Riddled with debt, Sweden’s Embracer sells Star Wars game maker for $500M
Swedish gaming company Embracer Group has sold a big chunk of one of its biggest subsidiaries, US-headquartered Saber Interactive, in a deal totalling $500mn.
The buyer is Beacon Interactive, a holding company recently formed by none other than Saber’s own co-founder Matthew Karch. In a letter shared with Bloomberg, Karch said he was buying back the rights to his company and many of its studios because “they represent the best of what Saber is and can be.”
Saber Interactive is currently overseeing the development of 38 games, including Warhammer 40,000: Space Marine 2, John Carpenter’s Toxic Commando, and Jurassic Park: Survival. It is also working on a remake of the classic sci-fi game Star Wars: Knights of the Old Republic.
In 2020, Embracer purchased Saber Interactive for $525mn, as part of a spending spree that saw it acquire a number of major gaming studios — and a whole lot of debt.
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Forced into some major restructuring, by November last year Embracer had laid off 904 employees, roughly 5% of its workforce, and canceled at least fifteen projects. As such, the company cut its debt from $2bn to $1.5bn. Selling Saber will no doubt push Embracer closer to the green, but it is also losing some major titles in the process.
Along with the games it is currently working on, Beacon is taking 3000 workers from Saber while Embracer is retaining 800 (it has 14,140 workers overall). Beacon will also take some proprietary engine technology and game tools along with it.
This may be the beginning of a widespread exodus at Embracer, which has also reportedly received interest for another one of its subsidiaries Gearbox, best known for the Borderlands game. The studio could be worth $1.3bn.
For many gamers, the quicker their favourite titles leave Embracer the better. “Great news,” wrote one Reddit user upon the news that 4A, the maker of the Metro first-person shooter franchise, was jumping ship. “It would be a dark day in gaming if they were closed down because of the shit show Embracer has become.”
“Hopefully the remaining titles get out of that [Embracer] clusterfuck soon,” said another.
Lars Wingefors, co-founder and CEO of Embracer, is just happy to get some cash on the account. “Cash flow is immediately improved, and we remain committed to reducing net debt,” he said, adding that the transaction puts “both companies in a stronger position to thrive going forward.”
Under the deal, Embracer will also discontinue all operations in Russia, due to the fact that it now longer owns the studios that have offices there.
