After laying off 1,400+ employees, closing 7 studios and canceling 29 games, Embracer CEO admits: ‘I deserve criticism’

Embracer Group CEO Lars Wingefors has taken primary responsibility for the latest wave of layoffs, studio closures and game cancellations at the company.

During a period of unprecedented instability in the games industry, Embracer laid off 1,400 employees, closed seven studios and canceled 29 games over the course of about nine months in 2023. The restructuring comes after years of high-profile mergers and acquisitions, but the collapse of a $2 billion investment deal with Saudi publishing and esports company Savvy Games Group has left the company in a difficult position… even though it got there by buying studios out of control.

Responding to criticism caused by these actions, Wingefors told GamesIndustry:

As a leader and owner, sometimes you need to take the blame and be humble if you made mistakes and if you could have done things differently.

I’m sure I deserve a lot of criticism, but I don’t think my team or companies deserve all that criticism. I can take most of the blame. But at the end of the day, I have to believe in the mission that we set out and it’s still valid and we’re now delivering on it with this [новой] structures.

Embracer announced Monday that it will split into three separate organizations: Coffee Stain, Middle-Earth and Asmodee, each focusing on different parts of its current business. A few weeks ago, the company sold Borderlands developer Gearbox for $460 million, after buying it for about $1.3 billion just over three years ago. Despite all these changes, Wingefors notes that there is unity among Embracer executives regarding the direction of the company.

I still feel that I have the confidence of many or all of my key partners and CEOs who have joined the group. It was difficult, but I think they all believed in Embracer’s mission. They also understand that the world has changed, we must change. It hurts.

We can’t make all the games we wanted to make three years ago, but we have to adapt to it. We’ll still make games, we still have one of the largest, if not the largest, pipeline of games in the industry. And we have great plans for the coming years or decades.

The situation with Embracer is a clear example of hype investments in games during the Covid-19 period, which ended with the bursting of the bubble, so now investors are not so willing to invest in new game projects. However, analysts believe that by the end of 2024 and early 2025 the situation will return to growth.