Embracer Group continues to lose pieces, among thousands of people fired, studios closed and projects cancelledperhaps representing the most striking case of the wicked choices made by a large part of the videogame industry during the great gold rush that took place in the pandemic era and for which today the professionals are paying the consequences.
If you often visit our pages, you will know very well that the last two years have been full of much satisfaction for the players, but also catastrophic for those who work in this sector. On the one hand, a truly abundant number of very high-level games have arrived, on the other we have seen many, too many, development studios closed and people lose their jobs.
Let's talk about over 18,000 layoffs from 2023 to todayof which 7,800 this year alone, at least according to data from videogameslayoffs.coma portal that, as the name suggests, was created specifically to track the unprecedented waves of layoffs that have been hitting the industry in recent years.
These cuts are partly due to wicked management focused on rapid and uncontrolled growth during the pandemic, in anticipation of a massive expansion of the market (given that thanks to the quarantines many have approached video games) which ultimately did not materialize. However, this is only one of the many possible reasons, which clearly change based on the reality examined, and which also include a constant growth in development costs that does not keep pace with that of the market and the global economic crisis.
Embracer Group from the acquisition campaign to the layoff campaign
If we think about Embracer Group, however, the first thought immediately goes to gargantuan acquisition campaign which took place in the Covid period and the one immediately following, characterized by multiple millionaire acquisitions (with hindsight, perhaps made under the motto of “ndo cojo cojo”), with the aim of building an impressive and varied portfolio of intellectual properties and a sprawling structure capable of addressing all major entertainment sectors, not just video games.
We recall that in 2022 the giant had organized itself into 11 operating groups, including those led by Dark Horse (comics, TV series and films) and Asmodee (a company specializing in board games, paid 3 billion dollars in 2021), for a grand total of over 14,000 employees and a catalog of 900 proprietary or licensed IPsincluding that of the Lord of the Rings.
There was a lot of talk in the gaming world at the time 220 games scheduled by 2025, including 25 Triple-A gameswith the list of studios under Embracer's wing featuring studios and publishers such as Deep Silver, THQ Nordic, Plaion, Crystal Dynamics, Saber Interactive and Gearbox Interactive, along with a vast number of smaller studios.
And then the decline began. Since June 2023, the megacorporation has started a large-scale corporate restructuring and practically every month there is always some bad news for gamers. Just to mention some of the most striking cases, among the closed studios there are Volition (Saints Row), Free Radical Design (Timesplitters), Campfire Cabal (Expeditions). In total there have been nearly 1,400 layoffs to date, with more planned for the future, including Gearbox and subsidiary Lost Boys, Eidos Montreal, 3D Realms and Splitgate, Cryptic Studios, Zen Studios, New World Interactive and many others Still. Obviously there was also the cancellation of numerous projects, 29 between July and December 2023 alone.
The latest news now also talks about a possible separation from Gearbox, with the Borderlands software house which could buy its independence or be sold to another company, and from Saber Interactive, which instead seems very close to the sale, according to Jason Schreier. In short, two of the largest studios acquired in previous years.
What happened? As mentioned above, the bubble simply burst. The pandemic is over, people have started leaving their homes again and the miraculous growth of the sector that was seen between 2020 and 2022 has come to an abrupt halt, with companies in the sector finding themselves with redundant staff and the need to make ends meet, also because in the meantime there is always the age-old problem of development costs which are growing at an unbridled pace, unlike those of the pool of potential consumers. Add to the equation the failed $2 billion deal with Savvy Group when the deal seemed to have gone through and you have the perfect recipe for disaster.
In short, Embracer Group is the most striking case precisely because of the numerous acquisitions made in previous years, but upon closer inspection the layoffs in the sector demonstrate that this wicked expansionist strategy has been embraced by all the market's protagonists. And those who pay the consequences are primarily the workers.
This is an editorial written by a member of the editorial team and is not necessarily representative of the editorial line of Multiplayer.it.
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