Highlights
- Embracer Group is reportedly considering selling off Gearbox Entertainment, the studio behind Borderlands, as part of its efforts to stabilize the company after a failed deal with Saudi Arabia.
- Despite successful acquisitions of developers and IP rights, Embracer's failed multi-billion dollar deal has led to studio shutdowns and job losses, raising concerns about its future.
- Embracer has already begun restructuring, cutting debt and shutting down studios, including the recent closure of Campfire Cabal.
The Embracer Group is reportedly looking to sell off Gearbox Entertainment, the studio behind the popular Borderlands franchise. The news comes amid Embracer's efforts at stabilizing the company after its failed deal with Saudi Arabia resulting in a number of studio shutdowns and job losses. Either way, the idea of the company potentially letting go of Gearbox would do little to inspire confidence in Embracer's roadmap.
Over the past few years, the Embracer Group looked to bolster its portfolio by aggressively acquiring developers ranging from Gearbox to Tomb Raider maker Crystal Dynamics. The conglomerate even acquired the rights to The Lord of the Rings IP too. However, despite its seemingly successful buying spree, last year it was reported that a multi-billion dollar deal had fallen through for the company. Recently, this was revealed to be a $2 billion arrangement with Saudi Arabia-backed Savvy Gaming Group. While the exact reason for the botched deal is unknown, the repercussions for Embracer are already starting to make a noticeable impact as the group looks to cut its losses.
Now, one Reuters report claims that Embracer is currently exploring options for its Gearbox Entertainment subsidiary, including selling the studio. The company is reportedly working with Goldman Sachs and Aream & Co. with the idea of a potential sale, after receiving interest from third parties. Gearbox, which is home to properties like Borderlands and more recently, Remnant 2, was acquired by Embracer back in 2021 for $1.3 billion. As of now, it remains to be seen if an actual sale will happen and neither party is yet to make any public comments on the story.
Of course, Embracer has already begun restructuring the company, announcing in June that it would reduce its net debt to less than SEK 10 billion ($903 million) from SEK 16.7 billion ($1.51 million) by the end of the financial year. In other words, this has translated to shutting down studios, canceling projects, and letting people go. Last month alone, Embracer shut down Campfire Cabal, a studio that was barely a year old. Previously, the company even closed off several mobile titles including Deus Ex GO, Hitman Sniper: The Shadows, Arena Battle Champions, and Space Invaders: Hidden Heroes.
Time will tell how things pan out for the gaming conglomerate as it undergoes restructuring, especially considering how Embracer currently has about 221 games in development. It will be particularly interesting to see how things progress for Gearbox as new Borderlands projects are already in development, one of them including an upcoming movie based on the franchise.
Source: Reuters