Shortly after the end of its cost-cutting restructuring program, Embracer Group has announced a new transformative move. The Swedish holding company will now split into three standalone public entities.
What happened?
As explained on its official website, the current structure of Embracer Group “does not create optimal conditions for future value creation both for Embracer Group’s shareholders and other stakeholders.”
Following the split, each of the three entities will become a separate, publicly listed company with a focus on their core strategies and areas of expertise:
- Asmodee Group — tabletop game publisher that owns 23 studios and over 300 IPs;
- Coffee Stain & Friends — game publisher/developer focused on A/AA titles for PC, console, and mobile;
- Middle-earth Enterprises & Friends — AAA developer/publisher and the owner of IP rights for The Lord of the Rings and Tomb Raider.
Shares of Asmodee Group and Coffee Stain & Friends will be distributed as a dividend to Embracer shareholders and listed on Nasdaq Stockholm. Middle-earth Enterprises & Friends will remain within Embracer Group, which will be renamed.
“This move towards three independent companies reinforces Embracer’s vision of backing entrepreneurs and creators with a long-term mindset, allowing them to continue to deliver unforgettable experiences for gamers and fans across the globe,” Embracer co-founder and CEO Lars Wingefors said in a statement.
Wingefors will remain an active owner of all three entities, but each of them will have their own leadership:
- Stéphane Carville will remain the CEO of Asmodee Group;
- Coffee Stain CEO Anton Westbergh will take over Coffee Stain & Friends;
- Embracer chief strategy officer and Crystal Dynamics/Eidos CEO Phil Rogers will take over Middle-earth Enterprises & Friends.
Asmodee is expected to be listed on the stock exchange within 12 months, and Coffee Stain & Friends shares will be distributed during CY 2025. All three entities will be headquarted in Karlstad, Sweden.
The board of directors believes that this move will create simplified equity stories and attract a larger pool of investors, with each entity being able to fully control its own financial targets and capital allocation.
It is worth noting that the board first thought about spinning off some of Embracer’s operative groups into separate publicly listed companies in November 2022. At the time, it assumed that this move could help “create higher shareholder value and improve our strategic flexibility.”
What games and studios will each entity operate?
“Coffee Stain & Friends” includes the following companies and IPs:
- Coffee Stain — Satisfactory, Goat Simulator, Valheim (part-owned by developer Iron Gate);
- Ghost Ship Games — Deep Rock Galactic;
- THQ Nordic (Piranha Bytes, Purple Lamp, Bugbear Entertainment, Gunfire Games, etc.) — Elex, Darksiders, Remnant, Wreckfest, Destroy All Humans, SpongeBob games, MX vs. ATV, Biomutant;
- Tarsier — Little Nightmares;
- Tuxedo Labs — Teardown;
- Amplifier Game Invest — Dice Legacy, Fishing North Atlantic, First Class Trouble, Lightyear Frontier.
“Middle-earth Enterprises & Friends” consists of:
- Middle-earth Enterprises — Lord of the Rings (video games, films, merchandise);
- PLAION (Deep Silver, Flying Wild Hog Studios, Dambuster Studios, Prime Matter, etc.) — Dead Island, Evil West, Shadow Warrior;
- Crystal Dynamics / Eidos-Montréal — Tomb Raider, Deus Ex, Thief;
- Dark Horse — publisher of The Mask, Timecop, Father’s Day, Hellboy, as well as other comics based on IPs such as Stranger Things, Star Wars, and The Legend of Zelda;
- Freemode — publishers of games like Wunderling, Zero Wing, and Snow Bros. Special (also owns Limited Run Games, Quantic Lab, and Bitwave Games);
- Warhorse Studios — Kingdom Come: Deliverence;
- Tripwire — Killing Floor, Maneater, Red Orchestra;
- 4A Games — Metro.
There is not one way to do business, but some business models are more similar than others. The same goes for businesspeople. The ambitions may be similar, but the approach differs. The similarities between the businesses that will make up Asmodee, 'Coffee Stain & Friends' and 'Middle-earth Enterprises & Friends' are striking, but so are also the differences when it comes to go-to-market strategies and business profiles. All the companies have bright futures ahead, by perfecting what is working for each of them, and by continuing to cooperate when it makes sense. CEO of Embracer Group
Official names for both entities will be decided later. The exact allocation of companies and assets between them is “still subject to minor potential adjustments in the period leading up to the spinoff of ‘Coffee Stain & Friends’, based on strategic and other considerations.”
It is worth noting that while 4A Games is still listed among Embracer’s assets, previous reports suggested that Saber Interactive agreed to acquire the studio (publishing rights for the Metro series will still remain with Plaion). This happened as part of Saber’s sale to Beacon Interactive.