeze's heist shooter Payday 3 has "seen a mixed reception and performance", which is no surprise given that game's technical issues at launch. Embracer expects it to be a financial success eventually, but "below management expectations".

Wingefors also hailed the "successful release" of Dead Island 2, Risk of Rain Returns, Teardown on console, a new update for Satisfactory, and Remnant 2's Awakened King DLC, though the report doesn't go into detail. There's a lot more in the full thing about the state of affairs across mobile, table-top and Embracer's wider entertainment operations, if you're curious.

Embracer's restructuring has seen the company shutter Saints Row developer Volition and lay off staff at Mythforce developer Beamdog and Star Trek Online developer Cryptic. The company are reportedly on the verge of closing