After years of expansion, Karlstad-based Swedish gaming conglomerate Embracer Group is undergoing a major restructuring and leadership. Major development delays, weaker demand and the fall-through of a $2 billion strategic partnership have resulted in the closure of multiple studios, the cancellation of their most popular games and some major layoffs. CEO Lars Wingefors announced the restructuring in an open letter on Tuesday morning and indicated that the phase-wise restructure is aimed at consolidation to reduce debt by billions. In a statement, the company said it aimed to lower capital expenditure by at least 2.9 billion crowns ($269 million) and cut annual overhead costs by at least 10%.
The Group owns the rights to both Tomb Raider and Lord of the Rings alongside some popular IPs. Embracer acquired Middle Earth Enterprises, the holding company for Lord of the Rings last August. The gaming group bought rights to the Tomb Raider franchise from gaming giant Square Enix last year. Early this year, Embracer announced that it has five Lord of the Rings games in development via external channels.
Tomb Raider, LOTR Safe Amid Major Layoffs And Reshuffle At Embracer
Tomb Raider is seemingly safe from being axed as developers Crystal Dynamics took to social media to address the anxieties of fans. "We want to reassure fans that there will be no impact to our continuing efforts with our partners at The Initiative on Perfect Dark, or our next Tomb Raider title”, they said about their Lara Croft project that they're developing in collaboration with Amazon.
LOTR remains the conglomerate's biggest IP and according to reports, the company plans to exploit ‘Lord of the Rings, particularly in the gaming market, according to its new COO, Matthew Karch, the now former CEO of its holding company Saber Interactive, who will lead the restructuring program. The company plans to continue to licence out LOTR like it has been doing since its acquisition.
"We own Lord of the Rings, and we know we need to be exploiting Lord of the Rings in a very significant fashion and turn that into one of the biggest gaming franchises in the world. That’s obviously something we’re going to be doing,” Karch said during a webcast. “That’s a much better use of resources than some of the other projects that some of our teams have been working on.”